Cotton Prices Fell 10% Good Downstream Businesses

< p > in recent years, the difference between domestic and foreign cotton prices has been widening. China's "a target=" _blank "href=" http://www.91se91.com/ "textile" /a "has a high cost of raw materials, and spinning enterprises are very difficult to manage.

Since the beginning of this year, the state has abolished the temporary cotton purchase and storage policy and implemented the target price reform. This will reduce domestic cotton prices, narrow the price difference between domestic and foreign cotton, and ease the pressure of textile enterprises.

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< p > from this year, the 3 year national cotton temporary purchase and storage policy was abolished, and the target price system reform of agricultural products began.

The industry believes that the introduction of the new policy will affect the price trend of domestic cotton, and it is estimated that cotton prices will fall by 15%.

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< p > < strong > < a > href= > http://www.91se91.com/news/index_c.asp > cotton > /a > the price decrease is 10% < /strong > /p >.

< p > according to media reports, the national development and Reform Commission has decided to cancel the national cotton temporary purchase and storage policy in 3 consecutive years from March 31st of this year, and launch a pilot project of cotton target subsidy in Xinjiang.

According to the insiders, after the introduction of the new policy, domestic cotton prices are expected to fall by 10%, and cotton prices will be good for the downstream cotton spinning enterprises.

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According to the website of the national development and Reform Commission, approved by the State Council, the national development and Reform Commission, the Ministry of Finance and the Ministry of agriculture jointly issued the target price of cotton in 2014, which is 19800 yuan per ton, according to the website of the national development and Reform Commission. P

The target price policy is an agricultural support policy based on the market price of agricultural products and protecting the interests of producers through differential subsidy.

The cotton target price in 2014 can compensate the cost of cotton production in the pilot area and ensure the basic income of farmers.

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< p > reporter learned that in 2010~2011, China's cotton market fluctuated sharply. In order to protect cotton farmers, the state implemented cotton temporary purchase and storage policy for three consecutive years, and carried out the de market acquisition of cotton, thus ensuring domestic cotton prices.

But side effects also follow.

Taking 2013 as an example, the domestic cotton takeoff price is 20400 yuan per ton, while the international price is only 15000 yuan, and the interests of cotton farmers have been protected. Cotton textile enterprises have been struggling because of the high cost.

Data show that in 2013 the domestic cotton textile industry in the context of continued downturn in international and domestic environment, the operating rate of enterprises fell, inventories continued to rise, the average operating rate of cotton spinning enterprises above designated size was about 72%, the average stock of cotton yarn products was 20~30 days, and cotton products were difficult to get rid of losses.

"Temporary purchasing and storage policy guarantees domestic cotton prices. After the state stores and stores cotton, the storage pressure is high; the high price recovery is sold at a low price; the national financial burden is heavy; the cotton textile enterprises are difficult to survive because of the high cost," said Zhao Hongliang, director of the cotton technology station of the Shandong Provincial Department of agriculture. "There will be two situations in the adjustment of the cotton policy of the state. First, the cotton planting area in Xinjiang will continue to expand, and the two is that the planting area in the mainland will fall sharply."

Zhao Hongliang thinks.

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Chen Xiwen, deputy leader of the central rural work group, Chen Xiwen, said that the price formation mechanism of agricultural products should be reformed and Xinjiang's cotton price will be the first to test the water.

The direction of the reform is to shift from the simple minimum price and the temporary purchase and storage of agricultural products to the gradual implementation of target prices.

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< p > Zhuo Chuang Information Analyst Sun Liwu believes that after the lack of direct purchase and storage policy support in China's cotton market, the price of cotton will obviously oscillate, and the average price decline will be at 5%~10%.

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< p > < strong > national direct intervention < a href= > http://www.91se91.com/news/index_s.asp > market > /a > means gradually fade < /strong > /p >

< p > because the national cotton temporary purchase and storage policy has been abolished and the target price reform has been carried out this year, the policy environment of the domestic cotton market will undergo very great changes.

Many industry insiders said that the relevant government departments should take into account the convergence of temporary purchasing and storage policy and target price system.

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Zhou Shengtao, President of the China Cotton Association, said in an interview that "this year is the first year of the implementation of the target price reform. The market environment is quite different from the period of storage and purchase, and the risks and uncertainties increase." P

Because of the high inventory of domestic cotton, even though the cotton planting area has dropped by 12.6% over the same period this year, the cotton market is still in a state of oversupply.

After the implementation of the target price system, the policy environment of the domestic cotton market will undergo great changes.

Regulation and control must start from two aspects: short-term and long-term.

Zhang Jinguang, director of the economic and trade division of the national development and Reform Commission, said that in the process of convergence of new and old policies, the role of market players could not be changed in time, resulting in the difficulty of selling cotton in local cotton purchase.

In addition, Zhang Jinguang also said that no matter whether the direct pricing of the state or the way of purchasing and storing the market will bring some problems to the market.

He believes that the means of direct intervention in the market will gradually fade or even withdraw, and the future will depend more on the role of market players.

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