Domestic Cotton Production Is Insufficient And Reserves Should Be Kept Up.

In 2015/2016, the consumption of cotton in China by USDA was 7 million 400 thousand tons, and the author estimated 7 million 200 thousand tons according to the domestic demand and export changes in the downstream market. On this basis, the cotton demand in 2016/2017 was calculated.

In the first half of 2016, the export data of textile industry decreased by 1.6% compared with the same period last year, and domestic textile and clothing consumption increased by 6.94% over the same period. According to the calculation of the proportion of exports and domestic demand, the demand for yarn and cotton was affected by about 2.24% without considering the structural change factors, and the demand for cotton was increased by about 160 thousand tons with the same caliber.

Domestic cotton spot prices continued to rise this week.

domestic

In the short term, the trend of strong oscillation is still maintained.

Since April 2016, due to the low inventory and delayed storage of cotton in the industrial chain, the supply of cotton in China is in short supply.

New cotton will be listed in large quantities until October, in order to avoid the use of cotton shortage in September. In July 28th, the relevant ministries and commissions decided to postpone the sale of cotton reserves to September 30th, so as to ensure the normal operation of the textile industry.

As of September 14th, a total turnover of 2 million 300 thousand tons was achieved. By September 30th, the estimated total volume of cotton reserves was about 2 million 550 thousand tons, which could ensure that the cotton mills in the textile mill maintained large quantities of cotton in the new year.

Through the investigation of Xinjiang, Shandong, Hebei, Henan, Hubei and other places, the author expects that the output of Xinjiang will be 3 million 700 thousand tons in 2016/2017 and 800 thousand tons in the mainland, totaling 4 million 500 thousand tons.

Due to ample reserves and low domestic and foreign cotton prices, imported cotton is expected to be within 900 thousand tons.

Therefore, the author expects that the supply of domestic market (excluding reserve cotton) is 5 million 400 thousand tons.

From the above analysis, it is estimated that China's cotton demand will be 7 million 580 thousand tons, output and import volume of 5 million 400 thousand tons, and the gap of 2 million 180 thousand tons in 2016/2017.

In March 2016, the leaders of relevant ministries and commissions put forward "asymmetric storage" in relevant meetings. On the specific operation, they adopted "asymmetric rotation, first round and backward entry, multiple rounds and fewer rounds".

In terms of rotation, according to the asymmetric rotation mode, a small number of high quality cotton is pferred into the high quality cotton after the turn out, and the inventory structure is optimized. The rotation volume does not exceed 30% of the rotation volume.

Xiaobian thinks that the purpose of rotation is on the surface.

The demand for cotton reserves is actually to prevent new cotton from going to the market during the listing period.

The round off measures played a supporting role in ensuring that financial subsidies did not break the faith of the people.

From the author's survey of the north and South Xinjiang, the purchase price of seed cotton in the new year is 6.2 yuan / kg (the purchase price of seed cotton picked up by Xinjiang in September 29th has exceeded 7 yuan / kg), and the average price is much higher than that of the previous year's 5.5 yuan / kg.

In the new year, cotton price, subsidy target price and subsidy quota can be balanced, do not have the conditions of cotton rotation, and will not have an impact on the overall supply and demand pattern of the domestic market.

According to the state

Market monitoring system understands that recently, the main cotton area weather has a slight impact on cotton purchase.

Anhui and other places have affected the acquisition of rainfall; the recent rainy days in Jiangsu area have affected cotton picking; Xinjiang has suffered hail disasters and has a certain impact on output.

Xinjiang seed cotton purchase price has risen all the way, Akesu, Korla and other southern Xinjiang cotton seed purchase price has reached 7.4-7.5 yuan / kg (lint 40%), individual manufacturers and even seed cotton purchase price up to 7.9-8.0 yuan / kg.

In terms of technology, Zhengzhou cotton main contract (CF1701) is at a high level this week. The K-line touches down the brin rail line and tests the support force of the 60 day moving average.