Cotton Policy: Target Price Itself Should Be A Pitional Policy.

The cotton target price reform in Xinjiang has been settled after three years of trial. What we can see is that the target price subsidy system has realized the separation of premium and price, and the price at home and abroad is in line with the market, and the market plays a decisive role in the allocation of resources.

Under the influence of market mechanism, domestic cotton prices rebounded after April this year, protecting the interests of cotton farmers.

We also see that the target price itself should be a pitional policy, through the pilot of target price, let cotton prices gradually move towards the market, so that the market can supply and grow cotton, which is the ultimate goal of supply side reform.

The marked rise in cotton prices has left the nation's cotton processing and circulation enterprises and textile enterprises at a loss.

In addition to processing enterprises and cotton farmers, there are also some futures investors in the cotton market, making the cotton market full of uncertainty.

Reporter: what is your starting rate now?

Li Wang: it was 24 hours ago. Now it's only one class, 12 hours, 7 days, and it still stops for one or two days.

Li Wang, chairman of Akesu Tianquan cotton Co. Ltd., looked tired and helpless. The more than 41000 square factory now stores more than 2000 tons of seed cotton. These stocks have been stored for a month.

Reporter: lint sales do not go out, what is the reason?

Li net: maybe the downstream textile mills have not yet raised their prices. The yarn is up and up, and our cotton is up normal. Now it is abnormal.

Reporter: is it the quantity that is not bought, or is the price being depressed, that is, the lint purchased by the textile mill?

Li Wang: the price of the textile mill is low. It is too high and its yarn has not been dropped. It is the reason why it is not easy to sell.

The price of the yarn did not rise, and the lint was very strong. I started selling it from the first batch of 14 thousand sold, and sold at the highest time 16 thousand, a ton increased by 2000 yuan, and the spinning mill could not bear it.

In addition, cotton as a staple commodity, affected by news and policy. In this process, some traders took part in the auction, raising the price of cotton, so that the cotton reserves did not achieve a good effect on stabilizing cotton prices.

Wu Qiping, general manager of Akesu Luen FA Textile Co., Ltd.:

Wu Qiping: the state has also done some work. Basically, this year's reserve cotton can basically guarantee our production, and say that we can get some profits.

If there is no reserve cotton put out, this year's cotton mill can not survive.

This year, due to a wave of upside down of futures and reserve cotton, some trading companies use cotton reserves and futures to synchronize, and hedging, including arbitrage, must have done some speculation.

Some traders have been frying cotton in the middle or doing some regulation. Some trading companies have made a lot of money this year.

As everyone knows,

Since the implementation of the target price subsidy system in cotton market, the acquisition of cotton has been completely liberalized. Under market conditions, the decision to purchase cotton price is the relationship between supply and demand.

Dai Gongxing, President of China Cotton Association, said: China's cotton pattern is oversupply.

Dai Gong Xing: first, there are about 10000000 tons of cotton in storage.

Price is determined by supply and demand in the market, and now the whole situation is oversupply.

Second we need to import more than eight hundred ninety thousand tons of cotton per year. This is a must.

Because we joined the WTO at that time, we promised to put eight hundred and ninety thousand tons of quotas per year.

Third the quality of some domestic cotton in China can not meet those high-end ones.

Demand.

Why does it appear that China's cotton purchase price is high or even higher than that of the international market? Dai Gongxing, President of the China Cotton Association, also said that there was a great relationship between the rise in cotton prices and supply and demand and speculation when demand did not increase.

Dai Gongxing: I think this is now.

It's hyped up.

If demand does not increase, price increases will be related to supply and demand and speculation.

Most of them are also hyped up.

About 40% of our cotton exports are needed. If our cotton purchase price is higher than the international price, then our domestic textile enterprises will be less competitive and export difficult.

Therefore, the reform is right now, that is to say, the price is determined completely according to the supply and demand relationship of the market, and is basically in line with the international market.

High prices now have a lot to do with speculation.

Cotton prices fluctuate. Cotton growers, cotton ginning mills and textile enterprises are all deeply affected.

The reality of the cotton industry chain is that it is difficult for the downstream cotton cloth to rise sharply in a short time.

If we do not regulate the bidding rules in the industry, the profits of cotton spinning enterprises and ginning mills will only become more and more small, which is bound to have an impact on the entire industry. Wu Qiping, who has many years of experience in cotton industry sales, told reporters that the state should prevent traders from speculating arbitrage in the auction of cotton reserves.

Wu Qiping: among them, we also put forward through cotton enterprises, can not allow traders to participate, but as a country, you said you must not let them participate, I think it is not possible, but I think we can do some adjustment and control through quantity, through time points, or explain that in the process of reserve cotton throwing and storage in the future, I think it is necessary to do some preventive measures.

On the one hand, we have a large quantity of cotton.

On the other hand, the shortage of high-end cotton and good quality cotton makes our quality unable to meet the needs of the high-end cotton textile industry. We also need to import.

Wu Qiping, general manager of Akesu Luen FA Textile Co., Ltd., said that we need to work hard to narrow the gap with the international market.

Wu Qiping: but I think the cost of cotton planting in China should be reduced. If you have reduced the cost of cotton production in the future, the country will not need to regulate the price of cotton, which is because the cost of cotton picking is too high in China. After the industrialization of China, after the mechanization, after the production, the cost of cotton processing or the cost of land in Xinjiang is in line with the international market.