Cotton Purchase And Storage Policy To Boost The Market

at present

Entering the traditional consumption off-season, but in May, textile and clothing export growth was positive, and the new year's national cotton purchase and storage was asymptotically, all of which were expected to rebound in the market. It is expected that the cotton price in the later stage will continue the pattern of rising weakness.

Cotton supply and demand continue to ease the pattern

According to the latest USDA data, global cotton output in 2011/2012 increased by 1 million 445 thousand tons to 26 million 789 thousand tons over the previous year, while consumption fell 1 million 738 thousand tons to 23 million 185 thousand tons.

The increase in production and consumption has led to the oversupply of 3 million 604 thousand tons of cotton worldwide this year, a record high in the past 16 years.

In 2012/2013, global cotton will remain in excess of 1 million 465 thousand tons.

In China, USDA data show that China's cotton supply will exceed 3 million 429 thousand tons this year. If the country receives and stores 3 million 130 thousand tons of cotton, the supply and demand of cotton in China will basically balance this year.

However, the high level of national cotton reserve inventory and the suppression of cotton prices in the late stage should not be overlooked.

In the new year, cotton production, consumption and import volume have been cut down to varying degrees in China. Output has dropped to 6 million 641 thousand tons, consumption has shrunk to 8 million 709 thousand tons, and imports have been reduced to 2 million 939 thousand tons.

On the whole, cotton supply in China is still over 871 thousand tons in the new year.

Downstream textile situation is still grim.

Since 2012, it has been more complicated.

Under the environment, China's textile industry shows the characteristics of domestic sales growth decline and export decline pressure.

According to the national development and Reform Commission statistics, from 1 to May, the retail sales of textile enterprises above designated size increased by 16.2% over the same period last year, down 7.3 percentage points from the same period last year. After deducting price factors, the actual growth rate of retail sales was only 12.3%, a decrease of 10.2 percentage points.

On the export side, from 1 to May, China exported 90 billion 642 million US dollars of textiles and clothing, an increase of 2.06% over the same period last year, a decrease of 24.47 percentage points.

If the price increase factor is deducted, the export volume of textile industry is negative growth.

It can be seen that the current situation of cotton downstream market is still grim.

Textile exports show signs of improvement

In May, the growth rate of textile and clothing export data has increased year after year, and the negative growth has shown a positive growth.

Exports are showing signs of improvement.

Of course, only one month's data are difficult to explain in essence, and need further observation.

New year's national reserve policy to boost the market

At present, for the next year's cotton purchase and storage policy, the state has not issued specific collection and storage rules.

But at the Chengdu Cotton Conference in May 17th, Zhang Xianbin, director of the national development and Reform Commission, said in response to questions: do not question the state's policy of collecting and storing the country. The next year, the state will continue to open up its storage and storage.

We believe that next year, with the support of the purchasing and storage policy, cotton prices will not be as deep as in 2008.

To sum up, the author believes that the start-up stage of downstream cotton consumption and the pace of national policy regulation are still the key factors leading to cotton trend.

With the end of this cotton year, the support strength of the new national cotton purchase and storage policy is becoming more and more obvious. With the consumption of cotton stocks in the market, it is estimated that the supply of cotton will be tight by mid August.

Therefore, on the whole, cotton prices in the later period may maintain a pattern of upward oscillation.