Cotton Prices Fluctuate Last Year. Where Will The Price Go This Year?

In 2010, domestic cotton prices rose sharply and hit record highs, which made people heartbeat and fell panic. Cotton growers, cotton producers and textile enterprises in the cotton industry chain were "entangled" in cotton prices.

This year, the acquisition of new cotton has begun, and how are cotton prices going? With these questions, the author made an investigation of cotton industry in Dezhou, Shandong province.

Cotton prices skyrocketed last year

Dezhou is located in the northwest plain of Shandong Province. It is one of the key cotton producing areas in the country. Its annual cotton planting area is 200-300 mu.

In the middle and August of last year, a continuous high intensity rainfall and cloudy weather in Dezhou had a great impact on cotton yield and quality. 90% of seed cotton was below grade four or below four, which was lower than that of the whole year. The average yield of seed cotton was only 410 kg, which was more than 20% lower than that of normal year.

When the new cotton came into market in September last year, cotton prices surged from 18300 yuan / ton to 32000 yuan / ton in early November, rising by 70% in two months.

Cotton prices fell sharply in November 11th and fell to 26000 yuan / tonne at the end of November.

And then slowly increased to 28000 yuan / ton before the Spring Festival.

After the Spring Festival, it rose rapidly, rising to 31000 yuan / ton in late February and early March.

The main reasons for soaring cotton prices are: first, the reduction of cotton production nationwide in 2010, the reduction of resources and the increase of supply and demand gap; two, the tight supply of cotton on the international level, and India's announcement of the restriction on cotton exports, which exacerbated the contradiction between supply and demand. Three, the excessive liquidity in the country and the speculation in social capital made the cotton prices go up crazily.

As a commodity, cotton has its reasonable price. Too high or too low is not normal.

Beginning in mid March, cotton prices and yarn prices were on the high side, textile exports were frustrated, export orders were greatly reduced, and India's propaganda lifted the export restrictions. Cotton prices and yarn prices continued to decline sharply at home and abroad.

By the middle of August, cotton prices dropped to around 19500 yuan / ton, and 37% in seven months, which was lower than the national reserve price of 19800 yuan / ton.

Cotton price "roller coaster" style ups and downs, cotton farmers, cotton traders, textile enterprises are not injured.

Cotton farmers are reluctant to sell, wait and see, the progress of the sale is obviously slowing down. In the past years, the acquisition and processing of the Dezhou region in the early May basically ended, and the acquisition progress was only about 70% this year to the beginning of May.

Cotton acquisition and processing enterprises dare not open up acquisitions, stop and stop, cotton prices fell after large inventory of enterprises serious losses.

The cotton yarn of textile enterprises is seriously unsalable, the stock has increased sharply, the enterprise limited production and shutdown, and a large number of workers leave the holiday.

Textile enterprises are in a difficult position.

Dezhou is not only a big cotton producing city, but also a large cotton market.

The city has 415 Textile Enterprises above Designated Size, including 247 cotton spinning enterprises, 5 million production scale, and 450 thousand tons of cotton per year, with the capacity of 1/7 in Shandong and 1/20 in the whole country.

Cotton prices have fallen rapidly since the beginning of March, and cotton yarn prices have continued to decline sharply. 32 pure cotton yarns dropped from 40000 yuan / ton in early March to below 27000 yuan / ton in late August, a 33% decline.

When the price of cotton was high before and after the Spring Festival, textile enterprises generally received large quantities of stock, and cotton prices and yarn prices fell sharply, resulting in serious losses for textile enterprises.

Cotton prices skyrocketed and plummeted. Spinning enterprises could not take long orders and large orders. They could only pick up short lists and small orders, and enterprises could not arrange production normally.

From April to the end of July, the sale of cotton yarn was extremely difficult. 80% of the small and medium-sized cotton textile enterprises in Dezhou were in the state of limiting production and shutting down production.

According to the survey, from the end of August, with the steady growth of cotton prices and the slow rise of yarn prices, the price of yarn has stabilized and slightly risen.

It is understood that in the process of cotton prices and yarn price ups and downs, textile enterprises generally suffered losses. Some enterprises suffered serious losses and hurt their vitality. A few enterprises would probably go bankrupt and bankrupt.

Cotton prices are mainly stable this year.

According to the China Cotton Association monitoring, in 2011, the total area of cotton planting in China was 80 million 180 thousand mu, which increased by 4.1% compared to the same caliber.

In late 5-8, the climate of the whole country is more suitable for cotton growth. Although some areas are affected, the overall growth is good. The output is expected to be higher than the previous year, with a total output of 7 million 380 thousand tons, an increase of 11% over the previous year.

In 2011, the situation facing the domestic textile industry is still very complex, and there is great difficulty in the rapid growth of the industry.

First of all, domestic inflation pressure is still relatively large, monetary tightening policy will not change temporarily, enterprises financing difficulties and cost increase.

Secondly, the international economic situation is changing, the demand is unstable, the RMB exchange rate is constantly rising, the international competitiveness is weakened, and the export is uncertain.

Third, the prices of all kinds of materials such as labor, raw materials, energy and so on are rising, and the cost is rising too fast for enterprises to digest.

Therefore, the growth rate of the textile industry will continue to slow down in the new year. It is estimated that the cotton demand will remain at the level of the previous year, and the demand will be about 10 million tons, when the domestic supply and demand gap will be about 2 million 700 thousand tons.

Internationally, most of the cotton producing countries in the 2011 have a bumper harvest of cotton, and their output has increased significantly to a record 26 million 700 thousand tons. The global demand has not changed much and basically stabilized at about 25 million tons. When the annual supply exceeds the demand, the cotton price has a downward pressure.

In order to ensure the interests of cotton growers, the cotton purchase and storage plan was launched in 2011. Since September 1st, if the price of the standard lint market has fallen below 19800 yuan / ton for five consecutive working days, the state will open up the stock. If the market price is higher than 19800 yuan / ton, it will follow the market.

Since the end of August, domestic cotton prices have stabilized and are basically stable at around 20000 yuan / ton.

According to the above analysis, it is possible to see that cotton supply exceeds demand in the whole world in 2011, and domestic textile enterprises still have difficulties in operation. The demand is basically stable at the previous year level. The space for cotton prices to rise is very limited. It is impossible to have a 19800 yuan / ton reserve price and a sharp drop. It is estimated that domestic cotton prices will remain stable in 2011.

It is suggested that the majority of cotton farmers' friends should keep abreast of the cotton market and eliminate the mentality of selling and selling in a timely manner, so as not to cause unnecessary losses.