The Rise And Fall Of Cotton Prices Made Textile Enterprises At A Loss.

Since the beginning of this year, the new cotton in China has been consuming more rapidly in 3 and April due to the delay in the beginning of the dumping and storage and the increase in the downstream demand caused by the narrowing of the cotton price between inside and outside.

Subsequently, affected by factors such as the difficulty of initial storage and slow speed of public inspection, the supply of domestic cotton spot market is relatively tight, and the auction price of cotton reserves is obvious, and spot prices are rising rapidly, and the operation of textile enterprises is under greater pressure.

The rapid rise in cotton prices has forced the policy to come out, and the market has raised the voice of prolonging the throwing and storing time. The futures market has responded in advance.

The average bid price of the cotton auction reached the highest level of 15474 yuan / ton, and the turnover rate of the cotton reserve began to fall below 100% in July 29th.

In the next few days, the average price of the paction went down all the way. At present, it is stable at 13800 yuan / ton, down 600 yuan / ton compared with the previous high point, and the turnover rate has dropped significantly, and it has been maintained at 50% to 60% in the near future.

The rise and fall of cotton prices made textile enterprises at a loss, which is the main reason for the recent decline in the auction rate of cotton reserves.

In fact, many textile enterprises do not have much stock of cotton at present, and it is a rational choice for them to purchase national cotton reserves on demand.

However, because the base price of reserve cotton is still relatively high, it is 14389 yuan / ton, the average price of the national cotton store is about 13800 yuan / ton, and the risk of depreciation is still large, so textile enterprises do not dare to buy large quantities.

To solve this problem, the benchmark price of the selling of national cotton stores needs to be moved down obviously, making the cost of national cotton storage to reach the safe area, and the turnover rate will rise again.

However, the benchmark price of the national cotton sale has not been significantly moved down, which limits the turnover rate to rise.

But as time goes on, the benchmark price will keep pace with the pace of the market, and textile enterprises should re enter the market.

On the other hand, early participation

The highly active traders are facing big choices.

Traders allowed market entry this year, coupled with market cooperation, traders took an active part in market auctions on the basis of their favorable market prospects, accounting for about 50% of their previous pactions.

However, due to the prolonged selling time of the cotton reserves, the current market will be more nervous about the supply of cotton market in the 9 and October years.

In addition, based on the future, whether traders should continue to participate in the auction is also a matter to consider.

I believe that the views of traders have been divided, and the enthusiasm of participating in the auction of cotton reserves will be significantly reduced.

Judging from the supply and demand situation in the domestic market, after the delay of dumping and storage,

The supply will be shifted from the pre expansion to a partial easing.

According to the statistics of China cotton information network as at the end of July, 727 thousand and 500 tons of commercial stocks, 597 thousand and 300 tons of industrial stocks, and 178 thousand tons of throwing reserves since August, totaling 1 million 503 thousand and 100 tons.

From 8 to October, there were other supplies, mainly throwing and importing cotton.

Due to the low turnover rate of the national cotton store auction, the turnover rate will rise after the reduction of the base price of the latter cotton reserves. We calculated the daily turnover of 20 thousand tons in August, and calculated the turnover of 30 thousand tons per day in September. In the later stage, we could also turn out 920 thousand tons of cotton reserves.

In terms of imports, 430 thousand tons of cotton have been imported, and 210 thousand tons in total from 8 to October, according to the import volume of 70 thousand tons per month.

The total supply in the late period is 2 million 633 thousand tons.

The monthly demand is calculated according to 600 thousand tons, and the total demand in three months is 1 million 800 thousand tons. The remaining 833 thousand tons can be used as necessary industrial and commercial stocks.

Therefore, the author believes that in the current case of postponed storage, the market is worried about the supply of "green" is difficult to emerge.

Cotton planting area continued to decrease in 2016/2017, especially in the mainland.

In terms of weather, the Xinjiang area is relatively suitable, and there will be a marked increase in the unit area yield.

The impact is worse than last year.

The market expects domestic cotton output to be 4 million 500 thousand tons, a further decrease of 100 thousand tons compared with last year.

Import quotas will continue to be strictly controlled and import is expected to be 900 thousand tons.

Consumption expectations are maintained at a scale of 600 thousand tons per month, totaling 7 million 200 thousand tons per year.

In summary, in 2016/2017, cotton gap is estimated to be 1 million 800 thousand tons, which can be replenished by national cotton reserves.

Moreover, the new year's auction of national cotton storage and sale will be more suitable for the market, and there will be no supply shortage.

However, there is also the expectation that the state will turn in reserve cotton.

However, in the current situation of insufficient supply in the domestic market, the introduction of the policy of entry will be more cautious.