An Analysis Of Severe Cotton Storms In Xinjiang This Month
"In the background of the pformation of domestic cotton supply and demand pattern from partial loosening to tight balance, nearly 100 thousand acres of cotton have been cut off.
Xinjiang cotton
Whether the wind disaster will become a hot topic of speculation, many bulls are waiting to see.
Some market participants revealed to reporters.
According to the relevant departments, since April, Xinjiang autonomous region has suffered serious natural disasters, of which a large area of strong winds, cooling and dust weather caused more than 75 acres of cotton disaster, nearly 100 thousand acres of crops.
There is also a view that although the area of cotton planting in spring sowing season has once again become a hot spot in the market speculation, textile fundamentals remain weak and there is no sign of improvement.
Short term cotton prices are not strong enough to move.
Supply and demand turn to tight balance
Green futures analyst Ma Zhan believes that the global pattern of loose cotton supply will change, which will have a greater supporting role in cotton prices.
He introduced 2011/12's global cotton inventories to a record high in China.
Cotton yield
And final inventory is also at a record high of 7 million 260 thousand tons and 5 million tons respectively. China's cotton consumption is estimated to be 9 million 220 thousand tons, and China's cotton consumption ratio is at a high level in recent years.
However, in 2012 cotton production area or reduction, domestic cotton production may be reduced to less than 6 million tons.
Affected by the low cotton prices in 2011 and the increase in planting costs, cotton growers will have a willingness to plant cotton.
According to the National Bureau of statistics April 13th, according to the survey of more than 70 thousand farmers' planting intentions in the country, the sowing area of cotton decreased by 4% in 2012.
According to customs statistics, the number of imported cotton reached 3 million 360 thousand tons in 2011, accounting for more than 30% of the total cotton consumption in China.
Another industry association, the China Cotton Association, also announced on its website that the cotton planting area may be reduced by 16.7% in 2012.
"The reduction of global cotton planting area has become a reality, and the total supply of cotton will decline in the new year."
Dong Shuangwei, director of futures research and development, said that at present, the northern hemisphere began to sow cotton in spring, and the reduction of sowing area has become a consensus.
According to the April cotton report of the International Cotton Advisory Committee (ICAC), the cotton planting area in China, the United States and India will reduce to varying degrees in 2012. The cotton planting area will decrease 5% to 34 million 200 thousand hectares, and the output will decrease 6% to 25 million 470 thousand tons compared with the same period last year.
Weak consumption in textile industry
"In the short term, market concerns are still on consumption."
Xu Zhou, the East Asia Futures Research Department, said that according to the National Bureau of statistics, the new orders index and production index of the domestic textile industry and clothing industry declined in March, and the domestic textile industry is still facing the situation of order reduction and oversupply.
According to China's cotton market monitoring data, the price difference of domestic cotton yarn in March was 6789 yuan / ton, down 362 yuan compared with February, and downstream profit margins continued to shrink.
In terms of exports, domestic exports to Europe and the United States have been greatly reduced since the beginning of this year.
China Textile
According to the association data, as of February, the number of pure cotton garments exported to the EU has decreased by 21.77%, and the number of garments exported to the United States has decreased by 15.23%.
Ma Zhan said that after the Qingming long holiday, the production of textile enterprises did not show a marked improvement. Some enterprises started to operate at a low rate, and the finished products inventory was relatively large. The purchase of lint was relatively cautious.
Three ways to avoid vicious circle
"Because of asymmetric information on production and consumption, there has always been a" big year "vicious circle in the agricultural product market, and the majority of cotton farmers and small and medium cotton enterprises are often the losers.
Some market participants believe that in order to break this vicious circle, we must start with the good use of futures price information and so on.
First of all, increase support for cotton planting and stabilize domestic cotton planting area.
For example, we should increase seed production, increase yield per unit area, ensure stable domestic supply, reduce dependence on the international market and raise the pricing power of Chinese cotton.
Secondly, we should improve the market regulation mechanism and normalize the measures such as huff and puff of cotton reserves, adjust the rhythm of import cotton quotas and speed up the pportation of New Territories cotton.
Finally, Zhengzhou cotton futures have begun to take shape of commodity pricing power, and the price discovery function is becoming more and more perfect. The upstream and downstream parties should make good use of the price signal to adjust planting, production and procurement.
In fact, many enterprises have learned to use the futures market flexibly.
Dong Shuangwei said that in the middle of last year, Zheng cotton rose ahead of the outside market, leading domestic enterprises to order the resources at the end of 2010 in the US cotton market ahead of time, thereby reducing a lot of expenses. Some trade enterprises used Zheng cotton's function of finding prices, imported them at low international markets or bought ahead of the market in Zhengzhou cotton market, and obtained huge profits.
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