Analysis Of Many Factors That Can Support Cotton Prices In The Cotton Market

From the present

From the market perspective, processing enterprises, traders and cotton mills have almost no operational ideas and profit margins. They may go wrong either to the left or to the right. They decide not only the US, Europe, China and Japan, but also the USDA's "conspiracy" report, what cards will be played by the Chinese government after the end of March 2013 and the export situation, and whether the consumer market will rebound as expected.

In the face of the current situation, many cotton enterprises and foreign businessmen predict that cotton prices will fall into a downward channel after the end of March 2013. The difference is whether the bottom will be 18000 yuan / ton, or 16000 yuan / ton?

What are the other factors that can support the cotton price in the cotton market?

1. The Chinese government will meet in 2012/13.

How many cotton? According to statistics, as of November 13th, 2012 cotton temporary storage and storage pactions totaled 2355120 tons, of which 746200 tons in the mainland, and 1608920 tons in Xinjiang.

At present, the progress of public inspection of Xinjiang cotton accounts for only about 50% of the output. (as of November 12th, about 2 million 190 thousand tons of public inspection has been done), as long as China will open up the stock before the end of March 2013, the total amount of storage will be no less than 3 million 500 thousand tons.

If the relevant department of the state investigates the 5 level cotton storage and storage in the affected cotton area of the mainland, it is not a rumor that the total amount of storage or storage will exceed 4 million tons.

So, before the Chinese government throws the store, the domestic cotton can be used in the market circulation very little (except the national cotton store), and the circulation of domestic cotton 3 and more cotton is scarce.

Two, how many import quotas will be issued by the relevant state departments in 2013? If there are still 5-10 tons of 1% tariff quotas extended to the end of February 2013 in 2012, plus the "894 thousand tons" new year 1% quota, the 1% tariff quota is still less than 1 million tons.

From the perspective of the state's encouraging export and the high total amount of state reserve cotton, it is unlikely that the issuance of tariff quotas will be increased, but the quota of processing trade will be increased at least 80-100 tons.

It is worth noting that if the main cotton contract for ICE cotton in 2012/13 continues to be below 70 cents / pound, the percentage of domestic cotton enterprises paying full customs clearance will increase significantly. So the author concludes that the actual number of imported cotton will not be less than 2 million tons in 2013.

However, from the quantity of bonded cotton, the contract for postponing shipment in 2012, and the output and export volume of India cotton, it is worth calculating the availability of high-grade cotton.

Three. In 2013, the global decline in cotton planting area, including China, is a foregone conclusion.

In recent years, the mainland of China

Affected by natural disasters, seeds and planting conditions and other factors, the output has been declining, and the quality of lint has also been declining. The lint yield of grade 3 and above has been significantly reduced. It is estimated that cotton production will gradually shift to Xinjiang in the next few years. The proportion of Xinjiang cotton output will account for 60%, 70% or even 80% of China's total cotton output. Therefore, our government will introduce measures to encourage farmers to grow cotton, otherwise cotton will follow the footsteps of soybean, rubber and iron ore.