Cotton Market Sentiment "Nervous" Market Began To Tense.

Below P, cotton topping is now in full swing, less than a month away from the new cotton year.

Time is no longer waiting. When the new cotton is about to go on sale in September, when will the direct subsidy rule be announced? Is it subsidized or subsidized by area? If cotton prices continue to fall, the price gap between the direct subsidy target and the 19800 yuan / ton price is too large, will there be a cap on financial subsidies? If the domestic cotton price is lower than the outer cotton, do we need to provide a bottom line, who will provide the bottom and how to provide the bottom? These problems are haunting people's hearts.

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< p > the industry appealed for the straighten out rules as soon as possible, so as to give the market a stable expectation, and let the participants of cotton related industrial chain have time to plan the next cotton business strategy.

According to the China Securities Journal reporter, at present, the Interim Measures for the use and management of subsidy funds for cotton target price reform in the Xinjiang Uygur Autonomous Region have been submitted for trial. The target price subsidies are expected to be subsidized according to the actual planting area of cotton and the quantity of seed cotton sold. In late July, the 8 ministries and commissions of the state will publish the detailed rules for the subsidy after examination and approval, and will be implemented in September.

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< p > recently, the "a href=" http://www.91se91.com/news/index_c.asp "Zheng cotton < /a" crash caused market concern.

In from July 1st to 11th, Zheng cotton 1501 contract continued to increase the warehouse volume, fell from 15370 yuan / ton below 15000 yuan / ton integer pass, continued to explore to 14230 yuan / ton, the cumulative decline of up to 7.66%, 9 trading days only two days of red, which has been relatively rare in the past two years.

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< p > < cotton > a href= > http://www.91se91.com/news/index_c.asp > price > /a > big drop. There are two main reasons: first, the impact of the US cotton yield increase, the rapid downlink, the loss of support for the inner cotton; the two is the new cotton year, the state will purchase and store the direct subsidy, and the cotton noodles will be priced in the market environment.

Huang Shanghai, Changjiang futures, said that due to the reduction of cotton consumption in China and huge inventory of state reserves, the imbalance between supply and demand led to a marked downward trend in market prices. Logically, the current downward trend is more reasonable.

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< p > public data show that as the largest cotton supplier in the world, the US cotton may increase its planting area, increase its output and increase its final inventory. The pessimism of the market has made the Intercontinental Exchange (ICE) cotton price fall by 15% in the past month, which is regarded as the fuse of the recent domestic cotton price drop in December.

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At the same time, since the beginning of this year, the pace of reform of China's price system has accelerated. The original cotton purchasing and storage system has been replaced by the direct subsidy policy, and the direct support from policy to the market is no longer, and the market leading force has returned. The huge inventory of state cotton reserves has a tremendous pressure on the spot price of cotton.

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< p > "three years less than a href=" http://www.91se91.com/news/index_c.asp "> cotton < /a > the total amount of storage and storage is more than 16 million tons. At present, the reserve cotton in the Treasury is still about 12 million tons, and our country will produce about 6 million tons of cotton annually.

It takes nearly 10 million years to digest cotton at most per year, and it takes nearly three years for the national treasury to basically digest the cotton.

Xia Ting, a business analyst.

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< p > demand from the point of view, at present, the traditional textile industry has entered the consumption off-season, and the relevant rules of cotton direct subsidy have not yet been promulgated. The textile production enterprises have taken a cautious attitude towards orders. When purchasing raw materials, they are all used with the purchase, cotton yarn sales are not smooth, and inventory backlog is serious.

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< p > the sluggish spot market is fully reflected in the rapid fall in prices.

In 2011 -2013, the state implemented the cotton purchase and storage policy. The price of cotton purchase and storage increased from 19800 yuan / ton to 20400 yuan / ton, but the international cotton price went down all the way. In 2013, the difference between home and abroad reached 4420 yuan / ton.

By the middle of July, the price of Xinjiang cotton of grade 4128 and grade 3128 was 15700-16600 yuan / ton and 16500-17200 yuan / ton respectively.

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< p > "to return to the market, we must respect the law of the market price."

Hou Dipeng, chairman of Qingdao Zhong Xu International Logistics Co., Ltd., told reporters that the storage system is supporting the domestic and foreign prices, and now the domestic cancellation of the direct subsidy is the embodiment of the return of the price to the normal level.

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< p > with the gradual dilution of policy factors, domestic cotton prices continue to fall, and the price difference between domestic and foreign cotton prices dropped to around 1600 yuan / ton. Insiders pointed out that this just reflects the beginning of domestic cotton prices docking with the international market.

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< p > and the influence of direct subsidy policy, the industry believes that the goal of direct subsidy policy is to reduce administrative intervention, so that prices can better reflect the market supply and demand relationship. Therefore, before and after the promulgation of policies, the market sentiment may be affected, but the main factor that affects cotton prices is supply and demand relationship.

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< p > in Nanhua futures analyst Fu Xiaoyan, the global oversupply of cotton is still to be digested. The implementation of China's policy of purchasing and storing direct subsidy will gradually solve the problem of China's cotton market. China's demand is expected to decline in recent years, and the international cotton price has lost the core of "demand power" and is expected to maintain a weak state.

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