China'S Cotton Stocks Are Approaching 9 Million Tons Of Import Power Reduction

If China does not import anything in the next 6 years

What will happen? The latest forecast shows that China's harvest of new cotton stocks will climb to about 9 million tons this year, which will make up for the shortfall in consumption in the next 6 years, and the global cotton trade in the cotton season is expected to decline by 21%.

Up to now, China's national acquisition of cotton has reached nearly 3 million tons in the new year.

International cotton hit a record high of $2.197 a pound in March 2011, while this year it showed second poor performance in 24 commodities tracked by the S & P GSCI spot index, down 23% since 2012.

At present, ICE cotton futures are hovering near 70 cents per pound.

According to the report of Allenberg Cotton, the world's largest cotton trader, China's cotton stocks will rise to about 9 million tons after the harvest season this year, which will make up for the shortfall in consumption in the next 6 years.

Inventory changes in the world's largest cotton consumption countries will directly affect the trend of global cotton prices.

Joe Nicosia, chief executive of Allenberg Cotton, said that the Chinese government's purchases could increase to 5 million tons this year as the Chinese government increased its purchases to support domestic prices and raise farmers' income, compared with 3 million 200 thousand tons last year.

"As long as China maintains the policy of subsidized cotton farmers, the world will be inclined to overcapacity.

Can you imagine what kind of situation China will not import any cotton in the next six years? "Nicosia said." there are 13 million 900 thousand bags of surplus cotton outside China.

China's imports will determine the direction of the future cotton market. "

The US Department of agriculture's monthly report in October shows that by next July 31st, global cotton stocks may reach 79 million 110 thousand packs, an increase of 14% over the previous year.

China will import 11 million bales of cotton, down 55% from last year, while China's stock will grow by 21% to 36 million 610 thousand packs.

A packet of cotton weighs 480 pounds (218 kilograms).

The US Department of agriculture also expects cotton consumption in China to decline for third consecutive years from 2012 to 2013, down 5.3% to 36 million packs, while consumption in the previous year has dropped by 17%.

Because of China

The International Cotton Advisory Committee (ICAC) believes that the global cotton trade in the cotton season is expected to decline by 21% to 7 million 700 thousand tons.

In the 2012 to 2013 cotton season, global cotton stocks are expected to reach a record 16 million 400 thousand tons, up 17% over the previous cotton season.

Global cotton production and plant usage forecast reached 25 million 900 thousand tons and 23 million 400 thousand tons respectively, with an over supply of 2 million 500 thousand tons.

Because China's higher cotton prices than other parts of the world have affected the profits of China's spinning mills, the International Cotton Advisory Committee believes that the geographical conversion of cotton production from China to other Asian countries is currently in progress, and that the amount of cotton plants in India, Pakistan, Bangladesh, Uzbekistan, Indonesia, Indonesia and Thailand will increase in the 2012 to 2013 cotton season.

China's imports of cotton yarn have increased markedly since the beginning of 2012.

In the face of the sharp decline in global cotton trade and the increase in world inventories, the downward pressure on cotton prices has become increasingly evident.

Many analysts in China's cotton industry believe that the acquisition of state reserves will also provide support for the cotton market in the short term, but with the increasing storage and storage capacity, the pressure of future throwing and storage will also increase. Cotton prices will face enormous pressure next year, and may even fall to below 13000 yuan / ton in the future.

India, the world's largest cotton producer, announced last Friday that it would raise its minimum cotton support price to stabilize the already slumping cotton prices.

The lowest supporting price of medium long fiber cotton is raised from 2800 rupees / weight to 3600 rupees / weight, and the long staple cotton is increased from 3300 rupees / weight to 3900 rupees / weight, the execution time is from 2012 to 2013.

Meanwhile, the government of India has developed contingency plans to establish 288 acquisition centers in cotton planting state, and purchase 9 million bales of cotton at the lowest support price in 2012 to 2013 cotton year.

Cotton Corp has raised 150 billion rupees working capital for minimum price acquisitions.