Policy Affects Cotton Price Operation In 2014

On the whole, the tension of contract warehouse has weakened in recent months, and far month contracts have been supported by the mainland's bidding and storage policy rumors, and the market is expected to reverse, showing a "near weak and far strong" situation.

　　 Policy system Interlocking

The policy of storage and storage, the policy of storing and storing and the policy of issuing quotas are the main policies of the cotton market in China. Analyzing the policy changes in the year 2014 is the key to clarify the trend of the market.

We believe that these three policies are closely related and must be put together for analysis: the policy of purchasing and storing will affect the stock of state reserves, thereby affecting the policy of dumping and reserve and quota issuance. These three policies are also integrated with the reform of China's agricultural industrial policies.

Under the current market conditions, we can clarify three basic prerequisites: first, a large number of purchasing and storage distorts the pricing mechanism of the market; the cotton price has returned to the planned system, and the policy of unlimited storage and withdrawal is reasonable. The direct subsidy policy is consistent with the political and economic logic, but the income of the farmers has always been placed on the heart of the government. Second, the textile industry is related to a large number of employment, and some areas with insufficient financial resources are more dependent on the textile industry. Therefore, it will still be concerned by the government. Third, after three years of continuous implementation of the unlimited purchasing and storage policy, the State Reserve has 10 million tons of cotton per day, which must be sold to the market.

The possible ways and results of the latter policy are as follows: first, abolish the policy of purchasing and storage, adopt direct subsidy policy, maintain the planting area in Xinjiang, and reduce the degree of protection to the mainland. This is basically a fact. Second, increase the intensity of dumping and storage, reduce the stock of national stock; third, to reduce the stock of national reserves, we must control the import scale and quota management more strictly; fourthly, the price of dumping and storage has declined to a certain extent, so that the textile industry can accept and the government's financial losses will not be too large.

Judging from the development of domestic textile industry and cotton planting industry, cotton production is maintained at 6 million 500 thousand tons, and consumption is maintained at 7 million 800 thousand tons, which is a relatively suitable scale. The control of import volume at 1 million 500 thousand tons will also be a relatively long term equilibrium volume. This may become the starting point for the government to formulate the details of the direct subsidy policy.

In the year of 2013, no longer tying quotas will help to digest large quantities of state reserve stocks. At the same time, the quota issuance may be controlled more strictly, and the quasi tax quota will be even more scarce. If the price of dumping and storage is calculated at 18000 yuan / ton, the cost of the combined quota will not be very different from that of the 19000 yuan / ton in 2012.

　　 Purchase and storage Direct subsidy Test water

In 2013, the state continued the policy of open purchase and storage, and fixed up 20400 yuan per ton for new cotton. Since mid November 2013, as the actual volume of transactions continues to rise, the policy of purchasing and storage continues to play an effective role in boosting cotton market.

As of the end of February 2014, 2013 cotton temporary storage and storage totaled nearly 6 million tons. Among them, the total turnover of Xinjiang was 4 million tons, and the total turnover in the mainland was 2 million tons. The purchase and storage policy has obvious support for the spot market. At present, China's cotton price index 3128B in the vicinity of 19450 yuan / ton, is located between the selling price and the reserve price, and the market mentality is relatively stable.

For the 2014 cotton policy, the official direct subsidy policy is about to be implemented. Recently, the rumor was subsidized 380 yuan / mu, according to the current Xinjiang cotton yield per mu, the general discount is 3000 - 4000 yuan / ton. As the subsidy level is directly related to the cost of lint, it involves the interests of all sides of the cotton market, and the positioning of the annual cotton price operation interval is not less than the policy of collecting and throwing the reserve. Therefore, the amount of subsidy has become the focus of attention in cotton market in 2013.

On February 18th, at the annual meeting of the China cotton reserve management company held in Beijing, deputy director Liu Xiaonan of the State Economic and Trade Commission of the State Development and Reform Commission made clear that the core of exploring the target price system for cotton is to protect the interests of cotton farmers. In the new market environment, the decisive role of the market mechanism in the allocation of resources will be brought into play, the efficiency of the central financial subsidy will be improved, the relationship between the two markets at home and abroad be straightened out, and the development of the industrial chain can be promoted. And put forward that we should keep reasonable reserves and continue to play the role of reserve control when farmers appear to sell cotton, so as to ensure cotton farmers' income and market stability. Judging from the content of its speech, we believe that the policy of unlimited collection and storage in the past few years may have come to an end. The policy of quantitative purchase and storage implemented in the white sugar market may appear in the cotton market in the future, so as to protect the stock of state reserves and ensure the income of cotton farmers.

　　 quota Tight will continue

Since the implementation of China's unlimited purchasing and storage policy, imports have increased significantly. However, we roughly found that the quota of tariffs, slips and so on issued in 2012 amounted to 2 million 100 thousand tons, which was significantly reduced by 1 million 800 thousand tons compared with 3 million 900 thousand tons in 2011. And the quota allocation mode in 2012 is different from previous years. It was changed from 500 thousand to 1 million tons at the beginning and middle of the year. It changed to the auction sale mode of throwing cotton and cotton with enterprises, which alleviated the impact of cotton concentrate on the domestic cotton market. We believe that the policy direction of the country is to gradually stock up. If large quantities of imported cotton are allowed to enter the country, then the stock will not be able to digest. It is estimated that the tight cotton trade quota policy in 2013 and 2014 will continue.