At Present, The Three Aspects Of Cotton Market Are The Most Important Issues.

At present,

There are three main problems in the market.

Problem 1: supply and demand

Because of declining income in recent years, cotton planting area has also declined.

According to the survey data, in 2015, domestic cotton output was 5 million 200 thousand tons, 940 thousand tons less than that in 2014, with a reduction of 15.25%.

In 2016, the domestic cotton planting area was 44 million 630 thousand mu, a decrease of 6 million 560 thousand mu compared with the same period in November 2015, a decrease of 12.8%, a 5.6 percentage point drop compared with the survey in November 2015.

In 2016, domestic cotton production is estimated at 4 million 200 thousand tons.

When it comes to supply, there is no need to involve state reserve stocks.

From 2011 to 2013, with the sharp decline in cotton prices, a large number of cotton flows into the national repository.

In 2011, it received 3 million 250 thousand tons of storage, 6 million 500 thousand tons of storage in 2012, and 6 million 300 thousand tons in 2013.

In addition to several rounds of irregular storage and digestion inventory in recent years, there are nearly 10 million tons of cotton in the national storage warehouse.

In relative demand, the domestic cotton supply data in 2016 was fairly pparent: output was estimated at 4 million 200 thousand tons, 894 thousand tons in quota, and 10 million tons in state reserve stock.

However, the cotton resources in state reserve warehouses need to be treated dialectically.

The cotton fiber quality will drop one grade every year.

Moreover, the quality of cotton purchased in the past few years is uneven. It is worth studying whether the national cotton can be effectively supplied.

Whether the late national cotton reserves are popular will need a question mark.

What is the demand for cotton nowadays?

The main purpose of cotton is to make cotton yarn.

According to the proportion of cotton, cotton yarn is divided into pure cotton yarn, polyester cotton yarn and purified yarn.

It is difficult to verify the demand of cotton in China. The annual increase of the official spinning data is mainly due to the increase in the production of chemical fiber yarn.

In 2015, pure cotton yarn accounted for about 15% of social spinning.

In normal years, the annual demand for cotton is between 6 million and 7 million tons.

But in recent years, due to the slowdown in global economic growth, domestic textile enterprises have moved to Southeast Asia.

Industry advantages are highlighted, and domestic demand for cotton is suppressed.

In addition, low price imports of cotton yarn also hit the domestic market.

2015 cotton yarn imports 2 million 222 thousand and 400 tons, an increase of 14.14% over the same period, according to 1.1 tons of cotton production 1 tons of cotton yarn, 2 million 500 thousand tons of cotton demand.

Domestic demand for cotton is estimated at 4 million 500 thousand tons in 2016.

If the country does not take further measures to import cotton yarns, domestic cotton demand will not increase significantly.

Question two: Policy

When to throw away the store and what price to throw away? These two problems are the most important concerns of the market participants.

As a strategic resource, cotton is related to cotton farmers, and it is related to textile workers.

The cotton industry policy is constantly adjusting and improving from the planned economy era to the market economy era.

Today, the "visible hand" and "invisible hand" are at the same time playing a role.

According to reporters, from 2011 to 2016, the state announced a series of cotton guiding prices, including the purchase and storage of prices, throwing reserve prices, target prices and so on.

In March 18th, Si Yinjian, deputy director of the national development and Reform Commission, introduced the cotton reserve policy. At present, the key point of cotton regulation has changed. The main task is to go stock and promote the supply side reform of cotton industry.

In addition, cotton throwing and storage will become normal in the next five years, but in view of the continuous decline of cotton planting area in China, how to balance the two cotton resources markets in the mainland and Xinjiang, how to solve the import quotas and how to control the impact of imported cotton yarn is a topic that the country needs to study.

At present, the dominant price is supply, and the main factor affecting supply is dumping.

The dumping and storage is subversive and a real market-oriented move, which is conducive to the return of internal and external spreads.

In addition, according to people familiar with the matter, if the policy of dumping and storage is not announced this week, the new year will be postponed until May.

As for the price of throwing or storing, or the average price of inside and outside.

Question three: anticipation

From the perspective of labor and policy, China's relative advantage is decreasing, but its absolute superiority still exists.

Now, excess capacity is conducive to deepening the reform of supply side, and is conducive to the survival of the fittest of enterprises.

For domestic cotton prices, 2016/2017 is expected to be between 10500 and 12000 yuan per ton.

If the quality is improved, the price will be higher.

The time to go to capacity is about two years. In the late 2015/2016, cotton prices fluctuated in space and did not rule out the possibility that the bottom appeared in 2017.

Cotton prices must fall to the international market to digest inventory. In the long run, domestic cotton prices are still bearish, even if the middle rises, the magnitude will not be too great.

In addition, the delay is expected to bring support to the Treasury, thus giving rise to the recent rebound, but it is only a rebound, not a reversal.