There Are Four Uncertainties In The Current Cotton Market.

One thing to be sure is that no matter what the Chinese government's unlimited purchasing and storage policy is, the India government prohibits exports to raise the international quotations of India cotton or whether macroeconomic regulation keeps the high inflation level continuing and the bottom of the cotton price is strong enough to make it difficult for cotton to return to the low price of the past. Judging from the supply and demand situation this year, the supply pressure is not decreasing, consumption continues to be weak, and the restricting factors of cotton price rising are very obvious. USDA's March forecast showed that global end inventories increased by 31.9% to 13 million 569 thousand tons, while inventory consumption rose to 57.3% from 41.3% in the previous year, the highest in nearly ten years. While China's cotton market is declining in terms of consumption, output and imports have increased, resulting in an increase of 73.1% to 4 million 372 thousand tons in final inventory and an increase in inventory consumption ratio from 25.2% to 46.2%.

It is worth noting that although India limits cotton exports Supporting the international cotton price, but low price cotton flows into India, its low price textile products will once again flow into the international market, which will also have negative impact on China's textile exports.

The dual factors of system and currency determine the fluctuation space of cotton price, and the changing trend of supply and demand, inventory and de stocking determines the trend of cotton price. This year's cotton price is difficult to have the trend of action, complex internal and external environment makes investors disagree on the market, but there are some wave bands when price distorts.

According to the survey of cotton reserves, the national cotton industry inventory in March was about 1 million 23 thousand tons, an increase of 6.4%, an increase of 17.6% over the same period last year, an increase of 7.3% over the past three years. Although the yarn and cloth production rate of textile enterprises has rebounded slightly, it is still at a low level for nearly three years, and inventory backlog is obvious. The current state of loose supply and sluggish consumption determines that cotton prices are still in a weak position, and the band investment ideas are empty. In practical operation, we also need to be vigilant against possible risk factors in the future.

First, 2011 Chinese textiles and garments Exports fell sharply, up only 0.5% over the same period last year. Textile manufacturers predict that the demand for textile and clothing exports will still be insufficient in the first half of 2012, with negative or negative export volume. The crisis facing the textile industry has aroused concern among the industry. The representatives of the two sessions called for a reduction in the tax burden on the industry. If the relevant support policies are introduced later, it will stimulate consumption, or lead part of the cotton demand.

Second, in March 30th, the end of the purchase and storage period was 5 months from the date of the new year in September 1st. This period is the time window for the issuance of import quotas, and the circulation of imported cotton and domestic cotton may promote the convergence of internal and external spreads. If the consumption season does not start as usual, it will not rule out the possibility of falling domestic cotton prices. At that time, for cotton trading on the market, the 19800 yuan / ton purchase and storage price will be invalid, and 20400 yuan / ton will only be effective for new cotton next year.

In third, 4 and May, the cotton sowing period and the subsequent seedling growth period were confronted with unknown weather conditions. The distribution of cotton fields at home and abroad is wide and scattered. The occurrence of local disasters may be very large. The area and degree of disaster need to be traced and measured.

Fourth, in recent years International cotton market The situation of production and marketing has changed greatly, and the proportion of global share of various countries has also changed significantly. In terms of output, India has surpassed the United States, second only to China. India has a large cotton growing area but low yield per unit area. In the future, India will probably become the largest cotton producing country by improving technology. In terms of consumption, the proportion of consumption in the United States has dropped significantly, and the proportion of China's consumption has dropped slightly, while the growth of consumption in India, Pakistan and other countries is expected. On the export side, India, Australia and Brazil account for an increasing proportion of exports, while the US share rapidly shrinks. This series of changes also has an indirect effect on the pricing of cotton in China and the United States. The international influence of India and other countries in the cotton market has gradually increased, and the supply and demand of cotton and the change of cotton market policy are also the risk factors that deserve attention.