Overview Of Global Cotton Fundamentals In 2016/17

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The February monthly report of the Advisory Committee (ICAC) released the global supply and demand forecast for the first time in 2016/17.

According to forecast, the beginning of 2016/17

It was 20 million 540 thousand tons, a year-on-year decrease of 7.3%, output of 23 million 80 thousand tons, an increase of 2.7%, a total supply of 43 million 610 thousand tons, a decrease of 2.3% over the previous year, and 24 million 130 thousand tons of consumption, an increase of 0.2% over the same period last year.

7 million 680 thousand tons, an increase of 4.2% over the same period, with an import volume of 7 million 680 thousand tons, an increase of 4.2% over the same period last year, and an inventory of 19 million 480 thousand tons at the end of the year, a decrease of 5.2% over the same period last year. 8 million 630 thousand tons of stocks outside China increased by 1.3% compared with the same period last year, and the global inventory consumption ratio was 81%.

It was 4 percentage points lower than this year.

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In 2016, China's cotton "go stock" took the lead in the about 10000000 tons of state cotton stocks.

Because of this, the market is more and more concerned about the national cotton reserves.

At present, there are three main points in the market for national cotton reserves: first, the time of rotation of state-owned cotton stores; the industry generally believes that it will advance ahead of 2015; the two is that the volume of rotation may be relatively large; the three is that the price will be reduced.

According to insiders, the current rules for the delivery of cotton reserves are at the stage of deliberation. There is still some time left for finalization. After the Spring Festival, the policy may fall.

As early as last year when the national cotton store went out, Hou Zhenwu, deputy general manager of China cotton reserve management company, said that the rotation of cotton reserves was in accordance with the principle of promoting sustainable and healthy development of the industry, guiding the smooth operation of the market, reducing the financial burden and improving the cotton reserve control mechanism.

The premise of the round out policy is not to suppress the market, and adopt the way of "asymmetric rotation, first round and backward entry, multiple rounds and fewer rounds" to orderly digest the state reserve cotton stocks and gradually reduce the reserve scale to a reasonable level.

And when the market situation is more complicated this year, when the reserve cotton will come out, it will not only achieve the purpose of inventory, but also suppress the market.

At present, there is a big difference in the prediction time of storage cotton in the market.

There are many people in the industry who believe that the state will turn out cotton reserves in 3 and April. Although there is a lot of doubt about this statement, it has not been able to stop the rumors from becoming more and more true.

Merchants futures Yang Zhijiang believes that the best storage time for cotton reserves should be before the end of April.

In this way, the cotton planting area in the northern hemisphere will be affected by the price of dumping and storage, and the global cotton supply and demand pattern in 2016 will be improved.

According to statistics, as at the end of last year, the sales rate of lint cotton in Xinjiang was less than 40%. The formulation of the rotation time was inclined to the new cotton that was not sold by the Xinjiang production and Construction Corps about 1 million tons, or more than 1000 tons of cotton reserves. Yang Zhijiang admitted that this test is not only the wisdom of the management, but also the courage of the management.

Due to the different positions of the industry, there are differences in the relevant suggestions for the delivery of cotton reserves.

Wang Xiaodong, President of Hebei new big east textile company, said that the time needed to store cotton should be around May 2016.

Cai Yajun, chairman of Hubei Yinfeng group, believes that after June or July, it will be more reasonable.

Cai Yajun said that the current cotton market is facing the situation of prominent structural contradictions and overcapacity.

Since the beginning of 2015, the consumption of new cotton in China is less than 2 million tons. In 2015, the total output of cotton was about 5 million 600 thousand tons, and now it still has about 3 million 500 thousand tons. If the consumption is 500 thousand tons per month, the cotton on the market can be maintained until the end of June.