Cotton Market In May Is Expected To Be Temporarily Stable.

Recent Zheng

At present, the northern hemisphere is in the cotton growing stage and the southern hemisphere is in the cotton harvest stage.

Judging from the output and planting area of the major cotton producing countries in the world, the cotton price in this year's planting season is obviously lower than that of last year. The decline of cotton planting area in the northern hemisphere can be predicted in the market.

At the beginning of the month, the US Department of agriculture's forecast of us planting area showed that the reduction of 11% was actually lower than that of the market, and the market is expected to reduce more. The reason is that the expected profit of planting soybeans is higher than that of cotton.

India 2012/13

In March 2012, China imported 625 thousand tons of cotton and imported 3 million 241 thousand tons in 2011/2012, an increase of 86.6% over the same period last year.

However, from the statistics of bonded areas and bonded warehouses, a total of 219 thousand tons of bonded goods were imported in March, and the port has accumulated 940 thousand tons of bonded goods.

Due to the small amount of quotas, the consignment cotton in the backlog has reached nearly million tons, and the quota pfer price has risen to around 3000 yuan / ton.

The recent rumor of the issuance of quotas in May will start again. If the quota is in place, it can effectively compensate for the difference between the inside and outside cotton prices, and the spinning enterprises can also get more replenishment with cotton.

Although the downstream textile enterprises adopted the strategy of buying and using with the purchase, with the gradual start up, business inventories showed a certain decline. As at the end of March 2012, the total domestic cotton business inventories were 2 million 870 thousand tons, 560 thousand tons lower than the end of last month, of which Xinjiang's commercial inventory was 700 thousand tons.

Although the overall inventory is still on the historical average level, the supply situation is hidden because of the increase in demand for high-grade cotton.

Recently, in order to solve the problem of cotton backlog in Xinjiang, the railway department decided to organize the cotton outburst in late April. The Urumqi railway administration should ensure that the average daily loading of cotton reached more than 220 vehicles.

2011/2012 cotton year, with the continuous high price of cotton at home and abroad, the price advantage of cotton yarn in India, Pakistan and other countries is clearly visible, and the advantage of China's low-grade yarn market is gradually showing.

Especially in the first quarter of 2012, the total import reached over 300 thousand tons, the cumulative year-on-year growth of over 10% over the same period since May 2010.

The reason is mainly due to the obvious increase in the number of public inspection, the number of low-grade cotton and the number of cotton type 200 has been significantly reduced.

According to the statistics of the Bureau, the amount of notarization reached 5541054 tons as of April 25, 2012.

The 2010/2011 annual public inspection volume is only 26 billion 827 million 280 thousand packs, more than doubled.

Coupled with the foreign price advantage of low grade cotton yarn, import has increased.

The cotton import per month is two times that of last year, plus the shrinking of cotton yarn exports. In two respects, the demand for domestic cotton is obviously affected.

In summary, the author believes that although the Zhenglong cotton market is still short in the middle and long term market, it is possible for the market to stabilize in the short term. The whole May may be the time window for the market to pick up slightly, because the time of spring ploughing, the progress of the quota and the international market.