Buy Or Sell Cotton Traders Stop And Wait And See

Reduced production, low prices, and purchasers

The sharp fluctuations of cotton prices and the occurrence of selling difficulties in Yuncheng are not only related to cotton farmers themselves, but also to the current supply and demand situation in the domestic and international cotton market.

According to Wei Feng, Minister of operations of Shanxi cotton and hemp company, although Shanxi's cotton output and quality are affected by climate this year, it can still be counted as a bumper harvest year for cotton and the total supply is not short. In the context of global economic cooling, China's textile orders are decreasing, cotton demand is not optimistic, and the supply of cotton is generally abundant.

The report from China Cotton Association shows: "under the current economic situation, textile enterprises

Some futures researchers say that one reason for the huge fluctuation in cotton prices is the injection and withdrawal of the "capital bubble". Last year, a large amount of capital entered the cotton market and cotton prices climbed.

According to the survey, the price decline and the uncertain market prospect led to the risk of cotton purchasing increased. In the downstream of the cotton industry chain, the processing enterprises were unwilling to stock up in the spirit of "buying up, not buying or falling", and some individual traders and small and medium sized enterprises that acquired loans from loans and hot money began to stop and wait.

In Yuncheng, there are many cotton processing sites that used to be the "home" of local cotton, but at present, these "homes" have been unable to protect themselves.

The owner of a cotton ginning factory in HUPO village, East Township, Ruicheng County, Yuncheng, said: "we don't have the bottom of our hearts. At this time, we have to receive cotton as if we are holding a bomb. If the price falls again, it will be a big loss."

Wang Jianheng, general manager of Shanxi cotton and linseed company Yuncheng branch, said that the state began to carry out temporary storage and storage of cotton from the beginning of this year. The price of temporary storage and storage is 19800 yuan per ton of standard grade lint to the warehouse and 8.6 yuan per kilogram of seed cotton. The price of seed cotton market in Yuncheng has been lower than the national temporary storage price.

"Our cotton and linseed company is the main force of the acquisition before the cotton purchase market is liberalized. But in recent years, the shortage of funds has made the main channel of supply and marketing cooperatives, which is also facing the dilemma of no money to cotton, and it is difficult to play its due role. Yuncheng branch's 63 thousand square meter warehouse can store nearly 60 thousand tons of cotton, but it is all idle now."

Wang Jianheng said.

Because of its own capital,

However, in order to avoid risks, the Agricultural Development Bank has issued new opinions on the supply and management of cotton purchase funds in recent years. There are two major changes in its lending methods: one is to focus on warehouse receipts and the other two is to adopt the mode of guarantee and property mortgage.

Wang Jianheng said: "according to the actual situation of the cotton enterprises in the supply and marketing cooperative system, the first method will increase the large number of enterprise costs per ton, and it will be difficult to carry out when the cotton has entered the era of meager profits". Because the supply and marketing cooperatives system has no large enterprises, the guarantee qualification is not enough or the insurance coverage is very small, the second methods can not operate.