The Cotton Price Difference Between Inside And Outside Is Too Large, And The Enthusiasm Of Cotton Farmers In The Mainland Is Frustrated.

Here world

Xiaobian of the network introduces the price difference between inside and outside cotton is too large, and the enthusiasm of cotton farmers in the mainland is frustrated.

In October 18, 2014, the Zhengzhou mercantile exchange held the "2014 Zhengzhou agricultural products (cotton) futures forum" in Zhengzhou.

The forum aims to explore ways and means of innovating agricultural products futures to serve the real economy, giving full play to futures market functions and promoting sustained and healthy development of agricultural industry.

Ho sum futures was invited to cover the meeting.

Wang Jianhong, Deputy Secretary General of the China Cotton Association, said at the meeting that the difference between cotton prices at home and abroad was large in recent years. The competitiveness of China's cotton products was weak, and the import of cotton yarn and cotton cloth increased significantly, and the enthusiasm of cotton farmers in the mainland was greatly frustrated.

The following is a record of the speech:

Wang Jianhong: Good morning, ladies and gentlemen. Thank you very much for inviting me to participate in this special cotton futures forum. A topic for me today is cotton situation and prospect at home and abroad. This topic is divided into two parts. One is I will introduce the cotton market both inside and outside the country. As for the general manager, especially the Futures Company boss, it is your specialty.

First of all, review the cotton market in 2013, the overall situation of 2013 is decreasing, and imports are decreasing.

From the "China cotton supply and demand balance sheet" formulated by our China Cotton Association, we can see that the absorption stock is 10 million 545 thousand tons, the output is 9 million tons, the import is 3 million tons, the consumption is 7 million 731 thousand tons, and the futures stock is 12 million 814 thousand tons.

As the international market continues to slump, the appreciation of the renminbi and the rise of labor force and other factors.

A total of 6 million 130 thousand tons were collected from the temporary storage and storage in 2013, and the stock volume in the 3 year reserve year exceeded 16 million tons, accounting for 80% of the total output of the country.

When it comes to temporary collection and storage, especially those of futures, you feel very deeply. When we mention the temporary purchase and storage, we feel that there are many drawbacks and feel nothing good. But objectively speaking, the policy of temporary purchase and storage has benefited farmers for 3 years, and the price of another market is stable. This is not what futures traders want to see.

Another drawback is that the price gap between inside and outside is too large, and the market loses its vitality.

But we can not say that the temporary purchase and storage is totally negated. We cannot deny the previous policy because we support a new policy.

Is it possible to solve all problems in the cotton industry by implementing the target price now? Not necessarily, especially now.

The implementation of the price is also very difficult.

Last week, a Sino US policy seminar was held jointly with the national cotton Federation of the United States. At this meeting, the National Cotton Association of the United States introduced the beginning of the US cotton insurance policy this year, and also raised its subsidy, which is actually facing a budget pressure.

Similarly, for our country, the target price is also facing the pressure of the national budget, and also faces the restriction of WTO. It also faces the cost of this year's price is very complicated and relatively high, including difficulty.

From the market price spot in 2013, the purchase and storage period was about 19000 yuan / ton, after the purchase and storage, the price fell, the annual average price was 18625 yuan / ton, from the futures, the cotton futures main contract fell to 14000 yuan / ton lowest.

From cotton production in 2014, the global output of USDA is expected to be 25 million 990 thousand tons, down by 0.2%.

ICAC production is 26 million 240 thousand tons, up 1%, COTLOOK is 25 million 240 thousand tons, an increase of 0.3.

The output of our cotton association of China is expected to drop. The area is about 63000000 down to 6.35. The difference is not the same policy. Xinjiang has increased by 7%, and the Huang Huai basin and the Yangtze River Basin have decreased by 26% and 23% respectively.

Judging from the progress of cotton picking in the whole country, the national harvest rate was 33.6% at the end of September, down 10.88% compared with the same period last year, and the sales progress was 3.9%, down 12.83% compared with the same period last year.

Cotton purchase and processing in 2014 declined 23.88% in the first half of this year.

Since the end of September, enterprises in the industry have taken the lead in acquiring mergers and acquisitions such as China cotton group and other leading enterprises in the coordination industry, breaking the stalemate and maintaining the price of white cotton in Xinjiang. Now the average price of the 3129 purchase of white cotton in Xinjiang is 5.96 yuan / kg, which is 0.11 yuan / kg higher than that in the week before the holiday.

By the end of November 10th, nearly 150 thousand tons of lint had been processed in Xinjiang, 66 thousand and 900 tons in the region and 82 thousand and 400 tons in the Corps.

Domestic cotton prices will gradually return to the market under the target price. There are many factors to consider from the current market.

This is the 2014 Zhengzhou futures contract settlement price and China's cotton price index CCindex3128b price chart.

Now, because of the first year of the implementation of the target price, some prominent problems are encountered now, because this is a new policy and is different from the previous temporary purchase and storage. Since it is a pilot project, we should allow some minor mistakes or be brave enough to be wrong.

The second is that the trend of price declines is very obvious, because there is no price support as before, and now it is a return to the market.

The third reason is that the mainland has relatively no target price policy, and the subsidy is much less than that of Xinjiang cotton. Therefore, the enthusiasm of cotton farmers in the mainland has been more frustrated.

Just now, the decline of the the Yellow River River Basin and the Yangtze River Valley is very large, and the downward trend will take place in a few years.

The international market is generally on a downward trend.

In 2014, the cotton policy was to suspend the release of cotton reserves. The relevant state departments clearly indicated that the cotton reserves should be stopped from September this year to March next year. Unless the supply of cotton is in short supply, the state reserve cotton will not be exported to suppress the market.

In addition, the national development and Reform Commission opened a press conference the other day. It was clear that in addition to issuing tariffs to meet the normal needs of textile enterprises, cotton would not be imported in principle.

In the future direction of China's cotton industry, we believe that the layout of China's cotton production should first be to develop Xinjiang's dominant producing areas, and appropriately encourage the mainland's saline, tidal flat and other suitable cotton areas.

From the mode of production, the scale and mechanization of cotton production can be improved because the target price can not solve the problem of scale and mechanization of cotton production.

Circulation mode should be encouraged to develop E - commerce and modern logistics, improve logistics efficiency and reduce logistics cost.

From the perspective of cotton demand, we must maintain the domestic self-sufficiency rate at around 2/3, and the gap between production and demand will be compensated through imports.

Recently, China Cotton Association has carried out several work on target prices. One is according to the requirements of the relevant departments of the State Council, and has conducted several research and supervision with the national development and Reform Commission, the Ministry of finance, the Ministry of agriculture and the Land Bureau in some parts of Xinjiang. In the end of September, it conducted the first research and supervision, and announced the target price policy to farmers, and put forward our own proposals for the existing problems.

Second the China Cotton Association has also undertaken the monitoring of target prices, monitoring the market price every day, which is a factor to calculate the market price of Cotton Subsidy.

The third aspect is to do well in information pmission and social propaganda and guidance.

The cotton association of China has been very concerned about cotton futures since its establishment. I recall that in April 2004, the China Cotton Association issued a report on whether cotton futures will be listed. In June, 04 years before the listing, the cotton association held a training course for cotton futures in Qingdao.

Because cotton futures have a very important role in cotton production in our country, and it is a tool to avoid risks for enterprises.

Ten years, cotton futures have gone through twists and turns, and the implementation of the target price, I feel most pleased, is cotton futures trading companies and enterprises, basically returning cotton to the market, so that everyone has another market.

On the other hand, cotton futures trading will focus on the real economy. We must prevent speculation when we are in big market.

Last week, at the meeting of the national development and Reform Commission, listening to the leaders of the SFC and other leaders, Zhengzhou cotton and ICE cotton trading in September increased to 0.09 from 0.08 in the past two years, from the previous irrelevant to the present degree of correlation is very large, and not that we are only affected by US cotton futures, but China's cotton futures are also affecting New York futures.

In this regard, we hope that cotton futures will better serve the real economy under the new policy and become better.

A tool to guard against price risk.