The Trend Of Cotton Market In 2013: Policy Change Is The Focus

For this year's Cotton market Policy change is the focus of attention. But in the final analysis, price is the game between demand and output, and supply and demand is the basic factor determining the future cotton price.

Oversupply of domestic and international cotton market in 2012/2013 is predicted. cotton The reduction of planting efficiency will result in the continuous reduction of the global cotton planting area in 2013/2014 and support the cotton price in the new year. On the other hand, the export of cotton textiles has been blocked, the amount of cotton used has been greatly reduced, and the supply of spot inventory of cotton has been adequate. The ratio of domestic and international cotton inventory consumption is at a high level of nearly five years. Two factors will limit cotton prices up and down.

　　 Cotton planting area is reduced this year.

Although 2012 cotton collection and storage Price Increased cotton farmers' sales were positive, but planting intentions survey showed that the cotton planting intention area still showed a decreasing trend this year. The national cotton market monitoring system launched a nationwide survey of cotton planting area in late November 2012. The results showed that the average cotton planting area in China was 67 million 515 thousand mu, a decrease of 4 million 272 thousand mu compared with the same period last year, with a decrease of 6%. Shandong, Anhui, Jiangsu and other places showed that the cotton planting area in 2013 will still decrease significantly, with a reduction of around 10%. The international cotton advisory board (ICAC) predicts that China's cotton planting area will be reduced by 11% in 2013/2014.

The cotton farmers' income has been reduced due to the disaster. The problem of time wasting and labor shortage in cotton cultivation is difficult to solve. More young people choose to go out to work, and the income of cotton is lower than that of grain and other crops, and other factors will continue to affect the enthusiasm of cotton farmers.

The implementation of the temporary purchase and storage policy for two consecutive years has effectively protected the interests of cotton farmers. However, the heavy rain in August of 2012 brought disaster to Shandong, Hebei, Tianjin and other places. Local cotton production and quality were reduced. Although the purchase price was higher than that of last year, the cotton farmers affected by the disaster were still unable to get enough benefits, and the planting intention decreased. In recent years, cotton fields in the the Yellow River River Basin have experienced extreme weather such as heavy rain or continuous rain during the cotton growing season, and cotton yield and quality have declined. Cotton prices fluctuate, income is unstable, and production cuts have hurt farmers' enthusiasm for cotton planting.

The survey shows that in some cotton areas, the yield of other crops is significantly higher than that of cotton, causing farmers to turn to other crops. With the development of urban and rural integration, more and more young people choose to go out to work. Plus cotton growth cycle is long, late management hard, time-consuming labor, and other crops mechanization degree is relatively high, attractive to farmers, cotton planting area reduced accordingly.

　 Global cotton supply is still surplus.

According to the global cotton supply and demand forecast report released in November 2012 by the US Department of agriculture (USDA), the world's initial cotton stocks were 15 million 60 thousand tons, 25 million 450 thousand tons, 23 million 180 thousand tons, and 17 million 340 thousand tons at the end of the year. The global 2012/2013 inventory consumption ratio is 74.79%. Among them, the United States produced 3 million 760 thousand tons of cotton this year, 740 thousand tons of consumption and 1 million 180 thousand tons of inventory at the end of the year. The US 2012/2013 inventory consumption ratio is 35.54%. India's cotton output, consumption and stock in the current year are 5 million 550 thousand tons, 4 million 790 thousand tons and 1 million 900 thousand tons respectively. In 2012/2013, the global supply of cotton remained excessive. The latest global cotton supply and demand forecast report released by the US Department of agriculture (USDA) further raised global cotton production on the basis of this.

According to the report on the actual planting area of 2012/2013 in the US cotton released by the US Department of agriculture (USDA), the actual planting area of the United States cotton in 2012 was about 12 million 635 thousand acres, a decrease of 14% over the same period last year. The cotton planting benefit is low, and the annual decrease of US cotton acreage is supporting the cotton price. {page_ Break}

Cotton prices continue to decline in the 2012/2013 year, while other crops such as corn, soybeans and wheat prices continue to rise, affecting cotton attractiveness to farmers. The international cotton advisory board (ICAC) predicts that the new sown area in 2013/2014 will be reduced by 9% to 31 million 500 thousand hectares compared to the same period last year, and the output will be reduced by 11% from last year to 23 million 200 thousand tons. This is the second consecutive year of decline in production, the lowest in nearly four years.

In 2013/2014, the largest reduction in cotton planting area was in the United States and Turkey, respectively, by 26% and 30% respectively. China reduced 11%, Pakistan decreased by 9%, Central Asia decreased 13%, and West Africa reduced 10%. With the increase of cotton yield per unit area in India, although the area decreased, the total output declined only slightly, while Australia's total output decreased by 14%. In the next few months, cotton planting intentions in different countries may change.

Downstream demand is still not optimistic.

In 2012, the import and export market of cotton textiles in China was characterized by weak exports and strong import demand. Customs data show that in the first three quarters of 2012, China's cotton textile exports amounted to US $18 billion 640 million, down 6% from the same period last year, of which cotton exports accounted for about 50%, and exports amounted to US $9 billion 150 million, down 6.1% from the same period last year. Imports of cotton textiles amounted to US $5 billion 340 million, an increase of 24.9% over the same period last year, maintaining a relatively fast growth rate, of which cotton yarn imports amounted to US $3 billion 570 million, an increase of 46% over the same period last year, accounting for 67% of total imports.

Judging from the price trend of cotton textiles in the first three quarters of 2012, the prices of cotton and cotton fabrics were negative after the overall downward impact of domestic and foreign raw materials prices. Especially in the case of poor export trade environment, compared with the previous year, the export volume of cotton textiles in China decreased significantly. In terms of imports, China's imports of cotton yarn and cotton fabrics have increased to varying degrees compared with the same period last year under the strong support of imports.

The big difference between domestic and foreign cotton prices is an important reason for China's increasing demand for imported cotton and cotton textiles and its export obstruction. In the first three quarters, the export volume of China's cotton bedding and clothing also decreased to 8.8% and 5% respectively. Export profits are still not yet apparent. International market demand is still unclear. In the coming period, the export resistance of China's cotton textiles and downstream cotton products is still relatively large.

Due to the increase in labor costs and other factors, China's textile production costs are higher than those of India and Pakistan. Even if the European and American economies recovered in 2013, China's textile export orders could not increase significantly.

At the same time, domestic consumption growth is weak. In 2012, the 1~11 quota increased by 18.2% in the retail sales of enterprises (units), clothing, shoes and hats and knitwear. The growth rate dropped by 6.9 percentage points. The amount of cotton used in textile enterprises has been greatly reduced. According to the survey, the relevant institutions estimate that the monthly high level of textile cotton consumption per month is maintained at 500 thousand ~60 tons, far below the 1 million tons of textile production expansion period, and about 800 thousand tons of textile cotton in previous years. Another situation is that the raw materials and finished products of enterprises are in a low inventory state, and there is no need for active replenishment.

Although the company's macroeconomic and market confidence has been restored in 2013, the order situation is hard to say. The downturn in cotton demand will inhibit the rise in cotton prices.