The "Warning" In The Cotton Market Has Not Yet Been Lifted.

The state will implement temporary collection and storage

This year, the news of imported cotton is no longer issued quotas, and the cotton futures price has increased considerably recently.

However, from the industrial perspective, the textile enterprises are still in the "endless winter" because of poor sales, and the "warning" of the cotton market has not been lifted.

Market storage cotton limited supply and demand will be tight before loosening

"In September, some enterprises in some parts of the country took a wait-and-see attitude because of the uncertainty in the actual collection and storage.

But on the basis of policy seriousness and social and economic stability requirements, the purchase and storage is expected to be carried out smoothly before December, while dumping will also ensure market supply, while consumption in winter and Spring Festival or boost cotton consumption.

Chen Baoqin, general manager of China World Trade Center futures Jinjiang business department, said: therefore, before December, the pressure of cotton supply in the market will not be too great. After December, with the majority of new cotton storage, the demand for social and economic stability is not so high. Cotton consumption is facing a low season. The pressure of cotton supply will increase, and cotton will show a tight and loose situation in supply and demand, and the cotton market will show a strong and weak structure.

So, as a cotton business, how can we control risks in this fluctuating market? For this reason, Chen Baoqin said, since 2004, cotton futures contracts have become an important part of China's cotton circulation market system since it was listed on the Zhengzhou Mercantile Exchange.

In the past eight years, the involvement of cotton enterprises has been increasing. The way to lock in the futures market and hedge risks is becoming more mature.

Six key points for cotton hedging

"Enterprises do not guarantee, if not, but how."

Chen Baoqin said, in fact, the future of enterprises is summed up as follows: first, accurate positioning and knowing what they are doing.

Two, control risk, mainly trade or production?

The enterprise wants to buy cotton, it can be taken from futures, Fu Dingjin, which is equivalent to managing inventory.

500 tons a month, paying 10% deposit, the price can not move again, when to pick up what time to pay the money, the funds are relatively loose.

Last year, the cotton cliffs fell, but textile companies had orders and needed cotton, knowing that they would still fall tomorrow, and today they must buy cotton or else they would stop production.

What should we do? First we can remove the cotton, and we can settle it two times. After 3 months, the cotton is spun into yarn and then settled again. Then, the shift is carried out until it can not be moved again, and it can give him two settlement.

"In general, risk control should be the first priority."

Chen Baoqin said, especially small businesses, futures as a defensive tool to use is still relatively easy to use.

In addition, Chen Baoqin said that many cotton enterprises' practical experience shows that there are six key points for hedging cotton futures.

First, it is necessary to make clear the direction of the cotton market. This is the most important thing. If the direction is not clear, it will end in the round. Second, setting the extreme highest position and lowest price is also critical; third, confirm that all spot positions are set as 100% of the total futures business; fourth, it is necessary to build positions in the futures market at different stages in different stages; fifth, we need to optimize the adjustment of warehouses, and at the same time we need to control risk, margin and forecast money; sixth, finally, the expected target prices and profits.

In short, through these six factors

Risk avoidance and profit taking is a reference to LB and LF.