China'S National Treasury Has Sufficient Cotton Resources, Which Will Continue To Be Collected And Stored This Year

The 2013/2014 cotton harvest and storage officially started on September 12, but the current inflow is significantly lower than the same period last year. The main reasons lie in several aspects: First, the new cotton came into the market later this year than last year; Second, the implementation of the new national standard this year, cotton processing enterprises operate cautiously, and the progress of public inspection is relatively slow; Third, the new collection and storage rules are more detailed and stricter than those in previous years.

By comparing the 2013 plan and 2012 plan, we can see that:

First, the 2013 plan was released significantly later than last year. First, because of the implementation of the new national standard this year, the requirements for cotton notarization and inspection will be changed and improved in the collection and storage plan; Second, because of the unlimited collection and storage of cotton in the previous two years, China's national treasury has sufficient cotton resources. This year, the country will continue to collect and store cotton, and the country will no longer simply regulate the quantity.

Second, in terms of storage quality requirements, the old standard is no longer used, but is revised to the new national standard.

Third, in terms of purchase and storage prices, the old standards such as grade difference and length difference have not been followed due to the implementation of the new national standard. Compared with the grade and length premium in 2012 and 2013, the premium intensity in 2012 is higher than that in 2013. Therefore, from the perspective of payment for goods delivered and stored, the income of Xinjiang cotton with higher grade is obviously weaker than that of last year.

By comparing the temporary cotton collection and storage trading methods in 2012 and 2013, we can find that:

First, the 2013 cotton collection and storage rules have more detailed and strict requirements for delivery and storage enterprises. For example, once the lease or entrusted processing relationship has been reviewed and announced, it cannot be changed, and there was no such requirement in 2012. In addition, this year also made the following provisions on the transaction volume and progress of the delivery and storage enterprises: the cumulative transaction volume of the delivery and storage enterprises as of a certain trading day shall not exceed the total amount of notarized inspection (the certificate of origin inspection) of the 400 type cotton processing enterprise announced by the China Fiber Inspection Bureau on the previous day. This detailed rule highlights the binding force and control of the purchase and storage policy on the delivery and storage behavior of processing enterprises. In this way, it can effectively prevent enterprises from trading online the estimated production quantity near the warehouse in advance; Second, the loopholes in the delivery and storage can be prevented by preventing the rotary cotton and the lint processed on behalf of others from passing off as the delivery and storage cotton.

Second, there have been some changes in the delivery and deposit of funds. The deposit paid to the enterprise has increased from 300 yuan/ton in previous years to 500 yuan/ton. At the same time, the advance payment is canceled and one-time payment is adopted, that is, the enterprise can get the full payment for goods only after the cotton is delivered, stored, warehoused and invoiced. In previous years, 80% of the lint can be obtained after warehousing and preliminary inspection, and the other 20% will be settled when invoiced. For enterprises with insufficient funds, this will extend the time for funds to be available, virtually increasing the difficulty, and seed cotton acquisition will also become more cautious.

Third, the standard of premium and discount of cotton for delivery and storage has been completely overturned. If the maximum cotton fiber length is 31, according to the 2012 standard, the best cotton is 131A, with a premium of 2810 yuan/ton; The worst cotton is 427C2, with a discount of 1116 yuan/ton. According to the 2013 standard, the best cotton is 1131AS1P1U1N, with a premium of 1600 yuan/ton; The worst cotton is 2227C2S4P2U4L, with a discount of 1200 yuan/ton. From the perspective of premium and discount, the premium of cotton declined significantly, while the discount increased slightly. For the transportation and storage enterprises, the profit space is compressed.

It can be seen from the above comparison that the delivery and storage requirements this year are significantly stricter than last year. If the current delivery and storage progress is calculated based on the daily average turnover of 30000 tons, it is estimated that the purchase volume this year will be about 3.72 million tons. Combined with our survey data, in 2013, the national cotton production reduction rate was about 7%, the total output was estimated to be 6.88 million tons, and 3.16 million tons of cotton did not enter the national reserve. The author believes that enterprises should pay attention to the selling and insurance operation of futures. If the futures price exceeds 20600 yuan/ton in the later period, they can consider selling and insurance delivery sales.