China'S Cotton Production Policy Has Gained A Lot Of Competitiveness.

Recently, the market expectations of the national cotton spinning policy landing.

"Notice on arrangements for rotation of cotton reserves in the state" clearly stated that the dumping time in 2015/16 was 31 days on May 3rd -8, and the total output was not more than 2 million tons. The reserve cotton was organized by the China Fiber Inspection Bureau to conduct a comprehensive notarization test on quality and weight.

Based on the expected decline in cotton prices, raw materials and yarn stocks are generally not high.

Futures prices reflect expectations, but in view of the current domestic and external situation of the textile industry and cotton consumption and cotton substitution, demand does not support a significant increase in cotton price raw materials.

For the post market price trend of cotton, Liu Yi said that at present, small businesses have gone bankrupt, and those who survive have a certain market share.

Now is the off-season consumption, terminal demand is not fully up, there is still demand for procurement in the late stage.

In the long run, the supply pressure is reduced, and the substitution of yarn and chemical fiber is also weakening. The negative factors have been gradually reduced, and the basic pattern has changed. In the long run, cotton prices have limited space.

In the short term, the factors restricting the space above the price should depend on the purchasing power of the enterprises.

"The announcement on the rotation of national cotton reserves has been known by the market at the annual cotton futures conference in mid March. The announcement of the policy is only a confirmation of the speculation in the previous market. The short supply of cotton reserves has basically been digested by the market.

In the long run, inventory pressure has been alleviated and has a neutral preference for prices.

Liu Yi, manager of MEIKO futures research department, said in an interview with reporters.

Some foreign businesses are "stable, accurate, and ruthless" to describe this national cotton store.

In particular, taking the price of the round out price and the CotlookA (real ICE futures) index "bundled" and adjusting it once a week, truly realize the linkage, linkage and combination of cotton prices inside and outside the country, which is conducive to maintaining the stability of cotton prices, enhancing the competitiveness of cotton textile export and the "marketization" of China's cotton industry.

"According to the policy announced by the state, the pricing method of the National Reserve has been determined. The average value of the CotlookA (real ICE futures) index and the domestic spot price index in the previous week were 50%, adjusted once a week.

The rotation time of 2015/16 is May 3rd, so the price of the round off refers to the price at home and abroad on April 25th -29, which is not yet available.

Liu Yi said in an interview with reporters.

Regarding the calculation method of throwing and storing prices, Yang Zhijiang, general manager of Shanghai Century Boulevard, merchants futures, said that for investors, they should try not to do more than the calculation of throwing and reserve prices.

According to the current domestic and foreign spot price situation, the domestic competitiveness will reach 12200 yuan / ton, and the competitive advantage will be gradually lost. The static judgement of 12200 yuan may be pressure.

"Fundamentally speaking, China's cotton production is decreasing, and the output of cotton reserves has become normalized, and the supply side pressure has weakened.

Domestic prices are falling, and the price advantage of imported cotton is also fading.

In terms of yarn, imported yarn has little profit except for combed yarn. The price of other cotton yarn has been upside down, and the price of chemical fiber is also rising.

In this way, the competitiveness of domestic cotton is enhanced and the supply pattern is changing, so we can watch more cotton. "

Analysis of reporters.

The policy of state-owned cotton storage and landing has been adjusted dynamically, and this has undoubtedly given the market a reassurance.

However, due to the decline in the quality of new cotton and the limited import of cotton, the market demand for high-grade cotton is relatively strong.

At present, the storage time of the national reservoir is 2-3 years, and the quality grade is less than 3.

At the same time, the market is not short of low priced cotton, so priority is given to import.

It is in line with market demand.

The industry believes that the current inventory of enterprises is not high, the downstream off-season, late replenishment needs, but will not release for a short time.

Therefore, it is not recommended for downstream enterprises to increase procurement volume.

It is understood that due to the continuous rise in cotton prices in China in 2011, and a record high, leading to a larger cost advantage of imported cotton, followed by the downward trend of the world economy, limited consumption, inventory backlog, cotton prices continued to fall.

However, in 2016, China's cotton price is close to the imported cotton price, the import profit is shrinking, and the domestic production and marketing gap has appeared, and the domestic stock is consumed.

In recent years, because of the continuous low innovation of cotton prices, who has large inventories and who lose money, many enterprises have reduced their inventories to a low level, which leads to serious shortage of inventory in the current industrial chain.

In the medium to long term, the current industry generally expects that the rhythm of stocking cotton will be less than 2 million tons, with a very small volume.

The impact is not very big.

"From the historical trend of cotton prices, at the beginning of the year, less than 10000 yuan / ton has been in the low price range of nearly ten years. High inventory, low consumption and high substitution are the main basis for low prices and short strategy.

However, if one Yang changes three views, the fundamentals will be pformed instantaneously, the price ratio is low, and the macro expectation is good, which can bring upward rebound.

But continuous inflation has great harm to the market and the formation of the industry. There have been physical enterprises that can not judge the future trend.

Ren Xinpu, vice president of Yongan Futures Research Institute, said in an interview with reporters.

Ren Xinpu said that this strong rebound is not necessarily a sign of rising price of spot cotton, and the production of textile enterprises should be arranged according to their product mix and market demand.

Order is the foundation, price and quality are the key, impulse is the scourge.

Ren Xinpu pointed out that half a month ago, in the Jiangsu and Zhejiang textile enterprises, the survey showed that the order quantity was different, the starting rate was large, the differentiated enterprises were higher, the conventional yarn enterprises were lower, the colored spun yarn was better, the white yarn was worse, the high count yarn was better, and the low count yarn was slightly worse.

In terms of business efficiency, pure cotton spinning, low count yarn and conventional varieties have little achievement, and high count yarn and colored spun yarn are better.