Purchase And Storage Support Is No Longer &Nbsp; Cotton Price Is Lost.

2011/2012, which began in September last year. Acquisition of State Cotton stores At the end of the month, it will end. In the context of the sharp increase in domestic cotton production and the continued weakness in textile and clothing consumption this year, the State Reserve purchase has formed a strong support for the domestic cotton price trend. However, with the closing of the purchasing and storage work, some market participants began to worry that after the purchase and storage stopped, the domestic cotton market would enter the "vacuum period" and the underlying support disappeared, resulting in a sharp decline in cotton prices.

　 Purchase and storage to change domestic cotton supply and demand

New financial reporter access to relevant data learned that since last September, the implementation of the cotton purchase and storage policy, as of last week, cotton purchase and storage cumulative turnover has exceeded 2 million 800 thousand tons, according to the current average daily turnover, it is estimated that the end of the purchase and storage, the total volume will be close to 3 million tons. The continued purchase of the State Reserve significantly changed the supply and demand of cotton in China, and strongly supported the trend of cotton prices since last September.

Liu Chunfang, an analyst of capital futures agricultural products, told the new financial reporter that the domestic cotton output this year was about 7 million 250 thousand tons, an increase of nearly 10% over the previous year. In addition, cotton imports increased significantly since September last year, further increasing domestic cotton supply. In terms of consumption, the demand for downstream consumption, especially cotton textiles, has been restrained by the continuing slowdown in the global and domestic economy. The domestic cotton market in 2011/2012 has shown a situation of oversupply in recent years. However, with the continuous progress of the acquisition of the State Reserve, the situation of oversupply of cotton in China has now been significantly reversed. Close to 3 million tons of high-grade cotton has entered the national reserve warehouse, and the supply and demand pattern of cotton has changed in the domestic market.

　　 Cotton prices are under pressure.

Since 2012, Domestic textile exports And domestic sales are not very optimistic. On the one hand, due to the external environment such as the European debt crisis, orders for export products are insufficient; on the other hand, domestic raw material prices are higher than international ones, and foreign orders begin to transfer to countries such as Southeast Asia. When interviewed by some new textile and garment enterprises, the new financial reporter learned that the export orders for textile and clothing have declined sharply, and many textile enterprises believe that this downturn in the two quarter is still difficult to change.

Because of the shortage of orders and the decline of exports, the inventory of textile enterprises is generally high. In order to alleviate the pressure of cost and capital, some manufacturers can only deal with the reduction of cotton purchase and the extensive use of substitutes. Zhou Guowei, a long-term contact with Fujian related enterprises, told the new financial reporter that at present, the inventory of cotton yarn and grey cloth in Fujian textile enterprises is still increasing. Cotton yarn inventory can be used for half a month, and the inventory of grey cloth has been able to meet the demand of 3 months or so. The pressure of inventory has begun to make it difficult for enterprises to turn capital into cash. In contrast, the stock of polyester staple fiber has been reduced to about 10 days from a year ago, and most enterprises have increased the amount of polyester staple fiber and reduced the amount of cotton.

Because of the large inventory pressure, in order to speed up the return of funds, many textile enterprises have increased the intensity of product sales, not only during the quotation but also in the previous period, but there is still room for a reduction in the actual turnover, but even if the textile enterprises are in a state of deficit, the turnover is still scarce. Textile enterprises generally reflect that the market is still dreary, and the signs of the peak season are not obvious.

Trading in the lint market has also begun to become cold. Zhou Guowei introduced to the new financial reporter, at present, Fujian Changting 329 lint to the factory price of 19800 yuan / ton, 429 grade lint to the factory price 19000 yuan / ton, although close to or even lower than the state's purchase and storage price, but the market volume is still less, most cotton enterprises still rely on the storage and storage, some can not reach the standard of storage and purchase of cotton into the market.

While domestic cotton is in a slump, a large number of cheap and high-quality cotton are still pouring into China. In the survey, Zhang Gen, the head of a textile enterprise in Hebei, told the new financial reporter that the difference between cotton prices at home and abroad is still relatively large, basically at 2000 yuan / ton, and the "three silk" (cotton filamentous impurities, editor's note) is small, the color is white, the maturity is high, and the advantage is obvious. Therefore, textile enterprises with import quotas mostly consider using imported cotton.

Guo Du futures agricultural analyst Liu Chunfang told the new financial reporter that the price of domestic cotton was significantly higher than that of the international market, and the pattern of large imports of foreign cotton continued from September last year to the present. According to the statistics of China Customs, in February 2012, China imported more than 600 thousand tons of cotton, an increase of nearly 90% from the previous month, a significant increase of more than 200% over the previous year. Since September last year, China's total import of cotton has reached 2 million 600 thousand tons, an increase of about 80% over the same period last year. The influx of imported cotton has increased the pressure of domestic cotton prices.

　　 Where is the end of the purchase and storage of cotton prices?

The delayed issuance of quasi tax quota temporarily supports the domestic cotton price. So far, the import quota of cotton sliding duty has not been released in 2012, to a certain extent, to inhibit the number of cotton entering the domestic market. According to statistics, as of March 15th, nearly 1 million tons of foreign cotton in China's main ports were hoarded in the bonded area, and the main reason for the failure of cotton to enter the Chinese market was the delayed issuance of quasi tax quotas. Some port traders and foreign businessmen reflected that, due to the news that there was no slip tax quota in the near future, the contract for foreign cotton coming into port in 3 and April was forced to postpone. It is understood that the shipping date of a large domestic trader nearly 100 thousand tons of cotton was pushed to 5 and June. On the one hand, because of the current port tax protection area, the accumulation of cotton, warehousing and import quotas are all more difficult. On the other hand, the pressure from the early stage of port shipment and customs clearance on the shipment of cotton is large, and the pressure of returning funds is large.

Next year's cotton purchase and storage price limits the decline in forward cotton prices. In early March, the relevant departments issued the next year's domestic cotton temporary purchase and storage plan, which will determine the purchase and storage price at 20400 yuan / ton, which is 600 yuan / ton higher than the current purchasing and storage price. Since the new purchase and purchase will only be implemented in September this year, the new purchase price will have limited support for cotton prices this year. In the long run, it will mainly restrict the downward trend of cotton prices in the next year.

The current price trend is critical to cotton planting area in the new year. Guo Du futures agricultural products analyst Liu Chunfang told the new financial reporter, according to past practice, 3 and April each year is the key period for cotton sowing in the main producing areas of China. Therefore, stabilizing cotton prices during this period is very important for raising the enthusiasm of cotton growers and stabilizing the planting area of cotton. The relevant departments chose to announce the cotton purchase and storage price in the next year in early March and postpone the issuance of the import quota for cotton sliding tax.

Because of the uncertainty of cotton planting area, cotton price has also formed a certain degree of support. The new financial reporter has learned that since the end of last year, domestic cotton prices have continued to fall sharply, and the cost of cotton planting has increased significantly. Compared with other crops, the advantages of planting cotton are limited, resulting in the current cotton farmers' planting intentions generally lower than the previous year, and some cotton growers have changed rice, corn, tobacco and other crops. However, the specific decrease of planting area will still need to wait until the end of planting.

about Late cotton With the end of the State Reserve purchase, the strong support for the cotton market in the early stage will be significantly weakened. In the short term, due to the suspense of planting area, the cotton price trend will be supported to some extent, and the slide of the quasi tax quota has also limited the decline of cotton prices. With the end of planting in 3 and April, the planting area of dust settled, the issuance of quasi tax quotas and the influx of large quantities of imported cotton did not exclude a sharp fall in cotton prices, or even below the possibility of bottom support since last September.