What Are The Effects Of Target Prices On Cotton Sub Markets?

The "target price" subsidy system implemented in 2015 is conducive to the steady development of cotton growers and textile industry. Although the cost of cotton planting is rising, subsidies can not catch up with the cost, but rather reduce the cost of planting by reducing the amount of subsidies.

On the evening of April 7, 2015, the national development and Reform Commission website released 2015. Xinjiang cotton The target price level is 19100 yuan per ton, 700 yuan lower than last year. The price of this target is released in the spring plowing and sowing time. It aims at stabilizing cotton growers' confidence in planting cotton and contributing to the steady development of cotton growers and textile industry. What are the effects of this target price on cotton sub market?

1. The supply of cottonseed will remain stable in Xinjiang area.

In 2015, the target price of cotton in Xinjiang was reduced by 700 yuan / ton. Subsidies for cotton farmers Standards do not seem to have much impact. The price of cotton seed will be reduced by 0.3 yuan / kg, and the net income per kilogram can still be maintained at more than 1 yuan. According to the China cotton information network, when the Xinjiang regiment and local cotton farmers calculate the cost of cotton planting, their planting intention is limited by a slight decrease in cotton yields. Xinjiang is the main producing area of cotton in China, and its annual output accounts for half of the country. The stability of local cotton planting in Xinjiang will stabilize the supply of cottonseed, and the local cotton processing enterprises in the mainland and Xinjiang will have enough raw material supply.

Two, the quality of cottonseed will be improved.

At the beginning of the establishment of the target price, the state gave a major premise for the implementation of the target price, that is, according to the cost of cotton planting, the proper benefits of cotton farmers can be guaranteed. As the cost of cotton planting increased, the target price dropped in 2015. It can be seen that when the price was set at 19100 yuan / ton, the state weighed all factors. Although the cost of cotton planting is rising, subsidies can not catch up with the cost, but rather reduce the cost of planting by reducing the amount of subsidies. That is, the state can not increase the subsidy amount because of the high cost of cotton planting. Instead, we should try to reduce the cost of cotton planting from other aspects and optimize the cotton planting structure. This will change the cotton growers' planting and management concept so as to improve the quality of cotton instead of pursuing the yield per unit area and the lint percentage. The quality of cotton increased, and the quality of cottonseed increased correspondingly.

Three, the quality of short staple can be increased and the price may be high.

2012/13 and 2013/14 have been opened for three years, and the quality of cotton in Xinjiang has been greatly reduced. The problems such as "silk", impurities, short length and large horse value are everywhere. The "target price" subsidy system, implemented in 2015, allows cotton enterprises to directly connect with downstream customers. On the one hand, cotton processing enterprises should improve the quality of lint processing, strictly control "three levels", and improve the quality of lint. With the continuous shrinking of the cotton pulp market, the proportion of refined cotton grade cotton short fiber demand increased further, and the quality of Xinjiang short linen improved. The proportion of short staple with poor quality and low price gradually shrank. Cotton ginning factory The added value of cotton subsidiary processing enterprises has been raised accordingly.

Four, cotton to market cotton vice market overall decline risk reduction

After the target price of Xinjiang was released in 2015, market participants' expectations for cotton prices also gradually became clear. In 4-5, the possibility of stable cotton was greater, and some support was given to the cotton sub market, and the participation rate of cotton sub market was expected to rise further.

To sum up, the release of target prices in Xinjiang in 2015 is generally good for cotton sub market as a whole. After May, the cotton sub market will soon usher in a slack supply season. Under the condition of slack up, the market price of cotton byproducts can be expected through the target price "spring breeze".