Cotton Prices Drop And US Cotton Growing Heat Down

2011/2012 cotton planting year is doomed to be full of variables. The economic recovery degree of developed countries is different, and India's cotton export policy is repeated. These factors all affect the supply and demand of the cotton market. This also gives the industry more guesses about the trend of supply and demand of the coming new cotton growing year.

Not long ago, the representative of the US cotton industry from the National Cotton Association (NCC) and the American International Cotton Association (CCI) arrived in Beijing. Xia Kunlai, chairman of the delegation of the national cotton Federation cotton grower association (Clyde Sharp), accepted the interview with reporters, and expounded her own views on the hot spots of the new year's cotton planting area and the trend of cotton prices in the future.

For China, one of the important export markets of the US cotton, he has expressed his sincere desire and enthusiasm for deepening cooperation.

Deep communication is the prerequisite for win-win cooperation.

Reporter: what is the significance of the visit to China by the national cotton Federation of the United States and the international cotton association? Please briefly introduce the lineup of the delegation.

Xia Kunlai: just like in the past few years, the purpose of our trip is to better understand the situation of China's cotton price market, while maintaining the communication between NCC and China Cotton Association (CCA).

This year, our exchange visits covered all aspects of the cotton spinning industry chain.

Apart from Beijing, we will also visit Henan, Zhengzhou and Shanghai to visit partners in China's cotton textile industry, including spinning mills, storage facilities and ports.

We hope to provide Chinese enterprises with abundant production experience and share information. I think this will be beneficial to the future exchanges and cooperation between the two sides.

The National Cotton Association of the United States represents the 7 link of the cotton industry chain. The delegation has representatives from 4 links of the cotton industry chain, such as the representatives of cotton producers, representatives of cotton storage and inventory, representatives of cotton merchants and middlemen.

China and the United States are large agricultural countries and have many agricultural production resources.

The delegation of the United States came to China just as the Chinese cotton delegation visited the United States, all hoping to deepen their understanding of each other's culture and discuss some issues in depth.

Only when we have a comprehensive understanding of each other can we conduct more in-depth cooperation, which is very important to the industries of both countries.

Downdescending influence cotton grower planting enthusiasm

Reporter: at present, the international cotton price is in the downward trend, does this affect the enthusiasm of the cotton growers? According to the current planting situation, how much do you think the new cotton planting area will reach in the new year?

Xia Kunlai: as you said, the decline of cotton prices has indeed affected the enthusiasm of cotton growers.

Because of the decline of crop prices, cotton growers will choose to plant other crops and give up planting cotton.

In the eastern United States, this phenomenon is most prominent. Most farmers choose to grow soybeans and corn because they have price advantages.

In the western state of California, due to reduced rainfall affecting irrigation, production is expected to decline by 20%. Planting in Texas and other parts of the United States may be more consistent with the predictions of the USDA.

So, despite the warm climate this spring,

The planting provides good conditions, but we believe that the planting area in 2012/2013 will be slightly lower than the 13 million 150 thousand acre announced by the US Department of agriculture in March.

The estimated value of the National Cotton Association of the United States is between 12 million 500 thousand acres of ~1280 acres.

Now the cotton farmers all over the world are in a relatively difficult position. We have studied and invited financial experts to realize the hedging of cotton prices, stabilize cotton prices, and better protect the interests of cotton farmers.

Many cotton growers in the United States will work with market professional consultants or cotton traders to develop market plans to maximize profits.

Private Cotton Traders and specialized cooperatives play an important role in the whole risk management concept.

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Reporter: what kind of expectation do you have for us cotton output in 2012? What kind of impact will weather conditions have on cotton output?

Xia Kunlai: the weather condition has great influence on cotton output.

We expect this year's

The output is lower than last year.

The cotton harvest in Texas and Oklahoma was drastically reduced in 2011 because of the severe drought.

The drought has continued to affect cotton harvest in these areas this year, while other areas are in good condition this year, much better than last year.

Based on the above situation, we estimate that the US cotton output in 2012 is about 17 million bales.

Reporter: according to the latest report of the International Cotton Advisory Committee, a large number of cotton backlog stocks will bring heavy pressure to cotton prices in 2012/2013. How do you view this problem?

Xia Kunlai: at present, all countries have formulated countermeasures for the price trend next year.

This is true in China, the United States, India and Australia.

If these countries increase their reserves further, that will support the rise in cotton prices.

Conversely, if cotton reserves are reduced and the sale of cotton will be released, it will stabilize cotton prices.

In short, it depends on the supply and demand relationship in the cotton market.

Will continue to pay attention to the Chinese market

Reporter: due to the recent India's policy on cotton export, there are some changes in the global cotton supply market.

According to the report of the China Cotton Association, cotton imports from India account for 42.8% of the total imports, while imports from the United States account for 21.2%.

How do you see the impact of India's export policy on Sino US cotton trade?

Xia Kunlai: at present, China is increasing its import of cotton.

As we all know, the change of cotton import market is influenced by many factors, such as India's cotton export policy.

We understand the competitive nature of global cotton trade.

Cotton exporters such as India, the United States and Australia have been striving to increase their share of exports to China and the rest of the world.

Therefore, the change of cotton export policy of a country can directly affect the export of other countries.

Over the past two years, India has been changing its export policy from a role of export ban to a very active cotton exporter.

We are concerned that the abrupt and unpredictable changes in India's export policy will lead to greater uncertainty and volatility in the world's cotton market.

Nevertheless, we are still optimistic about the export of US cotton.

By the end of July this year, the cotton planting year in 2011/2012 is coming to an end.

The United States exports 11 million 400 thousand bales of cotton to China, which is expected to reach half of China's total cotton imports.

In 2012/2013, cotton exports to the United States are expected to reach 11 million 500 thousand bales of ~1200 million packages.

Although we do not have concrete estimates, the US export to China is expected to continue to account for 40% of its total imports.

Reporter: after experiencing the gloom of European and American economies, the industry generally focuses on Asian countries with relatively stable economic growth.

What do you think of this? What are your concerns about the Chinese market?

Xia Kunlai: at present, the global textile and garment industry is very concerned about the changes in the economic environment.

In the US market, unemployment is still at a high level due to the economic recession, and the recovery of people's consumption ability is rather slow.

I have to admit that the US retail market has developed quite mature, and the growth level in the future will tend to be gentle.

I think the growth of the global consumer market will be reflected in China and India in the future. This will also urge us to strengthen the US cotton promotion plan in these two countries.

In the field of cotton, China and the United States have always maintained good trade partnership.

With the continuous growth of China's economy, the cotton consumption market also shows great potential.

We hope to provide good quality cotton for China's cotton spinning enterprises.

At present, the price difference between cotton and chemical fiber in the Chinese market restricts the use of cotton by enterprises.

In other countries, cotton and polyester have the same price level, but in China, cotton prices are much higher than polyester prices.

Though faced with all kinds of challenges, we will work with CCI to carry out cotton promotional activities in China in the future.

From production to consumption throughout the entire industrial chain to show the advantages of cotton fiber, at the same time, I hope more Chinese enterprises can participate in, so that more consumers understand the good characteristics of cotton fiber.