Cotton Overall Inventory Pressure Higher

Judging from the direction of China's textile industry adjustment, unless the market end demand suddenly appears explosive growth, otherwise the enterprise will not take the initiative to return to the low end, low value-added product competition. So, a lot of low quality cotton can only be exported, or when the domestic cotton price is lower than the international cotton price, it will be exported in finished or semi-finished products.

From the annual supply and demand situation, although the 2015/2016 year began to enter the inventory cycle, but the overall inventory pressure is greater, and has a long-term inhibitory effect on cotton prices. First, after 3 years of large-scale storage and storage, the stock of the national cotton storage has reached 10 million tons. In the year of 2014/2015, the government formulated the policy of round storage to gradually digest inventory, and the basic principle was "throwing more, throwing less, and throwing away first."

As of August 31st, 2014/2015 National cotton reserves A total of 63411.7413 tons were sold. Compared with nearly 10 million tons of inventory, the amount of 2014/2015 storage dropped to a minimum. If we want to reduce the inventory pressure, we need to continue to sell cotton reserves to the market at the right price. This means that even later, even if cotton prices rise, the space will be limited, and will encounter the "ceiling" of the reserve cotton wheel.

In addition, the low quality cotton in the Treasury is also difficult to meet the market demand. The high quality cotton resources needed for textile cotton will be obtained from two channels. One is the new cotton made in China, and the other two is imported quality. cotton 。 We should reduce the stock of national cotton reserves, or sell below the market standard cotton price, or sell to production. Low end textiles Enterprises.

To sum up, in the new cotton market listing in 2015/2016, there may be structural changes in cotton market, and the probability of price weakness oscillation is larger. At the same time, due to tight acquisition funds, cotton prices may drop sharply when new cotton is listed in large quantities. The author thinks that there is a big pressure to go out of stock in the cotton market in 2015/2016, and the domestic cotton price may be lower than the international cotton price.

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It is understood that in view of the huge stockpile of cotton reserves and market demand, it is very likely that the country will become normal in the future. As a downstream cotton enterprise, we should carefully consider how to adapt to this situation as soon as possible, make good use of reserve cotton wheels, choose suitable resources for enterprises, control production costs, and play a role of icing on the cake for enterprise management. As a government, in view of the low turnover of the cotton reserves, we should seriously consider how to formulate an effective round out policy in the shortest possible time, which is conducive to the healthy development of the cotton industry and the adjustment of cotton structure, inventory and financial burden. This not only tests the wisdom of the decision-making of the government departments, but also makes us look forward to the related policies of cotton reserves in 2015.

According to the transaction data released by China cotton storage information center, cotton turnover reached 52694 tons in 2011, accounting for 15.97% of the total planned output of resources (15.97% tons of domestic cotton production plan in 2011), and cotton turnover reached 987 tons in 2012, accounting for 0.21% of the total output volume (2012 domestic cotton production plan 470 thousand tons).

In the first half of August, in the nationwide textile industry survey organized by the Central Cotton Information Center, it was learned that most textile enterprises believed that the quality of cotton in 2011 was relatively guaranteed and that they could be selected for auction. The quality of cotton from 2012 to 2013 was not ideal, unless the price had a larger decline, otherwise it would not take part in the auction. This is the market, not the will of any person as a shift, only with supply and demand. A well-known personage in the futures market also said that the results of the cotton reserve deal were disappointing. In fact, it was not much related to quality and price. The key point is that there are too many cotton resources now, and the enterprises have great choice. If the market does not have cotton, then the cotton with inferior quality will also be good.

Besides the low quality and high price of cotton, the low turnover of reserve cotton has a certain relationship with the difficulties of textile enterprises in recent years, especially in the cash flow of enterprises. At present, domestic cotton is basically cash transactions, and downstream sales of yarn products have a certain account period, which has increased pressure on the cash flow of textile enterprises. Most textile enterprises clearly stated that participating in the auction of cotton reserves should not only pay a certain margin, but also auction cotton weight at least more than 200 tons. Therefore, for most small and medium-sized enterprises, it is very difficult to produce such a cash, even if there is a fancy cotton, there is no money to participate in the auction.