RMB Devaluation Brings Good Cotton Market To Welcome Change

At present, the supply of cotton resources in the world is decreasing, such as the continuous decline of cotton planting area in the United States, and the cotton planting area and output in China have also declined.

It is expected that this will push the overall profit margin of Khmer products.

Zhu Rong, director of the Research Institute of industrial economics of the cotton industry system, believes that the continuous shrinking of cotton growing areas in the mainland has become an inevitable trend and is difficult to reverse in a short time.

But with the domestic

The process of de stocking and the integration of domestic and foreign cotton prices will lead to a demand for domestic cotton in the future.

It is not all bad news, especially the opening window of depreciation of RMB. This change is undoubtedly good for the textile and garment industry with relatively high dependence on exports.

Li Li analysis, to China's exports

For example, the export price of cotton yarn can be reduced by around 590 yuan per ton based on the depreciation rate of 1.86%, which will enhance the bargaining power of export products, enhance international competitiveness and help restore the export market share.

Li Li analysis, from the domestic market, new cotton began to appear on the market, the market is not short of cotton.

At present, textile enterprises basically use their products to buy goods and have low enthusiasm for stocking.

The reduction of cotton price fluctuation interval is a good phenomenon for processing enterprises and downstream textile enterprises, and they can obtain stable operating profits.

However, imported yarn takes up some market share, and it still takes time for downstream demand to pick up.

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The state started the temporary storage policy in the main cotton producing areas in China since 2011. The temporary storage price of cotton was raised from 19800 yuan / ton (standard grade lint) in 2011 to 20400 yuan / ton in 2013.

Li Li, a cotton analyst at Huaan futures, told reporters that during the three consecutive years of open storage and purchase policy, the State Reserve storehouse collected 16 million 180 thousand tons of standard lint, which is two times the annual consumption of domestic products, while the total reserves in the three years are only 4 million 200 thousand tons.

That is to say, the net storage capacity of the national reservoir is as high as 12 million tons, and the total volume of the national storage is estimated to be over 14 million tons, which is equivalent to the production demand of the downstream industry for two years.

The implementation of the temporary storage policy, while protecting the interests of cotton farmers, also made the domestic cotton market out of line with the international market. The production cost of textile and garment enterprises increased, and the international competitiveness of their products was greatly reduced, and the export volume dropped sharply.

In order to change the passive situation of domestic cotton storage and storage, last year, the domestic cotton market support policy was adjusted to the target price support of 19800 yuan / ton for Xinjiang cotton area from the past new cotton temporary storage. Compared with the temporary storage policy, the purchase price of Xinjiang cotton was reduced by 600 yuan / ton. The central government also subsidized cotton farmers in the main cotton producing areas of Anhui, Shandong and other 9 provinces, with a ceiling of not more than 2000 yuan / ton (lint).

The target price of Xinjiang cotton area has been lowered to 19100 yuan / ton this year, and the Cotton Subsidy Policy in the mainland has not yet been introduced.

Reporters learned that although the domestic and international cotton market prices further closer, but the domestic and foreign cotton prices under the 1% tariff is still 2000 yuan / ton, import cotton prices still occupy relative advantage.

Under the strict control of import quotas, cotton imports are decreasing year by year.

Cotton growers have greatly reduced their planting income.

According to the monitoring of the price and cost investigation and Supervision Bureau of the provincial Price Bureau, we found that the average selling price of cotton in the cotton area of our province last year was 676.65 yuan per 50 kilograms, compared with 50 yuan per 977.03 yuan in 2013, a decrease of 300.38 yuan, and the net profit of cotton per mu decreased by 280.13 yuan compared with that of last year.

Li Li told Keji, with the sharp decline in planting income, the actual cotton planting area in the whole country is expected to be 52 million 640 thousand mu this year, a decrease of 13 million 450 thousand mu compared with 2014 and a decrease of 20%.