State Reserve Cotton Is Still The Main Force To Make Up The Gap Of Market Supply.

In recent years, influenced by policy factors, the supply pattern of domestic cotton market has shown some changes, and the overall supply of new products is tight.

Li Jing, a cotton analyst at Hua Rui, told an International Commercial Daily reporter that in recent 3 years, cotton demand in China has basically maintained at a scale of about 7 million tons, and this year's output of new cotton is expected to be around 4 million 700 thousand tons, and the demand gap exceeds 2 million tons.

In 2014, with the termination of cotton purchase and storage policy and the start of direct subsidy policy, cotton growers, especially the policy income of cotton farmers in the inland areas except Xinjiang, were greatly reduced, and the overall planting area of cotton declined, and the new supply decreased significantly.

On the import side, with the end of the domestic purchasing and storage policy, domestic cotton price support disappeared, domestic and foreign cotton price differential narrowed, import cotton price advantage weakened, import volume fell, bonded area

Also slipped to a low level.

At the same time, cotton import quota has basically maintained at a low level of 894 thousand tons in recent years, and the limited import volume is difficult to make up for the huge market gap.

In the case of reduced supply, market demand has steadily increased.

Li Jing pointed out that textile and garment exports have improved since the beginning of this year, and downstream demand has gone up.

In addition, in recent years, the spot price of cotton has been lowered to a low level, which has created favorable conditions for the profit growth of cotton textile processing enterprises, and the production enthusiasm of the enterprises is relatively high.

From a comprehensive perspective, whether from the supply side or from the demand level, before the new cotton market, cotton market supply volume should rely more on the national cotton storage.

Analysis of the Zhengzhou commodity futures exchange's national cotton and cotton daily report shows that since the launch of the national cotton store in May 3rd, the market has continued to sell at a high level.

In the month of May, the national cotton store kept a high turnover rate of over 97%.

By the end of May, 300 thousand tons of imported cotton had been put into operation.

Since June, all the national cotton stores have been put into domestic cotton.

Turnover and

There are also some fluctuations, but turnover is still at a high level.

On the one hand, there is no more replenishment options on the market; on the other hand, the dumping price is more advantageous than the spot price, and this round of the national cotton storage and delivery rules is later identified. In the traditional demand season of April and May, the market kept digesting the limited stock, and the expectation of the national cotton storage and investment continued to enlarge, which also contributed to the high turnover of the national cotton store.

Analysts pointed out that, in addition to rigid demand, this year's new changes in the national cotton storage policy is also conducive to active market pactions.

"This year, there are many differences between the cotton throwing and storing policy and previous years."

Li Zhenhua, a senior analyst at Hua Rui information, pointed out that the sale price of the national cotton store was linked to the spot price of cotton at home and abroad, the sales way of small bundles and the 100% cotton inspection (quality index package inspection, weight index batch inspection), allowing traders to participate directly in the auction, and the early import of cotton accounted for a relatively high level, which is conducive to market pactions.