Textile Enterprises Look Forward To Cotton Yarn Futures Under The New Policy

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Xiaobian of the network introduced to everyone that cotton futures are energized under the new policy, and enterprises look forward to cotton yarn futures.

Since the start of this year

After the cotton pilot reform and the abolition of the three year cotton purchase and storage policy, the cotton futures of the Zhengzhou Mercantile Exchange (hereinafter referred to as "Zheng Shang") finally regain its vitality after several years of quiet trading volume. In September this year, cotton futures volume grew by 148%, an increase of 4287% over the same period last year.

Cotton futures under the new policy

In the past three years, the cotton market has been carrying out a temporary purchasing and storage policy. Although it has objectively benefited the farmers and the market price is stable, the price gap between the inside and outside of the cotton market has been too high. Meanwhile, because of the lack of price marketization mechanism, the cotton futures market has lost its vitality.

Wang Xiaobing, deputy director of the Ministry of agriculture and market and economic information department, pointed out at the Zhengzhou cotton futures Forum (hereinafter referred to as the "forum") that in recent years, the contradictions and problems accumulated in the temporary storage and purchase policy of cotton have become increasingly prominent. Relying on policies to stabilize production and market is becoming more and more difficult. Opening up the pilot price of cotton price is an innovative measure to improve the price policy of agricultural products (12.23, 0.23, 1.92%) under the new situation, which is of great significance for protecting farmers' interests, enhancing market vitality and promoting industrial development.

"The implementation of the national cotton price reform pilot program can effectively protect the interests of producers for the majority of cotton growers. The market environment for processing and circulation enterprises will undergo significant changes, and risks and uncertainties will increase. Cotton futures value preservation will become more and more important. New policies for cotton textile enterprises will help reduce production costs and help restore the competitiveness of China's cotton textile industry in the international market."

Zhang Fan, director general of Zheng Shang, said at the forum.

Wang Jianhong, Deputy Secretary General of the China Cotton Association, analyzed the domestic cotton market under the new policy. He believed that domestic cotton prices would gradually return to the market under the target price. At present, the trend of cotton prices falling is very obvious, because there is no price support like the temporary purchase and storage in the past.

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

Cotton futures have also undergone twists and turns in the past ten years, and I feel most delighted about the implementation of target prices.

Wang Jianhong said.

Better service for cotton related enterprises

According to China economic net reporter, the pilot of target price reform is making many positive changes in cotton futures market. The activity of cotton futures has improved significantly since the second half of the year.

China economic net reporter inquired data that, from 1 to September this year, the number of enterprises involved in cotton business increased by 45% over the same period last year, and the demand for safe haven increased significantly. The number of customers involved in cotton trading increased by 78% over the same period last year. The number of natural customers involved in cotton trading increased by 27%, and the average daily customers of legal persons grew by nearly 100 thousand, an increase of 84% over the same period last year, which was much higher than that of natural customers. Cotton futures prices leveled off, and the cotton warehouse in China and the United States decreased significantly from a maximum of 6000 yuan per ton to about 2000 yuan.

It can be seen that cotton futures price discovery function has been gradually restored, which has greatly helped cotton enterprises to avoid risks and achieve stable operation.

Yang Li, general manager of the Chao Ge Textile Group, said at the Forum: "for our textile mills, cotton accounts for 70% of the total production cost, and its price fluctuation is so intense that there is a huge risk. We really should actively participate in futures and use futures hedging and price discovery functions to circumvent their risks."

Yang Li, for example, said: "09 years with Adidas received more than 10 thousand orders, but lower than the market price, so at that time 14000 cotton price is not profitable, but then the futures contract is 13000 of the price, I decided to take orders and hedge at the same time, with the purchase of spot with the warehouse, to the futures contract delivery price has risen to 15000 yuan / ton, so that our production costs are low, and the profits of enterprises are guaranteed."

We need to prevent speculation in big market.

China economic net reporter has made a simple survey of investors in futures market. Nearly 20% of investors in the most impressive market in recent ten years indicated that the 2010 cotton futures bull market could be described as 100 years old or even unprecedented.

I have to mention that it is the cotton futures bull market that has made a number of market myths. "Cotton futures Predator" Lin Guang Mao is one of the representatives.

Although the cotton futures boom was determined by fundamental factors, the speculative forces overheated them at that time.

Wang Jianhong, Deputy Secretary General of the China Cotton Association, stressed at the forum that "cotton futures should prevent speculation at the same time of big market."

Zhengzhou cotton and ICE cotton trade in September increased from 0.08 to 0.09 in the past two years. From the previous irrelevance to the present degree of correlation is very large, we are not only affected by US cotton futures, but also China's cotton futures are also affecting New York futures. We hope cotton futures will better serve the real economy under the new policy and become a tool for enterprises to guard against price risks.

In the next work of Zheng Shang, Zhang Fan, chairman of Zheng Shang, also focused on strengthening the front-line regulation of the cotton futures market, increasing the investigation and handling of illegal and abnormal pactions, and ensuring the normal functioning of the cotton futures market.

Cotton yarn futures should be listed as soon as possible

Reviewing cotton futures market over the past ten years, besides the implementation of the policy of purchasing and storage, the overall fluctuation is relatively fierce. With the implementation of the target price subsidy policy, the market price of the cotton market has returned to the market, and the risk brought by market fluctuation is also increasing.

However, hedging with cotton futures is difficult to avoid the risk of enterprises completely.

Yang Li, general manager of the Chao Ge Textile Group, gave an example to the China economic net reporter. "In 2011 cotton prices dropped and cotton yarn fell down. The order signed by the textile mills finished the cotton yarn and it was possible for the downstream to break the contract.

If you have the futures of cotton yarn, you can buy it on cotton futures.

Cotton yarn is sold on cotton yarn futures, and two varieties are operated in two directions, so that there is no risk of default on cotton yarn sold on cotton futures, as long as I meet the requirements of quality, I can deliver.

Yang Liwei thinks that it is imperative for cotton futures to go on the market. On the one hand, it stimulates the activity of cotton yarn, and on the other hand, it covers a wider textile industry chain, which plays a key role in the healthy development of the entire textile industry.

It is also the most advantageous to put this variety in Zhengshang office. First, Zhengzhou is located in the middle of several textile provinces, such as Hebei, Anhui and Shandong, with unique geographical advantages and advantages.

On the other hand, put cotton and cotton on an exchange, so it's very convenient for delivery. "

Zhang Fan, director general of Zheng Shang, said that Zheng will make every effort to promote the research and development of cotton yarn futures, strive for the listing pactions within the year, and improve the cotton industry chain variety system to meet the needs of cotton related enterprises.