Direct Subsidy New Deal Triggering Cotton Price Fall

In September 22nd, the national development and Reform Commission held a news conference on "cotton target price reform pilot and market regulation" to confirm this point. Liu Xiaonan, deputy director of the economic and Trade Department of the NDRC, said that if the domestic cotton prices fell too much, farmers would be "difficult to sell cotton". The state would also take necessary measures to support and guide large-scale cotton purchasing and processing enterprises to actively enter the market for acquisitions and stabilize market expectations.

The new cotton market is the first to respond to the new plan. Since September 15th, there are more and more rumors coming out of the plan. The 1501 contract of Zheng cotton futures has rebounded to 13900 yuan / ton line first, and 17 days after the implementation of the plan, it quickly went down, broke through the previous low point support, and slumped for two consecutive days. Finally, with the closing price of 13110 yuan / ton, the market had no resistance and no support. Insiders said that the sharp decline of Zheng cotton's decline was not seen for many years.

The spot trading market of cotton is being carried out by the futures slump. The decline is inevitable. In the week of September 15th ~21, the position of the new cotton spot price was reduced to 14000 yuan in October, except for the October contract, which fell to 14600 yuan / ton in October.

Han Zhiqiang, a researcher at the cotton market in Henan cotton group, said recently that the plan has just been released, and that the fluctuation of prices is normal in both the futures and spot markets. And the sharp decline in futures prices does not exclude the factors of capital speculation. In September 22nd, the NDRC would have a rebound in futures prices, and the latter should be based on stability.

At present, the new cotton picking in Xinjiang is being carried out in a hot fashion. Large area mechanical picking will have to wait until the early October. Before the introduction of the plan, cotton enterprises began to buy sporadic acquisitions, but they were all cautious and cautious, waiting for the explicit rules of the direct subsidy. A cotton trader in Henan said: "cotton prices will return to market this year. Last year, the price of 8 yuan or 9 yuan per kilogram was definitely gone. Purchasing price It will definitely decrease, but it's not sure how low it is. "

But after the introduction of the plan, Cotton enterprises The purchase price of new cotton is still somewhat "uncertain". Insiders said that the acquisition of new cotton market will take some time to digest the direct subsidy new deal, and the market parties will also weigh in depth and look around. Stalemate and temptation will also be inevitable. At present, the purchase price in Xinjiang is quite different, mainly in the price range of 6~7 yuan / kg.

　　 Development and Reform Commission Zhou Wangjun, deputy director of the price department, said at a press conference that the price of leather cotton in the US futures market last week was 11800 yuan / ton. At present, the price of Xinjiang seed cotton is 6.6 yuan / kg, and it has been converted into lint about 14000 yuan / ton. There is still a certain price difference between domestic and international lint prices. He said that the price of cotton in the international market should not be substantially reduced, and domestic cotton prices would be stable at the present level.

Liu Xiaonan also said that after the implementation of the target price reform, the cotton price will be formed by the market, and the linkage between the domestic and international cotton market will be strengthened, and the difference between inside and outside cotton will be further reduced. He believes that although the domestic cotton market will decline compared with last year, it is expected to remain stable in a reasonable price range.