Cotton Spinning Enterprises Further Squeezed Profits, Many Enterprises Began To Close Down Or Change Careers.

In the previous international trade, China's imports once accounted for about half of world trade, and after 2014 years, with the sharp fall in domestic prices and the change of trade policy, China's imports began to decline sharply, restricting the global cotton demand, and thus dragging the global cotton market.

At present, cotton has no obvious sexual price advantage compared with other varieties of the same season. The cotton growing area in main producing countries in 2016/17 is difficult to increase, while the consumption of most of the main selling countries is still increasing. Moreover, China's demand is also moderately warmer in 2016. At that time, global cotton will be further stocking and market pressure will be further reduced.

With the fall in cotton prices, cotton production area and output in main producing countries began to decline in 2012, and global cotton demand began to recover slowly in 2012, and the situation of supply exceeding demand was gradually improving.

As of 2014/15, production is still more than sales, so inventory is still accumulating.

According to the US Department of agriculture, the world's cotton production in 2014/15 is estimated to be 25 million 970 thousand tons, down 1.1% from the same period last year, consumption of 24 million 80 thousand tons, an increase of 0.8% compared with the same period last year, and the final inventory of 2442 million tons, an increase of 8.7% over the same period last year.

The inventory consumption ratio representing supply and demand level continued to increase, from 94.1% in 2013/14 to 101.4%.

According to the US Department of agriculture, 2015/16 cotton plantation area was 31 million 240 thousand hectares in the year of 2015/16, a decrease of 2 million 920 thousand hectares compared with 2014/15 and a decrease of 8.6%.

The yield per unit area was 723 kg / ha, a decrease of 40 kg / ha compared with 2014, a decrease of 5.2%.

In 2015/16, the total output of cotton in the world was 22 million 610 thousand tons, down 12.9% compared to the same period last year. Consumption was 2427 million tons, an increase of 0.8% compared with the same period last year, ending 22 million 760 thousand tons, down 6.8% from the same period last year.

Global cotton representing supply and demand levels

Consumption decreased from 101.4% in 2014/15 to 93.8%, but the overall level is still at a high level.

If China is eliminated, the end of global cotton 2015/16 inventory will reach 8 million 580 thousand tons, representing an inventory consumption ratio of 50% of supply and demand levels, which will continue to decline compared with 56.9% in 2014/15.

Compared with the same season crop soybean (3718, 12, 0.32%), corn (1912, 3, 0.16%) ratio slipped to a low point, farmers' willingness to grow cotton decreased significantly, cotton production area and output in India, the United States, Pakistan, Brazil and other main producing countries declined, while the demand of other countries in China except Pakistan and China continued to grow. Although China's demand dropped, the purchase and purchase of the main export countries increased the demand for global exports, coupled with the relatively slow development of India, Turkey, Bangladesh and Vietnam, which was limited by the decline of the whole ball economic growth. Actually, since 2012,

Demand continues to pick up after 2011, leading other major producers and exporters to open their inventory models.

In the 2011-2013 years, the domestic stock is still being collected and accumulated in 2014.

The abolition of the 2015 year old stock began to officially take place, but the stock remained at a high level, which constituted a more obvious pressure on the domestic market. The pressure would eventually be pmitted from the trade side to the outside market, just like the domestic import and export of the international market.

In this situation, the domestic and foreign cotton markets show a strong external and weak pattern as a whole, which leads to an international market driven by export demand. Although supply and demand level (except China) is almost the same as that of 09, there is still a lack of momentum.

Analysis of the global cotton stock composition is not difficult to find that in recent years, nearly 60% of global cotton inventories are concentrated in China's cotton stocks, while China's cotton stock is mainly stored in state reserves. After 2011 years of rapid roller coaster price decline, the state started a 3 year storage to protect the farmers' income, and increased the demand at that time (by increasing the subsequent supply), supporting domestic cotton prices at a relatively high level in 2011-2013 years, forcing textile enterprises to import more, thereby stimulating international export demand, and thus supporting cotton in the past few years.

While protecting farmers' support for the market, it has also damaged the development of the cotton textile industry. The cost of enterprises is high, while the export and domestic sales of downstream products have declined along with the global economic decline. The profits of cotton spinning enterprises have been further reduced, and many enterprises have begun to go bankrupt or change careers.

In order to alleviate this contradiction, the state abolished the purchase and storage policy to the target price system in the 2014 year of the year. After the abolition of the stock market, the last straw fell to the bottom of the cotton market. After that, the cost of cotton enterprises began to recover. However, the huge amount of stocks in the state reserve still need time to digest and bring the sequelae to the weak market. The cost of supporting the market in 2011-13 years is to suppress the current market.