Cotton Production Is Basically Settled In The New Year. The Gap Between Supply And Demand Of Cotton Is Not Large.

The textile industry is known as the "golden nine silver ten" traditional season of orders, but with the recent downturn in the downstream market, the peak season of orders has not yet arrived this year.

In the background of sluggish demand, most spinning enterprises continue to maintain the strategy of buying and using materials on the raw materials, which is very difficult to form effective support for cotton prices.

In addition, for the prediction of cotton consumption, with the changes in the purchasing situation of textile enterprises, orders were improved from 3 to April this year, and textile enterprises expected to increase consumption in the new year. Orders from 7 to August were relatively poor, and textile enterprises expected to reduce consumption in the new year.

It is understood that the current textile enterprises orders situation is still no obvious improvement, in the context of the slow economic recovery, the traditional textile industry is also experiencing pformation and upgrading of the plight.

Therefore, the increase or decrease of cotton directly determines the contradiction between supply and demand, and directly affects the rise and fall of cotton prices.

According to the author's understanding, the output of new cotton in different cotton producing areas in Xinjiang is uneven. Although it is affected by the high temperature in July, the output of new cotton in Xinjiang is roughly 10% lower than that of last year, and the total output of new cotton is 4 million tons.

In addition, the industry believes that the mainland cotton because of planting area decreased significantly compared with last year, the total output fell more.

According to the market related data fine-tuning, the total output of cotton in the new year is expected to be 1 million 200 thousand tons, and the quantity of imported cotton will continue to decline to 1 million 200 thousand tons.

According to the cotton association data adjustment estimate, the initial inventory of cotton is 800 thousand tons, and if the level of the previous year is taken into account, the cotton consumption in the new year will be about 7 million 400 thousand tons.

Therefore, from the perspective of supply and demand, cotton may have a supply gap of about 200 thousand tons, but the overall supply gap is not large.

In the past few years, the state has made frequent efforts in the field of cotton policy, especially in the 3 years of continuous opening and storage.

Since last year, the state has abandoned the policy of purchasing and storage, instead of direct subsidy policy.

Such a change indicates that the government will gradually withdraw from its secondary position in the price regulation of cotton and let the market supply and demand decide the price.

In this way, we should pay more attention to the supply and demand of the market in analyzing cotton prices.

Although the purchase and storage stopped, but tens of millions of tons of state-owned cotton stocks are still eyeing, this is also the cotton industry's lingering crisis, because this quantity is enough for domestic textile enterprises to use for a year and a half.

So,

It still has a bearing on the market's view of cotton price, or rather, it brings unlimited pressure to the market, which brings heavy burden to cotton prices.

I believe that in the early part of 2015/2016,

Basically, as the new cotton market goes on a large scale, the price will gradually decline.

The reason is that even if we do not consider the national cotton reserves, the supply gap of new cotton is not large. At present, cotton consumption is likely to decline.

Therefore, in the early period of 2015/2016 supply is not tight, Zheng cotton price is very difficult to pick up, high selling short selling is relatively advantageous, this is also the time that the cotton ginning factory and traders are using the futures tools to preserve value.

At the same time, the fall in cotton prices will bring cheap raw materials to the downstream while boosting.

If time goes on, cotton consumption will reach a certain level. In the later stage of 2015/2016, it is necessary to pay attention to whether there will be a new cotton supply gap. If there is no supply gap, Zheng cotton will still fall after the medium term rebound. The decline can be concerned about the cotton growers' degree of acceptance of seed cotton prices and the internal and external cotton price ratio; if there is a supply gap, Zheng cotton will have a decent rebound, and the rebound will also be subject to the impact of throwing and storing policy.