The Downward Pressure Of Cotton Prices Increased By &Nbsp In October 2011, And The Support Role Of Purchasing And Storage Was Obvious.

Since October, the main global

A cotton picker is picking cotton in the cotton field of the 127 regiment of the seventh division of the Xinjiang production and Construction Corps.

Market review - cotton prices down at home and abroad

Since mid September, global economic growth has slowed down, European debt crisis has spread, commodity prices have dropped, and domestic and foreign cotton spreads have narrowed rapidly.

As of October 14th, ICE cotton futures contract settlement price of 101.94 cents / pound, down 11.73 cents / pound, or 10.32%, down 7.22% compared with the same period last year; the international cotton index (M) 125.31 cents / pound, down 14.02, or 10.06%, or 3.35% lower than the same period last year. According to the 1% tariff, the import cost of the folded renminbi is 20504 yuan / ton, which is higher than the domestic market 744 yuan / ton, narrowing the ratio of 744 yuan / ton.

Domestically, the acquisition and processing work has started one after another, and the market has plenty of prospects for cotton supply.

In October 14th, the settlement price of main cotton futures contract in China was 20505 yuan / ton, down 1390 yuan / ton, or 6.4%, down 17.3% compared with the same period last year. The national cotton price B index representing the mainland's 328 lint price was 19760 yuan / ton, up 47 yuan / ton, or 0.2%, down 18% over the same period last year.

Since mid September, the national grain purchase price index and China's cotton comprehensive price index have dropped slightly.

As of October 17th, China's cotton composite price index was 154.02, down 3.4% from last month, and the national grain purchase price index was 137.64, down 0.9% from last month.

China's cotton composite price index is 16.38 percentage points higher than the grain purchase price index, narrowing 4.09 percentage points from the previous month.

In September 2011, China's cotton imports continued to grow.

According to statistics from the General Administration of customs, China imported 252 thousand and 700 tons of cotton in September 2011, an increase of 45 thousand and 700 tons from the previous month, an increase of 22.07%, an increase of 51 thousand and 900 tons, an increase of 25.9% over the same period last year. In 2011 1~9, China imported 1 million 944 thousand tons of cotton, down 208 thousand and 800 tons, or 9.7%.

In September 2011, China's spinning output increased steadily.

According to the National Bureau of statistics, in September 2011, China's spinning output was 2 million 630 thousand tons, an increase of 296 thousand tons compared with the same period last year, an increase of 12.7%, an increase of 189 thousand tons, an increase of 7.74%.

In January 2011 ~9, China's yarn production totaled 20 million 950 thousand tons, an increase of 11.3% over the same period last year.

Market analysis - global consumption is still weak.

The outlook for global economic growth is bleak.

The growth of the world's major economies is still weak, and global consumption is unlikely to change significantly in the near future.

The European debt crisis is continuing. Greece's bankruptcy expectations have been strengthened, and credit default ratings of Italy and Spain have been lowered.

Standard & Poor's lowered its forecast for economic growth in Europe. The euro zone economy is expected to grow by 1.1% next year, compared with 1.5% before.

US data show that in September, the unemployment rate in the US non-agricultural sector was 9.1%, which remained high for third consecutive months. In August, the US consumer credit decreased by 9 billion 500 million US dollars, the highest level in more than a year, and the first decline in personal consumer credit in 11 months. All of these indicate that the US economy has not been substantially improved and the growth prospects are bleak.

The International Monetary Fund (IMF) released in September 20th the second half of 2011, the world economic outlook report, predicts that the global economy will grow by 4% this year, 0.3 percentage points lower than the June forecast, and 1.6% of the developed economies, 0.6 percentage points lower than June. It is predicted that the global economy will see an improvement in 2012, an increase of 4%, which is 0.5 percentage points lower than that of 2011.

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Global cotton expected high yield

Affected by the recent sluggish India rupee's recent weakness and the expected high yield of cotton this year, the government and industry in October 10th extended expectations for India cotton exports in 2011/2012.

Officials said cotton exports could increase to 1 million 360 thousand ~153 million tons, an increase of 170 thousand ~34 million tons.

The Ministry of agriculture of India has forecast the output of cotton in India this year to 6 million 137 thousand tons, up from 102 thousand tons forecast of the Cotton Advisory Committee of the country.

The data of Pakistan ginning mill Association show that as of September 30th, the amount of new cotton listed was 476 thousand tons, an increase of 6.93% over the same period last year.

In recent weeks, the cotton production area in Pakistan is suitable for weather. Some agencies expect cotton production to reach 2 million 200 thousand tons, higher than the 2 million 130 thousand predicted by the US Department of agriculture, the highest level in recent years.

With the retreat of the flood and the increase in the number of cotton mill acquisitions, the market's concerns about cotton production reduction have eased, and cotton prices in Pakistan have gradually declined.

In September this year, Brazil's cotton exports reached a record high of 140 thousand tons, a marked increase of three consecutive months, of which 55 thousand and 400 tons of cotton exports to China, an increase of two times compared with the same period last year, and a second month increase in the past second months.

In the first two months of this year, the total export volume of cotton in Brazil was close to 260 thousand tons.

Slow sale of cotton in China

Since late September, the main cotton producing areas in China are mainly sunny, picking speed has been accelerated, but cotton enterprises and cotton farmers have been cautious.

The purchase and sale data of the national cotton market monitoring system showed that as of October 14, 2011, the national cotton picking rate was 49.7%, an increase of 9.9 percentage points compared to the same period last year, which was 2.9 percentage points lower than that in the past four years (the same period average value, the same below). Compared with the picking quantity, the sales rate of the whole country was 45.8%, down 4.2 percentage points compared with that of the previous year, which was 7.2 percentage points lower than that in the normal years of the past four years.

The new cotton processing rate of the surveyed enterprises was 32.2%, down 0.3 percentage points from the same period last year, which is 3.2 percentage points lower than the normal years of the past four years, and the sales rate is 13.4%, up 5.8 percentage points over the same period last year, which is 2.5 percentage points higher than that in the normal years of the past four years. Of them, the mainland sales rate 14%, up by 10.7 percentage points year-on-year, and the sales rate in Xinjiang was 12.6%, down by a percentage point from the same period last year.

Decline in cotton demand in major consumer countries

The cost of imports of American cotton clothing has soared and the number has declined.

Data show that the average import cost of American cotton garments in August has soared to 3.8 US dollars / square meter, up 21.5% over the same period last year, the highest level since 2000. Over the past 15 months, the average import cost of the cotton garments has increased by nearly 1 US dollars, a record high in the same period.

Influenced by rising import costs and sluggish retail sales, apparel importers and retailers in the United States continue to reduce import orders for cotton garments.

In January of this year, the import volume of US cotton garments continued to increase in the previous 10 months, with an increase of 10.7% over the same period, compared with an increase of 15.8% over the same period in August.

The total import volume of 1~8 this year is only 8 billion 900 million square meters, which is 6.9% lower than that of the same period last year.

Vietnamese cotton and yarn imports cost upside down, and cotton imports decline.

According to official statistics from the Vietnam Statistical Office, in September this year, the price of CIF reached 136 cents / pound, up 57.6% over the same period last year, and the yarn import price was only 106 cents / pound, down 25.3% from the same period last year.

The upside down of cotton yarn prices has led to a continuous decline in cotton imports.

Data show that in September, Vietnam's cotton imports were only 15 thousand tons, down 50% from the same period last year, the lowest level in 30 months.

There was no significant change in yarn import volume, a decrease of 5.7% compared to the same period last year.

In the 1~9 months this year, Vietnam's total cotton imports decreased by 17% compared with the same period last year, while the yarn increased by 10%.

At the moment, the Christmas shopping season in Europe and the United States is near, but it is understood that with the increasing pressure of family budgets, consumers in Europe and the United States try their best to reduce Christmas expenses.

A Reuters survey shows that most Americans will spend less this Christmas or be on a par with previous years.

About 27% of the respondents said holiday spending would be less than last year. About 55% of the respondents thought that they would be flat last year. Only 18% of the respondents planned to increase their consumption this Christmas, down 23 percentage points from last year.

At present, the domestic enterprises' receipt work is coming to an end, but due to the increase of cost price and the rising of the RMB against the US dollar, the order profit is rather thin.

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Domestic demand for cotton rose slightly.

Before and after the national day, the domestic textile market has improved, sales orders for yarn and cloth have increased, textile enterprises' enthusiasm for purchasing cotton has increased slightly, but textile enterprises' demand for cotton demand has not been significantly recovered, and the pulling effect on the market will also be limited.

First, the current situation of tightening macro-control has not changed. Textile enterprises' capital chain is still tight, and the capacity to scale procurement is insufficient.

Second, after October, the new cotton market has been increasing, and the supply of raw materials has become increasingly abundant. Textile enterprises have a large margin of choice.

Third, despite the improvement in textile sales, the improvement is not obvious and sustainability is yet to be tested.

At present, the price difference of yarn and cotton is at a relatively low level, and the profit margin of enterprises has not been significantly expanded. In October 14th, the difference between pure cotton and 32 grade cotton yarn and domestic grade 328 cotton price was 7690 yuan / ton, which was 16% lower than that in early August.

In addition, the national cotton market monitoring system "China cotton industry inventory survey report" showed that in early October, textile enterprises accounted for 66% of the total number of raw materials for purchasing raw materials, 1 percentage points lower than the central enterprises, 31% of the wait-and-see enterprises, 1 percentage points higher than the central enterprises, and 3% of the enterprises that did not plan to purchase cotton, which was unchanged from the beginning of last month.

Forecast for future market -- purchasing and storing policy to support cotton price

A month after the purchase and storage policy was launched, the price of the new cotton went down as the acquisition and processing volume of new cotton increased, and a small number of pactions began in October 8th.

On the whole, the following four factors affect cotton prices in the future.

First, supply is increasing.

This year, cotton production both at home and abroad has increased significantly, and the supply of cotton is more than needed worldwide. The cost of foreign cotton has already been lower than domestic cotton prices, and the gap between actual import price and domestic cotton price has shrunk rapidly.

As of October 13th, the price of cotton under the 1% tariff was higher than the domestic cotton price of 579 yuan / ton, compared with 3026 yuan / ton last month.

The pressure of increasing cotton supply has been reflected in cotton prices both at home and abroad.

After the middle of October, a large number of domestic cotton were picked up. However, the enthusiasm of cotton growers and the enthusiasm of domestic cotton processing enterprises were not high.

According to the data collected from the national cotton market monitoring system, seed cotton prices fell by 22.2% compared with the same period last year, while the average price of agricultural products increased by 15.7%.

Therefore, most cotton growers are still reluctant to sell.

The shrinking of processing profits of cotton enterprises also led to low enthusiasm for its acquisitions.

The price difference between lint price and seed cotton purchase cost can reflect the situation of cotton processing enterprises' income (regardless of processing fees). Since mid September, the income of cotton processing enterprises has declined rapidly, and many cotton enterprises have shown that the current acquisition processing costs have been upside down.

Due to the lack of enthusiasm for sales and acquisitions, the recent progress in acquisition processing will remain slow.

The two is slow demand.

The domestic textile market has entered a relatively stable state after a sharp decline. Sales and procurement behavior has tended to be normal. However, under the relatively dim prospect of clothing consumption, the pulling effect of the downstream is still hard to be reflected.

The three is to stabilize the policy of purchasing and storage.

The opening of the policy of unlimited purchase and storage has been reassuring for the cotton market. The national cotton working teleconference held in September 29th is clear that in order to stabilize the cotton production, the state will further improve and perfect the cotton temporary purchase and storage policy according to the implementation of this year, and will continue to announce the next year's temporary purchase and storage price next year before the spring sowing. Next year's purchase and storage is expected to help stabilize cotton prices.

Four, prices of related agricultural products continue to rise.

In 2012, the minimum purchase price of white wheat (three, the same below), red wheat and mixed wheat increased to 102 yuan per 50 kilograms, up 7 yuan, 9 yuan and 9 yuan respectively compared with 2011.

Cotton prices are expected to be supported from the price parity relationship between cotton and related agricultural products.

Since October 8th, a small number of pactions have been started. As of October 17th, the total volume of storage and purchase pactions has reached 4820 tons this year, including 1140 tons in the mainland and 3680 tons in Xinjiang.

With the increase of cotton market, the supporting role of purchasing and storage policy will be more obvious. If there are no other factors to interfere, the cotton market is expected to show a slow decline in the future, but the decline is also very limited.