The Price Of Cotton Is Easy To Fall, But The Price Is Falling Sharply.

According to statistics, during the Spring Festival Golden Week, the retail sales of 100 major large retail enterprises in China decreased by 6.6% compared with the same period last year, and the growth rate dropped to the same level in 2009 after the financial crisis, which was 4.8 percentage points higher than the decline in the Spring Festival Golden Week in 2015.

In recent times, investors are generally pessimistic about the price of speculation, rumors and ferment and weak global economic growth, and Zheng Mian prices continue downward. At present, the state store cotton is in the out of stock cycle before it changes. Cotton price It is easy to fall and difficult to rise. Investors are advised to remain cautious and empty thinking.

The current price is down sharply.

On the one hand, domestic cotton spot prices continued to fall. In February 29th, the domestic cotton index 3128B price was reported at 12090 yuan / ton, down 119 yuan / ton compared with last week. Although the start up of textile enterprises is better than expected after the Spring Festival, due to the relatively large inventory of enterprises, and the rapid fall in cotton prices and the strong atmosphere in the market, cotton enterprises generally adopt the strategy of "buy along with purchase" and "multiple purchases" to reduce risks and purchase intention. At the same time, close to the store, the spot traders stepped up sales, resulting in an imbalance between supply and demand, and cotton prices were dropping.

On the other hand, Zheng cotton futures fell sharply. Last Tuesday to 5 trading days yesterday, Zheng cotton main 1609 contract has fallen by about 4.9%, and has now fallen below the threshold of 10000 yuan, a record low of 9990 yuan / ton. Affected by the global economic downturn and the close sale of national cotton and other factors, the market is expected to be more pessimistic.

Huge inventory to suppress cotton prices

In February, the international cotton advisory board (ICAC) predicted that in February, global cotton production and consumption were 22 million 461 thousand tons and 24 million 84 thousand tons respectively, representing a decrease of 14% and 0.9% compared with the same period last year. Although production has dropped faster than consumption, the phenomenon of output larger than consumption has changed, but huge inventories are still firmly pressing cotton prices.

In addition, China's huge volume Cotton reserves Going inventory is expected to suppress cotton prices for a long time. The market anticipate that the policy of reserve cotton outgoing may start in April, and the price of reserve and output will have a decisive impact on the cotton price trend in the later stage. At present, the market generally believes that it is imperative for national cotton stocks to go out of stock. In order to ensure the effective arrival of stock reduction, the departments concerned may adopt a more market-oriented dumping and storage pricing mode, which is likely to cause further decline in cotton prices. Therefore, we believe that before the implementation of the treasury policy, Zheng cotton will continue to operate in a weak way.

Sluggish economic recovery dragged down cotton prices

The global economic outlook is more pessimistic. In the recent economic outlook report, the OECD predicted that the global economic growth rate will be 3% and 3.3% in the next two years, down 0.3 percentage points from the expectations made by the organization in November last year. The global economic recovery will remain very slow. The US economy will grow by 2% and 2.2% respectively in the next two years, 0.5 and 0.2 percentage points lower than previously expected, and the euro area's economic growth rate is 1.4% and 1.7% in the next two years, 0.4 and 0.2 percentage points lower than previously expected. Pessimistic expectations of economic recovery continue to erode investor confidence.

According to the statistics of the China National Business Information Center, during the golden week of Spring Festival (from New Year's Eve to early sixth, February 7th to February 13th), the retail sales of 100 major large-scale retail enterprises decreased by 6.6% compared with the same period last year, and the growth rate dropped to the same level in 2009 after the financial crisis, which was 4.8 percentage points higher than that in the 2015 golden week of 2015. Retail sales data dragged down cotton prices, although cotton production has continued to shrink, but in the face of huge inventory, the decline in output has limited impact on supply and demand rebalancing, and demand side warming can really support cotton prices.

To sum up, the sluggish economic recovery and the dumping and storage of national cotton reserves still dominate cotton prices before they are implemented. Zheng cotton The trend is cloudy, and the bears may again exert their strength. At present, the positive factors such as production reduction are not enough to form effective support, and investors are advised to remain cautious and empty thinking.