Cotton Planting Area To Reduce Supply Shortage, Prices Continue To Rise

Since April, cotton Futures rose sharply, Zheng cotton main contract 1701 hit 16000 yuan / ton pressure line. Reserve cotton The average spanaction price was 14671 yuan / ton on that day, up 413 yuan / ton compared with the previous day. Data show that after entering July, the daily turnover rate of cotton reserves is 100%. In spite of a slight increase in the daily storage capacity of the national cotton reserve in the past week, it has increased slightly compared with the first half of July, but the downstream demand has not yet been met, and the supply of cotton is in short supply. The continuous rise of cotton has already sent prices to cotton mills or even cloth factories. product Manufacturers also have plans to raise prices. However, affected by the downturn in downstream demand, the price increase is limited.

Reduction of planting area

Analysts pointed out that due to the reduction of production expectations, cotton business inventories at a low level, a new change in the policy of throwing and storage and other multiple factors, resulting in a substantial increase in cotton prices.

According to the research report, in 2016, the planting area in the mainland of China continued to decrease. According to the June report on the sowing area of cotton in China, the sowing area of cotton in the whole country was 43 million 851 thousand mu in 2016, a decrease of 7 million 337 thousand mu compared with that of the previous year, a decrease of 14.3%. Among them, the the Yellow River River Basin decreased by 24.7% compared to the same period last year, and the Yangtze River Basin decreased by 27.7% compared with the same period last year, and the northwest inland area decreased by 7% compared with the same period last year. However, the sowing area of the the Yellow River and Yangtze River areas in the main cotton producing areas of the mainland decreased again, which was partly affected by the inconsistency of planting subsidies (in 2015, the maximum subsidy per ton of cotton in the mainland was 2000 yuan, which was lower than the level of 4000 yuan / ton in Xinjiang). In terms of inventory, data show that cotton business inventories decreased significantly in May compared with the same period in 2015 in 2016.

According to the "arrangements for the national cotton reserve rotation" issued this year, under normal circumstances, the number of daily sales of reserve cotton is not more than 50 thousand tons, and the number of sales is appropriately increased according to the spanaction situation. Affected by multiple factors, the actual sales volume is far below the stipulated 50 thousand tons. Supply constraints have become an important reason for the sharp rise in cotton prices this round.

This year, the reserve price will continue to follow suit, and the rise of international cotton prices will push up the price of dumping and storage to a certain extent. This year, non production circulation enterprises will be allowed to participate in the auction of State Cotton stores, and the performance bond will be raised from 500 yuan / ton to 1000 yuan / ton.

Since the beginning of this year, the price of imported cotton yarn has been rising, and the price of foreign yarn is lower than that of internal yarns. With the increase of yarn price, the quantity and amount of imported cotton yarn both dropped. Customs statistics show that in January -5, cotton yarn imports amounted to 2 billion 30 million US dollars, down 26.6%. The high price of foreign yarn will promote cotton enterprises to turn to domestic cotton yarn, forming a demand for domestic cotton consumption, and forming a certain support for cotton prices.

Influence downstream conduction

Cotton prices are rising to the middle and lower reaches. Some traders said that the price of cotton yarn in some cotton mills C40S and below rose 400-500 yuan / ton, and some big factories even reported 800-1000 yuan / ton. However, downstream intermediaries and weaving mills are not strong enough to digest, and yarn prices are difficult to negotiate. In order to shift the risk of raw material costs, the hard rise has become a helpless move for cotton mills.

A textile listed company responsible person told reporters that affected by the rise in cotton prices, the company's downstream products now have certain price expectations. The situation of export products is more optimistic, which is affected by the devaluation of RMB, and the market competitiveness of export products is enhanced. Therefore, there is no price increase plan for export products at present. Domestic product prices are expected to be more determined, but the downstream demand is insufficient, the price increase is expected to be limited.

In addition, cotton prices have risen sharply, making the price of viscose products replaced by cotton. Sanyou chemical industry said that the price of mainstream products has reached 15200 yuan / ton, the price of last month was 13900 yuan / ton, and the price of high-end products was close to 15500 yuan / ton, the increase was obvious from last month.