The Price Difference Will Suppress Domestic Cotton Prices And The Difference Between Domestic And Foreign Cotton Prices Will Continue To Widen.

June, Zhengzhou commodity exchange cotton futures once cause

Deteriorated and fell sharply, and then many profits made cotton price overshoot rebound, but the weak fundamentals inhibited the rebound in cotton prices.

Wanda futures said that domestic cotton prices were much higher than international cotton prices.

In the international market, lack of competitiveness, domestic consumption continues to shrink, cotton yarn and grey fabric prices keep falling. These factors, in turn, inhibit the uplink of domestic cotton prices.

As of June 29th, the 1301 contract of zhengmian main force was closed at 19205 yuan / ton, down 250 yuan / ton compared with 19455 yuan / ton at the end of May, continuing the long and medium term downtrend.

Domestic and foreign cotton prices continue to widen.

There are two main reasons for the difference in price between inside and outside cotton.

Yu Jiang, senior researcher of agricultural products at the mid term Research Institute, said that on the one hand, the global macroeconomic slump and the decrease in cotton consumption, coupled with the overall oversupply of global cotton in 2012, led to a sharp decline in international cotton prices. On the other hand, domestic cotton had 2011 yuan of 19800 yuan per ton of storage and 2012 yuan of 20400 yuan / ton, which made the domestic cotton price decline significantly lower than the international cotton price, and the difference between domestic and foreign cotton prices continued to widen.

"The cotton market in the international market is mainly sold to the Chinese market, but now China's cotton reserves have been very large, coupled with the import quota restrictions, resulting in a large backlog of cotton in the international market and the decline in cotton prices."

Zhang Wenmin, general manager of Wanda futures cotton industry division, said.

However, the difference between inside and outside cotton prices has narrowed slightly in the past half a month.

Shanghai mid-term Futures Research Institute saw thunder, the main reason is that the international cotton price rebounded slightly in the US cotton, the US cotton planting area is expected to reduce, supporting the international cotton price.

Founder cotton researcher Cai Pingxia also believes that the probability of decreasing the price inside and outside cotton gradually decreases.

"But considering the slow recovery of the global macro-economy and the downturn of downstream consumption, the cotton supply and demand pattern is difficult to change in the short term.

Therefore, domestic and foreign cotton price inversion phenomenon will also exist for a long time.

Zhang Wenmin believes that the spread of cotton at home and abroad is likely to further expand. "Now the supply of cotton is increasing, and Australia and Brazil's cotton have been listed.

In the next few years, if new cotton is listed, if the state does not increase the quota of imported cotton, the price of cotton will go down further, and the difference between domestic and foreign cotton prices will continue to widen.

Price differentials will suppress domestic cotton prices

The poor cotton price also restricts the growth of domestic cotton prices.

Insiders said that because domestic cotton prices were much higher than the international cotton prices, they were not attractive to the cotton mills, and domestic textile enterprises used imported cotton extensively, and some traders began importing cotton with full tariff, which led to the increase of domestic cotton sales pressure and the decline of spot cotton prices.

According to statistics, China imported 502 thousand tons of cotton in May, an increase of 357 thousand tons compared with the same period last year, an increase of 246.2%.

From 1 to May, China imported 2 million 580 thousand tons of cotton, an increase of 113.8% over the same period last year.

Zhang Wenmin said that at present, there are 700 thousand tons to 1 million tons of imported cotton in the bonded warehouses of major ports, but cotton without quotas can not enter the domestic market.

"If the country continues to issue quotas for imported cotton, these cotton can enter the domestic market at any time."

Zhang Wenmin said.

"Most of the present

The quota of the traders has been used up, and the import quota is so tight that the imported cotton can not be cleared.

Yu Jiang said, "because the price spreads are too large, it has triggered the arbitrage operation of buying cotton and cotton throwing Zheng cotton, and the trend of US cotton will be stronger than Zheng cotton in the near future."

"2011/2012 cotton year, the state has issued about 2 million 500 thousand tons of cotton import quotas, and it is unlikely that the quota will be re issued later."

Cai Pingxia said that in the new cotton year before the market is really improving, the state will still control the quota quotas, which will to a certain extent support the domestic cotton prices.

Focus on short term trading opportunities

After the sharp decline in May, Zheng cotton is currently in low oscillation. In July 2nd, the 1301 main contract of zhengmian main contract increased, and it continued to rise in July 3rd. It is estimated that cotton prices will be close to 20400 yuan / ton in the future.

At the same time, a large number of registered stocks will be very strong pressure on Zheng cotton, with the September contract delivery approaching, Zheng cotton prices will continue to close to spot cotton prices.

"Zheng cotton will maintain a short-term rebound but a weak medium and long-term form.

The real rally will not come until at least next year.

The main reason is that inventory is too high and needs digestion. "

See thunder.

Cai Pingxia believes that in the next 1 to 2 years, cotton prices will remain relatively stable oscillation trend, the bottom of cotton prices will continue to uplift.

In the medium term, if there is no major risk event in the latter part of the macro scale, it is unlikely that cotton prices will continue to fall.

In the short term, in July and August this year, the cotton basic weakness pattern was hard to change.

"August may be the turning point of the domestic cotton spot price. In July or early August, there will be a final fall. After the return of internal and external spreads, Zheng cotton will stabilize."

Yu Jiang said, "in September 1st, the new cotton year will be started and stored. The price of 20400 yuan / ton will have a positive effect on the trend of Zheng cotton."

However, Cai Pingxia said that the purchase and storage is the main factor to support China's cotton futures price at the current price level, but it is not the driving force for higher futures prices.

"If the macroeconomic situation and consumer demand improve, or weather anomalies and other factors lead to higher futures prices, the huge stock of national reserves will suppress the uplink of cotton prices."

In view of the fact that cotton prices have experienced ups and downs in the roller coaster market, the latter will maintain a relatively stable trend. Cai Ping Xia suggests that investors should pay attention to short-term trading opportunities and should not overlook too much.

"In particular, industrial customers should learn from previous investment lessons, train their futures professionals, make flexible use of futures tools, and gradually improve their risk management capabilities."

Cai Pingxia said.