The Impact Of Reserve Cotton Rotation On The Price Of High-Grade Cotton Will Not Be Great.

Recently, the news of China's cotton reserves has become clearer as the world's largest.

Production, consumption and China, which accounts for about 50% of the world's inventory, can not be earthshaking or breathtaking.

Therefore, on the eve of the reserve cotton rotation, let's look at other countries' view of China's cotton reserves.

According to the ICE report, with the further decline of cotton prices, the area of cotton planting worldwide is expected to decrease by 9%. In 2016, cotton consumption will be higher than output for the first time in the world, and cotton consumption in China is expected to rise upstream.

China's cotton reserves are basically sold out.

Cotton is considered to be a large number of middle and low grade cotton market, while high-grade cotton is still scarce. Therefore, the impact of reserve cotton rotation on high-grade cotton prices will not be great.

On the other hand, China's low-end cotton yarn market is revived. Therefore, overseas markets, especially textile enterprises in India, urgently need to implement China's cotton spinning policy.

In 2015, supported by the lowest purchase price of MSP in India, cotton prices in India stabilized at a high level.

Export competitiveness has been gradually weakened, and international market share has been occupied by countries such as Vietnam and Bangladesh.

Besides the impact on international cotton prices, the rotation of China's cotton reserves will also have a certain impact on the supply pattern of the international cotton yarn market.

According to the survey, on the eve of the Chinese cotton reserve rotation, the foreign cotton bonded inventory of China's major ports began to decrease, and the procurement of foreign cotton by Chinese textile enterprises also slowed down, especially for the purchase of US cotton and Australia cotton.

Insiders predict that China's cotton imports will be up to 1 million tons in 2016, and domestic supply and demand will be basically balanced.

In the case of reasonable price of China's cotton reserves, China's cotton imports will not change much in recent years, and China's cotton stocks will gradually decrease.

According to a foreign institution, the price of cotton falls deeper before planting in spring, and the greater the chance of strong rebound later.

Therefore, in the spring sowing season, the rotation of China's cotton reserves may have an impact on the global cotton planting area, and the price and market orientation of the rotation are also very important.

According to market rumors, the price of China's cotton reserves will refer to the international market price. Therefore, the international market has speculated that if the Chinese government is willing to undertake such a high cotton price difference, when the price of China's cotton reserves is in line with the international cotton price or even lower than the international cotton price level, China's cotton reserves will change or will change the global cotton supply pattern. What will the countries like Vietnam and Bangladesh depend on raw material imports? What will those main cotton exporters do?

To sum up, no matter from which point of view, about ten million tons of reserve cotton inventory is China's most powerful voice to control cotton prices.

How to make good use of these stocks will be a turning point and a start for the global cotton and cotton yarn market, and it is also the key to changing the global supply pattern.