Zheng Cotton Rose Hard To Sustain

India's ban on the export of cotton may boost the trend of Zheng cotton in the short term, but from a fundamental point of view, it is more difficult for Zheng cotton to continue to rally. During the two sessions, Zheng cotton or difficult to get rid of the pattern of interval oscillation.

The new cotton temporary purchase and storage scheme announced last week. store up The price increased by 600 yuan / ton compared with the previous year, but this did not bring much boost to the market. The news of India's ban on exports of cotton on Monday brought warm winds to Zheng cotton, but the rise was hard to sustain.

　 　 cotton Supply situation analysis

Storage and reduction of high-grade cotton supply. As of March 2nd, 2011 cotton temporary storage and storage totaled more than 2 million 700 thousand tons. After the Spring Festival, the turnover is about 10 thousand tons per trading day. According to this calculation, by the end of this year, the number of cotton reserves of grade three and above will exceed 3 million tons. Last year, the total output of cotton was about 7 million 200 thousand tons, and the cotton sold by the State Reserve accounted for more than 40% of the total cotton output last year. The high level of cotton that the state stores and stores, and the high grade cotton that can be circulated in the market is too few. This has obvious supporting effect on the price of high-grade cotton.

Cotton planting area is expected to decrease in the new year. In 2011, seed cotton prices plummeted and planting costs increased. According to monitoring, the average price of seed cotton in 2011/2012 was 7.67 yuan / kg, down 29.9% from last year. The sharp decline in planting income led to a decrease in cotton planting intention in 2012.

　　 Downstream textile industry continues to slump

Although Zheng cotton has bought and sold support, the drop space is almost locked, but another important factor affecting cotton prices is that the downstream demand has always been restricting cotton prices.

On the export side, we can see from European and American economic data that the European and American economies are showing signs of bottoming up, but our export links are lagging behind the trend of foreign economies. In addition, due to our country Raw material As compared with other export oriented countries, the competitiveness of China's textile exports has gradually weakened, which to a large extent restricts the rebound of China's textile exports. At present, the market hopes that the replenishment behavior after the Canton Fair in April can boost the cotton market, but the export situation of our textile industry will still be more severe in the future.

In terms of domestic demand, the promotion activities during the Spring Festival and the traditional consumption concept of new year's Eve have played a stimulating role in the sales of textile and clothing, and also promoted the rise of Zheng cotton before and after the Spring Festival. However, according to the statistics of China National Business Information Center, the growth rate of service retail sales of 50 key large scale retail enterprises in January slowed down year by year. {page_break}

No matter export or domestic demand, these two carriages can not effectively pull cotton prices up. Although there are support for storage and purchase, domestic cotton prices still do not have the conditions to rise.

　 China India cotton policy unscramble

At the beginning of March, the eight departments of the national development and Reform Commission, the Ministry of Finance and the Ministry of agriculture jointly issued the plan for the temporary storage and purchase of cotton in 2012 (September 2012 August 2013). It is clear that the temporary storage and purchase price of cotton in the 2012 year is 20400 yuan / ton, an increase of 600 yuan / ton over the previous year. The price of cotton temporary purchase and storage in the new year increased by 3% on the basis of 2011. In addition, the scope of collection and storage is moderately expanded, and the quality standard of storage and purchase will be relaxed accordingly.

However, we should also note that in the year 2011, the state reserve cotton is likely to reach 3 million tons, and it is not ruled out that the storage and storage of the national cotton reserves in 2012 will be possible. The effect of collecting and storing the market in 2012 may be different from that in 2011.

The India government issued a statement on Monday saying that all varieties of cotton should be banned from export and when it will be resumed. India is the second largest cotton exporter after the United States. US Department of agriculture monthly supply and demand report shows that since last May, China has imported 4 thousand and 800 cotton bags per month, or about 138 thousand tons, of India cotton. Combined with the current number of domestic cotton reserves, India's policy of banning cotton exports has limited or limited impact on China. Once domestic cotton prices rise, the National Reserve will surely throw cotton to stabilize the market. But in the short term, the international market supply is tight, pushing up the international cotton price.

To sum up, the news of international stimulus may boost short-term trend, but on the basic side, it is more difficult for Zheng cotton to continue to rally. During the two sessions, Zheng cotton or difficult to get rid of the pattern of interval oscillation.