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Cotton Supply And Demand To Loose &Nbsp; Future Trend Of The Main Shock Zone

2011/11/2 10:38:00 23

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Cotton Supply And Demand Fundamentals Cotton

1. Global cotton market

(1) global output has reached a high level, and stocks have risen again.

According to the latest report of the US Department of agriculture in October, the world's cotton production in 2011/12 is 27 million 38 thousand and 600 tons, a record high, an increase of 1 million 983 thousand and 400 tons or 7.92% over the 2010/11 year. The world's cotton consumption is expected to be 24 million 902 thousand and 800 tons, a slight increase of 13 thousand and 100 tons or 0.05% over the 2010/11 year, so it is estimated that the final inventory in 2011/12 will be 11 million 937 thousand and 600 tons, 2 million 168 thousand and 500 tons or 22.02% more than that in 2010/11, and the consumption to consumption ratio will also rise to 47.94%.

Due to the historical high level of global cotton prices in the previous year, the world's major cotton producers

cotton

The area has increased, so it also created a record high of cotton production in 2011/12.

But while the output has reached a new high, consumption growth has begun to show weakness.

Since the beginning of the year, the European debt crisis has become more and more intense, the US economic growth is weak, and the recovery after the Japanese earthquake has been slow. The demand of developed countries such as Europe, Japan and other developed countries as the main consumption areas of clothing has weakened, so the growth of global cotton consumption may stagnate or even retrogress in the future.

At the end of next year, inventory is expected to pick up, and the fundamentals of the global cotton market will then become tight.

To sum up, the new year's forecast of global cotton fundamentals for the first time in 6 consecutive years is in short supply, and the end inventory is also rising for the first time in 5 consecutive years, and the inventory consumption ratio has returned to the average level of the past 6 years.

The pattern of supply and demand in 2011/12 has basically been set, but demand may be faced with greater uncertainty.

Two. China's cotton market

(1)

Cotton yield

Increase, slowdown in consumption growth

Cotton planting area has increased this year due to the rise in seed cotton purchase price, the substantial increase in cotton farmers' income and the state's policy of temporary storage and storage to stabilize market expectations.

According to the Ministry of agriculture survey, cotton planting area is estimated to be around 77 million 800 thousand acres this year, an increase of 4.7% over the same period last year.

According to the US Department of agriculture's October report, China's cotton output in 2011/12 was 7 million 293 thousand and 600 tons, an increase of 653 thousand tons or 9.84% over the previous year.

This is basically consistent with the total cotton output of China's Cotton Association 2011/12, which is 7 million 280 thousand tons.

Consumption, 2010/11, domestic

Cotton price

In the case of roller coaster market, the operation of textile enterprises has been greatly affected, and many early high price cotton mills have suffered heavy losses; however, under the inflation background, the cost of textile enterprises has increased; import demand in Europe and America has declined; domestic demand has been limited; enterprises have reduced production, limited production and increased substitution.

In 2010/11, the national yarn and cloth output grew by 7.09% and 0.82% year-on-year, returning to the 08 year financial crisis level.

In 2011/12, the factors affecting the development of domestic textile industry have not been solved. Domestic consumption in the new year will continue to be lowered, and cotton consumption is expected to be 9 million 900 thousand tons.

(two) analysis of purchase and storage

The biggest difference between this year's fundamentals and past years is that this year the state has issued a temporary storage and purchase policy.

In order to stabilize the cotton market, in March this year, the eight departments of the national development and Reform Commission, the Ministry of Finance and the China Agricultural Development Bank jointly issued the "2011 cotton temporary purchase and storage plan", and decided to implement the temporary cotton purchase and storage system from 2011.

According to the plan, the 2011 temporary storage will be implemented in 13 main cotton producing provinces (districts and cities) in Xinjiang. The price of temporary storage and storage will be 19800 yuan per ton of standard grade lint to the warehouse. Once the market price is lower than the above level, the state will carry out temporary storage and storage for cotton, and the execution time will be from September 1st to March 31st next year.

Whether the price will be the bottom or the top of the market, there are more arguments in the market.

First of all, we will understand the origin of the purchase and storage price. In 2011, the provisional purchase and storage price was calculated according to the cotton wheat ratio 10: 1. In 2011, the minimum purchase price of wheat was 94 yuan / Dan, the conversion price of cotton was 940 yuan / Dan, plus the processing cost of 1000 yuan / ton, so the minimum cotton purchase and storage price in 2011 was 19800 yuan / ton.

Therefore, we can know that the cost of enterprise storage is 18800 yuan / ton, or even lower.

Secondly, the state's temporary purchase and storage policy does not stipulate the number of purchases and storage. If the state does not receive a large quantity of storage, combined with the continued downturn in the downstream textile industry, cotton prices will probably continue to explore the bottom and close to the cost price.

Therefore, individuals believe that the bottom of the future market is more likely to be near the cost price of 18800 yuan / ton.

At the same time, we can also see from the closing of the store, since the start of the September 8th storage, the number of storage and storage has been increasing, and the market price (including the spot price and cotton 328 index price) is declining.

Therefore, we also see that enterprises are not optimistic about cotton prices in the future.

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To sum up, domestic production and demand in 2011/12 will consist of 4 parts, domestic output, domestic consumption, state purchase and storage, and state import.

At present, the output has been basically determined; consumption has certain uncertainty, but it is not expected to be higher than the previous year.

The number of reserves and imports is controlled by the state.

Therefore, the domestic fundamentals of the new year will mainly depend on national policies.

Three, operation suggestion

Take the cotton index weekly as an example. Since September, the cotton price index has continued to maintain a downward trend. Combined with the fundamentals, cotton prices will continue to maintain a bottom trend when there is not much change in the national policy, and will be around 20 thousand. Once the price is too high, the price will be suppressed, and the low price will be supported by State purchasing and storage and cost.