The Soaring Cotton Price Has Made The Downstream Textile Enterprises Fall Into The "No Rice Pot" Situation.

Soaring cotton prices to the downstream

Enterprises feel pressure and fall into the "no rice pot" situation.

Cotton prices sit on the "helicopter"

"After the replacement of new and old cotton, the cost of cotton production in textile enterprises increased by more than 2000 yuan / ton compared with August."

Li Jifeng, Secretary General of Henan Textile Industry Association, recently revealed that Xinjiang hand picked.

The quoted price has exceeded 16 thousand yuan / ton, and the price of Xinjiang machine picked cotton has reached 15 thousand and 500 yuan / ton.

According to the relevant inspection data, the purchase price of seed cotton in southern Xinjiang is about 7.6 yuan / kg, and the highest purchase price in Akesu, Kuche and Yuli is 8 yuan / kg.

Driven by the cotton price in Xinjiang, the price of seed cotton in the the Yellow River valley also reached 7.3 yuan / kg during the national day, which was 0.15 yuan / kg higher than that before the national holiday.

In terms of futures market, Zheng cotton's main contract CF1701 was up to 15 thousand and 700 yuan / ton, compared with 12 thousand yuan / ton in the same period last year, or more than 30%.

In the view of Sun Kuanghua, a cotton analyst at the business association, Xinjiang cotton is listed late this year, in Xinjiang.

When it was about to be listed, there was a rainy and windy season, which caused cotton growth to be affected. This is the main reason for the soaring cotton prices in Xinjiang.

It is understood that this year, the southern Xinjiang area is rainy and windy, and the hail disaster in Korla area of Xinjiang has been encountered recently. The National Meteorological Center recently predicted that this year, the total output of cotton was 5 million 96 thousand tons, and the decline was 9.1%.

The cotton picking and hand picking cotton market has been postponed for 7-10 days compared with the previous years. After the end of the cotton spinning, there was a short "empty window period" in the market cotton supply.

Imbalance between supply and demand

In addition to weather factors, the soaring price of cotton prices is also caused by the imbalance between supply and demand.

In the interview, the reporter learned that at present, the cotton in the commercial circulation area is relatively small, and the national storage cotton is the biggest supplementary source.

However, the storage speed of national cotton stores is as slow as that of squeezing toothpaste, and the quantity is insufficient, which has further led to the loot of cotton by textile enterprises, thus further pushing up the price of cotton.

"Because the textile enterprises and traders have a certain panic on the supply of Xinjiang cotton market, there is a rush to buy Xinjiang cotton during the national day."

In an interview with reporters, Sun Kuanghua said that since the beginning of this year, the cotton access channel has been opened, and cotton farmers' psychological expectations for new cotton prices are higher.

At the same time, the cost of seed cotton increased by 5%-8% over the past year. In addition, there was a shortage of labour in Xinjiang this year. The cost of picking up flowers increased indirectly by picking up flower workers from the mainland.

At the same time, it is also related to the quota restrictions of cotton imports in China.

It is understood that the domestic cotton allocation is 892 thousand tons. When the cotton in the international market does not come in and the cotton resources in the domestic commercial circulation are relatively few, there will be a tense situation when the textile enterprises purchase cotton.

At that time, national cotton reserves became the main supplementary channel for cotton in the domestic market.

According to insiders from China Cotton Trade Association, there is no problem with the reserve cotton system itself. Maybe it just deviate when the system is implemented.

For example, the system plans to put in 50 thousand tons of cotton per day. If it does not increase, it will continue to increase, but at present, less than 30 thousand tons can be put into operation every day, sometimes even down to 10 thousand tons.

In addition, when the storehouse is closed, the efficiency of the storehouse will be low due to the limitation of site and manpower.

In addition, according to the reporter's understanding, the continuous reduction of cotton production is also an important reason for the rise of cotton prices.

According to the survey report on cotton sown area issued by relevant departments recently, in 2016, the actual sowing area of cotton in China was 43 million 851 thousand mu, 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.

In the main cotton producing areas of the mainland, the sowing area of the Yellow River and the Yangtze River Valley decreased again.

Shutdown crisis

At present, new cotton has become a "relief grain" for textile enterprises to continue production. However, the soaring price of cotton in Xinjiang has made textile enterprises feel pressure.

It is understood that the textile enterprises that are threatened by "grain loss" are facing a crisis of shutdown.

"At present, the Henan Nanyang Xinye area is the hardest hit area, with a starting rate of only 20%. In Shangqiu Xiayi County, the textile enterprises generally operate at a rate of only 50%."

The person in charge of a cotton industry Co., Ltd. in Henan told the media recently.

At present, many textile enterprises start to rely on hoarding cotton production, and as for the textile enterprises with zero inventory, they have to stop working and wait and see.

It is worth mentioning that the intention of the domestic textile enterprises to stop production is not only in the near future, but in a few months before the national day, a famous textile enterprise in Hubei has already been shut down. Many textile enterprises in Hebei and Shandong are also planning a downtime plan.

For the current high price in the cotton market, some people in the industry have proposed a double track system for cotton supply.

The so-called double track system is to put the increment of national cotton reserves and the new cotton into the market at the same time, forming a dual track system to solve the problem of excessive cotton prices.

For this statement, Zheng Bo, an analyst with information cotton industry, told reporters that the feasibility of dual track cotton supply is not high.

Although there are 7 million tons of stock in the State Cotton store, if a large number of them invest in the market, they will not only cause a big drop in cotton prices but also harm the interests of cotton farmers.

Sun Kuanghua believes that the dual track system is the double track operation of purchasing and storing and throwing reserve prices. The dual track system of cotton is a way of national macroeconomic regulation and control. Its purpose is to safeguard the common interests of cotton farmers and downstream textile enterprises, and the national finance is the only way to put into practice in a special period.

This also means that the dual track system can boost the market in the short term, but in the long run, it is not good for the downstream market to develop healthily.

According to the reporter's understanding, even if the national cotton store is put into production, it is difficult for the crazy cotton price to have a downward trend.

In May of this year, after the long-awaited reserve cotton was put into the domestic textile enterprises, the trend of high cotton prices in the market was not restrained, but the price became more and more crazy.

Data show that since the national cotton storage and storage, the national cotton warehouse outbound turnover rate of more than 98%, the price from 12428 yuan / ton rushed to the highest paction price in July 28th 16350 yuan / ton, or more than 30%.

The high price of national cotton and the rising of spot lint increased the price of lint from about 11000/ tons in the early April to about 15000 yuan / ton, a total gain of about 35%.

Earlier, during the auction of state cotton and cotton, many textile enterprises were responsible for issuing "no buy, stop production and buy bankruptcy".