Policy Decides The Direction Of Cotton Market Fluctuation.

Review of market industry in January and July

China's GDP in the two quarter was the same as the previous one, and the Chinese economy maintained a steady growth momentum in the two quarter.

In the first half of the year, the domestic economy faced complex domestic and international situations and sustained downward pressure on the economy. While expanding the total demand, we accelerated the structural reform of the supply side, and the national economy was running smoothly and steadily.

From the data point of view, the CPI of the whole country increased by 1.9% in June, or 0.1 percentage points lower than the previous month.

In June, the producer price of industrial producers fell by 0.2%, down 2.6% from the same period last year.

In the 1-6 month of 2016, the national real estate development investment amounted to 46631 billion yuan, an increase of 6.1% over the nominal period (after deducting the actual price growth by 8%), and the growth rate dropped 0.9 percentage points over that of 1-5 months.

In 1-6 months, China's import and export amounted to 17127 billion US dollars, down 8.7% from the same period last year.

Among them, exports amounted to 985 billion 500 million US dollars, down 7.7%, and imports of US $727 billion 200 million decreased by 10.2%.

July, the overall trend of commodities, agriculture

Basically maintain a weak trend.

The price trend is relatively strong.

Domestic cotton, supply side,

The auction was positive, the price increase continued to rise, the average price of the paction rose sharply, and maintained at over fifteen thousand in the near future.

Cotton production is expected to decrease in the new year, and new flowers in Xinjiang will grow well, and the mainland will be affected by heavy rainfall.

Demand side, cotton yarn sales prices rose, cotton fabric business rose, but terminal consumption is still poor, textile and garment exports continue to decline, it is expected that with the arrival of the peak season in September, the downstream situation will be slightly changed.

In the first ten days of July, Zheng cotton prices rose sharply, and domestic spot prices rose. Downstream cotton yarn and cotton grey cloth also gradually increased.

In the international market, USDA has raised the output of 2016/17 cotton in the United States. Meanwhile, it has cut down the output of India and Pakistan, raised cotton consumption in China, and lowered China's cotton stocks and global cotton stocks.

US cotton 2016/17 has a better contract volume in the year of 2015/16, and the contract progress is basically the same as in previous years.

India's tight spot supply and the reduction of cotton production in the new year have led to a sharp rise in cotton prices, which will play a supporting role in international cotton prices.

The price of ICE cotton rose sharply in July.

Two, the mainland suffered floods, and cotton growth was affected.

In June 2016, cotton growers' Cooperative Association of China Cotton Association and Xinjiang Huatai professional cooperative were surveyed on the growth of cotton seedlings in 2016 in 2751 households in 12 provinces in the mainland and 2751 in the autonomous region of Xinjiang.

The survey results showed that in June, most of the cotton in China was in bud and flowering stage. The occurrence of pests and diseases was generally light. The meteorological conditions in the northwest inland cotton region and the the Yellow River River Basin cotton area were better, which was conducive to the growth and development of cotton.

Since the sowing of cotton, some cotton areas have been suffering from meteorological disasters such as rainstorm, hail, drought and dust.

According to the weighted average of cotton planting area of cotton farmers surveyed, the area of cotton planting in the whole country was 41 million 296 thousand mu, and the same caliber decreased by 10.1%.

By the end of June, the rate of cotton buds in the whole country was 83.85%, 10.3 percentage points faster than that of the same period last year, and the incidence of pests and diseases was generally lighter. Among them, the disease was lighter, accounting for 67.63%, an increase of 1 percentage points compared with the same period last year, and 50.51% of the less insect pests, 14.9 percentage points lower than the same period last year.

Since June, most of the cotton in Xinjiang is in bud to flowering stage, which is about 5 days later than usual. The growth period of cotton in southern Xinjiang is 2-5 days earlier than that of last year, or some of them have already bloomed, while the northern Xinjiang is 5-10 days later than last year. Only a few cotton fields with better management have realized the goal of flowering in June.

The incidence of disease in Xinjiang was relatively low this year. The surveyed households accounted for 76% of the disease, which was 6.73 percentage points higher than that of the same period last year. In June, as the temperature increased, the incidence of insect pests increased, and the survey showed that the number of pests was 44.7%, which was 37.4 percentage points higher than that of the same period last year.

In late June, due to the higher temperature in some parts of the southern part of Xinjiang and the widespread hail weather in the northern part of Xinjiang, the cotton growth was affected to a certain extent. The overall seedling condition was worse than that of the same period last year. The seedlings accounted for 23.20% of the total survey households, down 46.83 percentage points from the same period last year, and the poor seedlings accounted for 48.70%, an increase of 35.14 percentage points over the same period last year.

According to the principle of "time to unequal branches and branches to different times", the topping work has been started in late June and early July. Due to the influence of early weather on cotton growth, cotton growers need to invest more in management and fertilizer, and the cost of cotton planting will increase.

In June, cotton fields in the the Yellow River river basin generally entered the bud stage, and a few entered the initial flowering stage, and the growth was better than that in the Yangtze River Basin. The precipitation in most cotton areas was much higher than that in the same period of the year. The light and temperature were suitable and the soil moisture content was good. The drought in cotton fields in Hebei and other places was alleviated earlier, and the cotton growth period was earlier than that in the same period.

As of June 30th, the percentage of households surveyed was 77%, an increase of 2 percentage points over the same period.

The disease is lighter, but slightly heavier than last year, the surveyed households considered that the disease was heavier, accounting for 3.4%, an increase of 1 percentage points compared with the same period last year, and a small amount of root rot disease occurred. The occurrence of insect pests was similar to that of last year. It was considered that the occurrence of insect pests was heavier, accounting for 15%, mainly aphids and bug bugs.

The overall growth of cotton is obviously better than that of last year. The growth rate was 43.67%, which increased by 20 percentage points compared with the same period last year. However, in some parts of Hebei, Shandong, Henan, the cotton growth was slow, the buds grew later and the growth was generally affected by drought. Besides, some parts of Shandong, Shanxi and Shaanxi were also affected by hail.

Waterlogging and flood disasters, heavy rain caused the cotton bud to fall off, the leaves were yellow, affecting the late yield formation, and some of the flooding time was too long, and even the phenomenon of dead seedlings was found. The cotton growth was slow, the growth period was delayed, and the emergence time was later than the same period last year. As of the end of June, the rate of buds in the surveyed households was 67%, which was 10.26 percentage points lower than that of the same period last year. At present, there are few cotton plants in the bud and the flowers are blooming. At the same time, under the influence of rainy weather, the aphid bug is more serious, the snail damage is heavier, the insect pest is heavier, which accounts for 24.89%, an increase of 6 percentage points compared with that of the previous year. The incidence of serious diseases is relatively low, and the incidence of serious diseases is 14.21%. The heavy rainfall process in the Yangtze River Basin is frequent, and the precipitation process is heavy and the rainstorm is affected widely.

The overall growth of cotton was worse than that of last year. The growth rate was 63.76%, up 9 percentage points from the same period last year. The growth rate was only 12.48%, which was 18 percentage points lower than the same period last year.

In addition, wheat stubble cotton and late rape cotton were delayed by the weather, and are still at the slow seedling stage, with four to five true leaves.

After entering the July, the Yangtze River Basin was severely flooded, and Hubei, Hunan, Anhui and Jiangsu were successively affected. After that, the storm moved northward and the floods in Hebei were also serious.

Because the amount of cotton planted in the mainland is low, and most of the affected areas in Hubei are not in the cotton area, the impact is not great. However, the cotton in Anhui is greatly affected by the disaster. It is expected that the yield and quality will be affected in the later stage.

Due to the fact that the local cotton has not entered the boll opening period in Hebei area, only some of the buds are damaged, and some buds appear to fall off.

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Three, business inventories are low, and reserve cotton is highly competitive.

Starting from May, the auction of enterprises has high enthusiasm, fierce competition and high turnover rate.

Because of the low inventory of raw materials and strong willingness to replenish the stores, the rotation of reserve cotton has made the market available for replenishment, while the turnover of commodity cotton turnover is still decreasing.

The Logistics Association of China Cotton Association has investigated the inventory of 178 warehouse members in 18 provinces and cities nationwide. By the end of June, the turnover of commodity cotton turnover was 497 thousand and 700 tons (including 180 thousand and 200 tons in the inland bank and 317 thousand and 500 tons in the Xinjiang Library), including new cotton and Chen Mian, a decrease of 235 thousand and 500 tons, a decrease of 32% over the previous month.

The total turnover of cotton in Xinjiang cotton is 421 thousand and 800 tons, accounting for 84.8% of total imports, 13% of imported cotton and 2.2% of real cotton.

Accordingly, the total inventory of cotton turnover in the whole country was 507 thousand and 200 tons, a decrease of 240 thousand tons from the previous month.

Since the launch of the cotton reserve in May 3rd, the proportion of cotton reserves has continued to be high. The proportion of imported cotton has reached 100%, and the proportion of domestic cotton has also reached a turnover rate of 98.26%.

Since the end of June, textile enterprises competitive auction reserve cotton price increases actively, and the proportion of reserve cotton paction is maintained at 100%, the paction price of reserve cotton is gradually rising, and the average price of reserve cotton paction still remains above fifteen thousand.

According to statistics, as of July 22nd, the total turnover of the reserve cotton wheel was 1 million 477 thousand and 100 tons, the total volume of imported cotton was 296 thousand and 300 tons, and the total volume of domestic cotton was 1 million 180 thousand and 800 tons.

According to the total amount of 2 million tons, the resources listed in the last twenty-seven working days can only be about 500 thousand tons, and the amount of listed resources will be less than 20 thousand tons. But up to now, there is no reduction in the quantity of cotton reserves listed. If the amount of 500 thousand tons per day is listed, the amount of reserve cotton will be increased by 300 thousand tons by the end of August.

As a result of this round, traders, ginning mills and warehouses can participate in the auction. Enterprises have increased their prices actively. Many textile enterprises complain that because of the participation of traders, the paction price of reserve cotton is increasing. The textile association also appeals to increase the supply of reserve cotton and extend the time of delivery.

The previous policy is that the current round of reserves will not exceed 2 million tons of cotton production. The end time will be August 31st. But from the current cotton resources listed daily, the increase in the amount of late cotton reserves will become a big probability event.

Four. Import cotton keeps low, Australia cotton comes to Hong Kong in large quantities.

With the reduction of cotton price difference inside and outside and the auction of nearly 300 thousand tons of imported cotton in reserve cotton, China's imports of cotton have been greatly reduced since 2016.

According to customs statistics, in June 2016, China imported 72 thousand and 500 tons of cotton, a decrease of 5 thousand and 800 tons, a decrease of 7.36%, a decrease of 88 thousand and 800 tons and a reduction of 55.06% compared with the same period last year. In 2016, China's total import of cotton 430 thousand and 200 tons, down 502 thousand and 800 tons, or 53.89%%.

In September 2015 -2016 June, China imported 795 thousand and 900 tons of cotton, a decrease of 698 thousand and 500 tons compared with that of the previous year, a decrease of 46.74%.

Since June, with the large number of Australian cotton coming to Hong Kong, the quantity of cotton in port and Macao has increased, and the price is relatively strong.

As the price linkage between cotton and domestic products increased, the price difference between domestic and foreign cotton basically remained at a stable interval. Therefore, imported cotton will continue to maintain a lower import volume in the coming months.

Five, demographic dividend will disappear, textile and garment export reduction will become the norm.

Because of the poor international economic environment and the downward pressure on China's domestic economy and the high labor cost, China's foreign trade situation is relatively poor. Similarly, as one of the main products of China's exports, textile and clothing exports also face greater pressure.

In the 1-6 month of 2016, China exported 125 billion 30 million US dollars of textile and clothing, a decrease of 2.63% compared with the same period last year, of which 52 billion 443 million US dollars in export textiles, a decrease of 0.91% compared with the same period last year, and export garments 72 billion 588 million US dollars, down 3.83% from the same period last year.

According to the latest data from the General Administration of customs, China exported about 24 billion 14 million US dollars in textile and apparel products in June, a decrease of 5.27% over the same period last year, of which exports of textiles, yarns, fabrics and articles were US $9 billion 118 million, a decrease of 3.70% compared to the same period last year. The export garments and accessories were US $14 billion 896 million, a decrease of 6.21% over the same period last year.

With the large number of industries in China and the relatively complete industrial chain, it is difficult for individual countries to replace China's position in the textile and apparel industry in the short term.

However, as China's demographic dividend has disappeared, the textile and garment industry, which is highly concentrated in labor force, has been greatly affected.

With the rapid development of textile and garment industry in other Southeast Asian countries, China's orders will gradually shift to these countries, and the reduction of textile and garment exports will become the norm in the future.

Six, the price of cotton yarn has risen sharply, and the price of imported yarn has soared.

As domestic cotton prices rose sharply, the price of domestic cotton yarn began to raise the price after the cotton rose. The price rose from the previous exploratory increase to the present sharp rise. Especially from late June to now, the price of cotton yarn has increased to 3000 yuan / ton.

However, as cotton prices have risen even more, cotton yarn prices have risen, textile companies' profits are still bad, and even enterprises with bad raw material control will lose money.

However, from the current overall situation, the rally is gradually being pferred from the current cotton yarn to the downstream cotton grey fabric, and the price of cotton fabric has also started to rise.

With regard to imports of cotton yarn, cotton prices rose sharply as cotton prices rose sharply in India. The price of cotton yarn in India, Pakistan and Vietnam also rose. The price of India C32 cotton yarn reached 24000, and the volume was very low. The price of cheap Vietnamese cotton yarn was set at the end of August.

According to the statistics of the General Administration of customs, the import of cotton yarn in China was about 159 thousand and 300 tons in June, a decrease of 17.67% compared with the same period last year, and a decrease of 6.8% in the ring ratio.

In 1-6 months, 962 thousand and 900 tons of imported cotton yarn were imported, representing a decrease of 18.68% over the same period last year.

2015/16 (2015.9-2016.6) accumulated 1 million 700 thousand and 800 tons of imported cotton yarn, a decrease of 10.54% over the same period last year.

With the rising international cotton prices, we expect the advantage of imported cotton yarn will gradually decrease, so we speculate that the import of cotton yarn will be between 150-190 tons in 2016.

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Seven. Cotton survey of major cotton producing countries in the world

1, global cotton stocks continue to decline, China's stock reduction.

The 2016/17 balance sheet change announced in July: cotton production in India decreased by 109 thousand tons to 5 million 987 thousand tons, and cotton production in the United States increased significantly from 218 thousand tons to 3 million 440 thousand tons, and cotton production in Pakistan decreased by 218 thousand tons to 1 million 742 thousand tons, and global cotton production decreased 135 thousand tons to 22 million 327 thousand tons.

China's cotton production has been raised by 326 thousand tons to 7 million 620 thousand tons, India's cotton consumption has been reduced by 55 thousand tons to 5 million 225 thousand tons, Pakistan's cotton consumption has been reduced by 54 thousand tons to 2 million 232 thousand tons, and the global cotton consumption has increased 220 thousand tons to 24 million 297 thousand tons.

South Korea's imports of cotton increased 153 thousand tons to 523 thousand tons.

US exports of cotton increased 21.8 to 2 million 504 thousand tons.

China's cotton stocks have dropped sharply from 654 thousand tons to 11 million 255 thousand tons, while US cotton stocks have dropped 4.3 to 1 million 2 thousand tons, and global stocks have dropped by 749 thousand tons to 19 million 876 thousand tons.

This report mainly raised the output of US cotton, cut down the output of India and Pakistan, raised cotton consumption in China, and sharply reduced China and global cotton stocks.

2. The planting area of the United States and cotton increased greatly, and the new flower rose well.

At the end of June, the United States Department of agriculture again announced the 2016 cotton planting area in the United States. The estimated cotton planting area is 10 million 23 thousand acres, an increase of 4.8% from 956.2 in March, and a significant increase from 2015 to 16.8%.

Among them, the planting area of upland cotton is about 9 million 820 thousand acres, an increase of 17% over the same period last year, and the planting area of Pima cotton is about 199 thousand acres, an increase of 26% over the same period last year.

Due to the increase in the planting area and the growth of new cotton so far, USDA has raised the cotton production again in the 7 monthly report.

Judging from the current weather conditions in the United States, rainfall and temperature are favorable for cotton growth this year. The new flower buds rate is high and the overall seedling condition is good.

As of July 17th, the rate of new flower buds was 77%, an increase of 20 percentage points from the previous week, 72% in the same period last year and an average of 76% in the past five years.

The rate of new flower bells was 28%, an increase of 9 percentage points from the previous week, 29% in the same period last year, and 30% in the past five years.

The excellent and good rate of cotton growth was 54%, which was 54% last week, compared with 57% last year.

Judging from the current planting situation, if the weather does not show extreme weather this year, the output of American cotton will increase.

With the global cotton prices soaring, especially in India and Pakistan, cotton prices have gone up, and the sales progress of the US cotton has also been followed up quickly. Vietnam, India and Pakistan have increased the purchase amount to the US cotton.

China's cotton prices also rose sharply, and began to increase the purchase of US cotton.

According to USDA statistics, as of the week of July 14th, the United States signed a total of 2 million 38 thousand and 600 tons of Upland Cotton in the 2015/16 year, down 18% from the same period last year, and shipped 1 million 797 thousand and 600 tons. The signing progress of the United States land cotton was 107%, the average value of 5 years was 107%, the shipment schedule was 94%, the average value of 5 years was 97%, and the total number of land cotton was 508 thousand and 300 tons per year when Zhou Meiguo signed the contract, which increased by 24.6% over the same period last year.

3, cotton prices continue to skyrocket in India, and cotton stocks are low at the end of the year.

In July, cotton prices continued to soared in India. As of July 20th, the price of S-6 cotton mill's delivery price was 47250 rupees / candi, which was 90 cents / pound.

Because of the low domestic cotton stocks and the new flower market going to the end of October and the beginning of November, textile enterprises began to import large quantities of cotton, Australian cotton and West African cotton.

In addition, the new cotton planting area in India is expected to decrease in the new year and the sowing time is lagging behind, which also supports the sharp rise in cotton prices in India.

According to the 2015/16 annual forecast of supply and demand issued by India Cotton Advisory Committee, cotton production in 2015/16 decreased by 1 million 400 thousand packages (238 thousand tons) to 33 million 800 thousand packages (5 million 746 thousand tons).

Exports decreased by 200 thousand packages (34 thousand tons) to 6 million 800 thousand packages (1 million 156 thousand tons); imports increased by 400 thousand packages (68 thousand tons) to 1 million 500 thousand packages (255 thousand tons); consumption was reduced by 200 thousand packets (34 thousand tons) to 30 million 800 thousand packets (30 million 800 thousand tons).

In addition, the amount of cotton pferred to 2015/16 has been adjusted by an increase of 800 thousand packages (136 thousand tons) to 6 million 600 thousand packages (1 million 122 thousand tons).

As a result, although the supply decreased from last year's forecast, the final inventory was increased to 4 million 300 thousand packages (731 thousand tons).

By July 14th, the amount of seed cotton listed in India for 2015/16 has reached 33 million 325 thousand packs (5 million 665 thousand and 300 tons). According to Cotlook estimates, all new flowers in 2015/16 have been listed.

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.

Eight. Summary and operation suggestion.

From a global perspective, Britain's European Union, Turkey coup, France's repeated terrorist attacks, Italy bank's debts and other issues are frequent. The unstable factors of international politics are increasing, and the European economy is also facing a huge test.

At present, the relatively good economy is also in the US market, but in this international environment it is expected that its interest rate will be pushed back.

Domestic market, the domestic real estate in the first two quarters has substantially increased our GDP, the overall economic data has not seen a big decline, but the foreign trade and investment situation is not good. In the second half of the year, we can hardly imagine the new bright spot for GDP growth.

We still have a wait-and-see attitude towards the domestic economic situation in the second half of the year.

Speaking from the fundamentals of international cotton, cotton production in 2016/17 has increased, but global cotton stocks have been substantially reduced.

The international cotton prices have gone up, and cotton prices in India have gone up. India and Pakistan have begun to increase the amount of cotton bought in the United States, which has formed a certain support for the international cotton industry.

Later, the international cotton trend is expected to be strong.

The domestic cotton market is still a policy market.

If the reserve policy remains unchanged, the listed resources will not exceed 2 million tons, and there will be a gap in the domestic cotton supply in 2015/16. Cotton reserves will end at the end of August, and there will be a two month short period from the listing of Xinjiang cotton. The textile enterprises need to prepare stocks ahead of time, so it is expected that the latter will still be hot.

However, in view of the current listing of cotton reserves, the late increase is a matter of great probability. If the reserve cotton policy is only to increase the volume and maintain 30 thousand tons per day, and it is still the end of the auction in August 31st, the quantity of cotton reserves will increase by more than 300 thousand tons. For the market, it is only a short-term profit and interest. In the long run, even if it can meet the shortfall of the new flower listing, the new cotton market will not have a low price.

If reserve cotton is not only postponed, but the spinning enterprises will not worry about the supply of cotton. A large number of traders will gradually enter the market and cotton will weaken.