India Cotton Prices Continue To Rise, New Year'S Planting Area Reduction

In the second quarter, the supply of high-grade cotton in India was tight, and the cotton supply in recent years was tight. India cotton prices rose steadily. The price of S-6 cotton ginning factory rose from 33000 rupees / candies to 63.40 cents / pounds at the end of March, up to 41500 rupees / candi, 78.5 cents / pound, and 15 months in three months, especially since June.

Because of India this year

The supply is decreasing, and the new flower will be listed at least until October, so India's domestic textile mills are actively replenishing their stocks.

At present, India textile mill has increased imports of African cotton for 7-8 months this year.

According to the India Cotton Association, because of the serious pests in the core cotton producing areas, the decline in cotton prices during the harvest period, and the good condition of Ji Fengyu this year, the cotton growers will be converted to sugarcane, peanuts and legumes. The cotton planting area of India in 2016/17 will drop to nearly seven years low, about 165 million mu, and the cotton planting area will be reduced by 7% compared with the same period last year.

India has been a major supplier of world cotton in the past few years. Now India has a tight supply situation in the domestic cotton market. Prices continue to rise. We need to reexamine the supply and demand of cotton in India.

If later

Cotton prices continue to rise and support for the formation of international cotton prices will not be underestimated.

Judging from the current economic situation, the domestic economic trend remained stable in the first two quarters, and the stock market remained basically stable.

On the international side, the Federal Reserve did not raise interest rates in June, and the possibility of raising interest rates in July is also not large.

International oil prices have maintained steady growth since January.

Therefore, judging from the overall environment, we can not determine whether the domestic economy is bottoming out, but at least the economy has not worsened.

Domestic market, domestic cotton in 2015/16

There is a gap. The high turnover ratio since the launch of the cotton reserve also shows that the enterprises are really short of cotton. The end of the cotton reserves at the end of August will be out of date, and there will be more than a month's gap from the new cotton market.

And because most of the cotton in Xinjiang is pported to the mainland, there is not much cotton left in the territory, and most of them are traders' hands. Therefore, the price is relatively high, and the price of cotton in the mainland has also formed a certain support. If the gap of cotton in Xinjiang later becomes larger, it may also lead to the cotton spot in the interior.

In terms of demand, import cotton yarn decreased year-on-year, which is a good thing for domestic cotton consumption. However, terminal demand is poor, especially in the off-season. There is a possibility of further deterioration of terminal demand.

However, we believe that the impact of downstream terminal demand on cotton consumption is not directly affected by the shortage of cotton supply, and the late weather will form a larger speculation factor.

Therefore, we expect that the price of zhengmian will remain strong in the shock before the new cotton goes public.