Cotton Stocks Skyrocketed To A Record High

According to media reports, the world's stock of cotton has expanded to enough to produce 23 billion jeans, with an average of three extra for each person.

Cotton prices hit a five year low on Thursday. The weakening demand for cotton stung the textile mills with large stocks in Dezhou.

Dezhou is the largest cotton growing area in the United States.

In a letter to government agencies last week, the manufacturer said that it is expected to permanently shut down factories in the Littlefield region and lay off 340 people in January next year, said RJO's senior market strategist at the Futures Company.

It is very sufficient that he believes that the demand is not enough to reverse cotton prices, and cotton prices will continue downward.

The price of cotton futures delivered by the Intercontinental Exchange in March dropped to 58.57 cents a pound on Thursday, the lowest since 2009.

The world's largest exporter of cotton, the US Department of agriculture in this week's report, predicts that cotton production will increase by 27% to 14 million 600 thousand packages in the same period, while exports will drop by 5%-1000 million packages. The USDA expects that, as China's procurement in the world's largest cotton consuming country slows, the US cotton exports will decline to the lowest level since 2001, in the 12 months of July 31st next year.

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"The output is not good, the purchase price is low, the cotton income this year is not high, and the tail flower can not be finished but only rotten in the ground."

A farmer picking cotton seeds in Jinhua village, Gongan County, Hubei, told reporters on the futures daily that last year, one mu of cotton planted locally could earn more than 3000 yuan, and it would be good to earn 2000 yuan this year.

During the recent visit to two provinces in Hubei and Hunan, reporters found that many of the cotton fields that should have entered the ending stage of harvesting were still white flowers, and many of them had not been picked yet.

Some farmers simply turn the cotton fields with plenty of tail flowers directly into wheat or rape.

It is also understood that the cotton mill is generally worried that the cotton prices will continue to fall in the late period, and the purchase intention is not strong, and the seed cotton purchase price is far lower than the cotton farmers' expectations, which will cause cotton farmers to sell. Many cotton farmers in Hubei and Hunan are backlog.

"Over 20 cotton ginning plants in the northern cotton growing areas in northern Hunan have stopped buying seed cotton, while the sale of Hubei seed cotton is better than that in Hunan Province, but there are still a lot of seed cotton in the cotton producers in the producing areas."

Pan Mingkun, a futures analyst at Hubei Baiyin cotton industry group, told reporters that the price of early purchase of seed cotton in some cotton ginning plants in Hunan province was high, making the cost of lint cotton generally reaching 14000 yuan / ton. The downstream textile enterprises did not recognize the price.

In early November, the departments concerned decided that the Cotton Subsidy in the mainland was in the 9 provinces of Shandong, Hubei, Hunan, Hebei, Jiangsu, Anhui, Henan, Jiangxi and Gansu. The subsidy standard for this year was 2000 yuan / ton, and the subsidy standard for the following year was based on 60% of the allowance for Xinjiang, and the upper limit should not exceed 2000 yuan / ton.

The subsidy method is decided by the provinces independently, and it can be subsidized by area or by output.

Although the subsidy policy has been introduced, cotton farmers have already picked and sold some seed cotton, making it difficult to make statistics on the basis of area or production subsidies.

Therefore, the Cotton Subsidy regulations in the mainland have not been announced yet. This is also one of the main reasons for the nearly halting of the purchase and sale of seed cotton and lint.

Pan Mingkun said that many cotton farmers and ginning mills in Hubei and Hunan are waiting for the subsidy rules to be issued. It is expected that cotton farmers will be able to sell a large number of cotton cotton after the subsidy rules are introduced.

When talking with some cotton growers, reporters also learned that most cotton growers were reluctant to sell cotton seeds in the hope of increasing their income later.

The sales director of a large cotton sales company in Hubei province said that because of the worry that the cotton prices in the future market continued to fall, the company currently has only more than 400 tons of lint inventory, which is at a relatively low level compared with previous years.

At the same time, the company's processing plant will immediately process cotton lint and purchase the cotton seed quickly, and avoid the risk of further decline in lint prices.

It is understood that the current cotton farmers in Hubei province seed cotton sales progress of 60% - 70%.

At present, the purchase price of seed cotton in two provinces of Hubei and Hunan is about 3.15 yuan / Jin, which is similar to the current seed cotton purchase price in Xinjiang.

Due to the decline of cotton quality after the frost, the purchase of ginning plants and traders tended to be cautious. The purchase price of seed cotton in Xinjiang has declined recently.