Cotton Market Lacks Further Impetus

In April, USDA's monthly supply and demand report showed that global cotton production decreased slightly from 91 thousand tons to 21 million 729 thousand tons, of which India produced 5 million 835 thousand tons, still the world's first cotton producing country, and global consumption increased by 82 thousand tons to 23 million 860 thousand tons, of which China's consumption increased by 109 thousand tons; the end of the world inventory decreased by 245 thousand tons to 22 million 255 thousand tons.

In addition, China's output and imports remained on the forecast of last month, consumption increased by 109 thousand tons, and terminal stocks reduced by 109 thousand tons. The reduction in final inventory was all due to the increase in consumption. China's output in the new year was 5 million 182 thousand tons, 7 million 76 thousand tons in consumption, 1 million 894 thousand tons in production and sales, and 805 thousand tons in the 1 million 89 thousand tons of imports.

Next, we will focus on the next two weeks. cotton Market changes:

First, before the start of the cotton market, raw material inventory of textile enterprises has been relatively low, with stocks for about 1-2 weeks. Futures first started to rise under the help of funds, resulting in the relative shortage of spot goods, the increase in the proportion of upstream orders, and the increase in sales prices, which led traders to improve their sales profits. Most traders reflected that the "bottom line and no bargaining" had gradually become a taste of seller's market, and this situation was only a few years ago.

Second, driven by the rise in futures, the spot price of cotton rose by about 100~300 yuan / ton this week. With the rise of the day before yesterday, several companies raised the price of 200 yuan / ton, and the Xinjiang cotton price increased by 500 yuan / ton, but downstream. Gauze The goods are not obvious, the price is not moving, the inventory is high.

Third, the recent textile enterprises processing profit has also changed, from the previous loss to profit of about 300, and recently changed back to losses, mainly upstream lint price increase, resulting in increased cost, but the downstream yarn is not yet. Price increase Or cost transmission failure. At present, yarn is greatly influenced by imported yarn, and the price transmission is more difficult. With the rise of domestic spot price and the import or revival of yarn, it will impact domestic market.

Fourth, the day before yesterday, the NDRC convened the relevant departments to study the problem of the abnormal rise of cotton futures prices in the near future. The meeting clearly stated that the amount of reserve cotton in the 2015/16 year will ensure market demand. In the case of market demand, the amount of input can be increased on the basis of the original 2 million tons. In addition, the quota discussion is also involved. The policy of not issuing additional tax quotas will probably be adjusted according to the market supply and demand situation. The market will be over-the-counter funds and may misread the news of the NDRC.

Fifth, it is understood that the selling price of reserve cotton is weekly pricing based on the weighted price of the index of internal and external price, adjusted on Monday. At present, with the rising price, domestic and foreign index weighted price increase has surpassed spot gains, while the reserve cotton has 600-1400 yuan / ton discount, but the price relative competitive advantage is weakened, and the attractiveness of the docking cargo side decreases.

In short, with the rise of cotton futures prices in the near future, the price of spot lint has increased by 200-600 yuan per ton. Because of the unsmooth conduction of yarn costs in the downstream, no increase has been seen, and the consumption season is coming. Pakistan's consumption has increased by 109 thousand tons, resulting in an increase of 131 thousand tons of imports. The rest of the world's indicators have not changed significantly. The global supply of cotton is still loose in the new year, but it has begun to stock up.