Cotton Enterprises Should Not Hoard Cotton Because The Market Situation Is Not Optimistic.

"At present, the circulation of cotton in the market is about 1 million 100 thousand tons, including 800 thousand tons of Xinjiang cotton and 300 thousand tons of cotton in the mainland."

The industry said that compared with previous years, the current market circulation of cotton is much less, and last year the lowest cotton circulation reached 2 million 50 thousand tons.

It is understood that in the downstream consumer downturn, as a result of State purchasing and storage price support, many cotton trade enterprises profit has not been greatly affected.

Some industry sources said that the state reserve cotton storage capacity is seriously insufficient, and the possibility of dumping storage wheel in the second half of this year is greater. Cotton trade enterprises should try to reduce cotton hoarding.

The 2011 year cotton temporary collection and storage online paction ended in March 31st this year. Since last September 8th, the cotton temporary storage and purchase plan was launched to the end of March this year, a total of 907 cotton enterprises participated in the storage, and 3 million 125 thousand tons of cotton were actually traded. The number of cotton purchasing and storage accounts for 49% of the national cotton output in 2011, reaching a record high in the past 2011 years.

"All of our cotton is in storage. At present, there is no stock in the enterprise. The cost of storage is higher than that of our purchase.

Through the storage, in the industry downturn, compared with last year, there has been no big decline in corporate profits.

Du Chengzhong, general manager of Wuhan Chu Du cotton trade, told reporters.

"Now the whole intermediate link.

Probably not much, but because of the large price gap between inside and outside, cotton merchants' import enthusiasm has increased, and some cotton trading enterprises are still in high storage.

Insiders said that because of the end of the purchase and storage, cotton traders did not have the channels to ship at present, and the mindset of cotton trade enterprises with large quantities of cotton will change.

"At present, there are many imported cotton that have no quotas and letters of credit soon expire, and many enterprises are worried."

Qi Zhiyun, director of the Tianqi Futures Research Institute, said that the quotas issued in May could save a number of enterprises, but if they were repressed for two months, they might have to pay a heavy price.

It is understood that the 2012 cotton purchase and storage price of 20400 yuan / ton, compared to 2011 tons per ton increased by 600 yuan.

"We estimate that in 2011, China's cotton reserves have acquired 3 million 130 thousand tons of domestic cotton and 1 million tons of imported cotton, and the storage capacity of cotton reserves will be seriously insufficient in 2012, so the number of storage containers will be very large."

Zhang Wenmin, general manager of Wanda futures cotton business division, expects that the reserve cotton will probably store 1 million tons to 1 million 500 thousand tons of cotton in the second half of the year, and the first throw will probably be 300 thousand tons of cotton stored in 2009.

"For this year's cotton enterprises, I do not think hoarding cotton is the best strategy."

Qi Zhiyun said that enterprises need to avoid speculation, if hoarding cotton, we must make use of futures market to avoid risks.

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The longer the time is, the higher the inventory cost of the enterprise is. The hoarding of cotton will not make use of the futures market for hedging, and enterprises will easily lose money.

Qi Zhiyun said that the futures market is a booming market and enterprises need to take part in it.

In addition, enterprises will make more profits than cotton trade only if they use the function of financing in the financial market. If an enterprise does not rely on the strength of the financial market, it is difficult to be bigger and stronger.