What Is The Market Logic Behind Cotton Price Fluctuations?

This year is the third year of the abolition of the policy of cotton purchasing and storage in China. After two years of low market prices, the cotton market in 2016 is mainly driven by price fluctuation, but it is also accompanied by price fluctuations.

What is the market logic behind the fluctuations? An analyst in Shandong said that in 2016, the cotton market was pformed from a policy system to a market system for third years, and prices rose gradually after the "cliff style" decline in the previous two years.

According to Zhai Baojiang, political commissar of the eight regiment of alar city, the first division of Xinjiang production and Construction Corps, from cotton

Since 2014, the average price of seed cotton has been about 6 yuan / kg, about 5.5 yuan per kilogram in 2015, and the highest price of cotton in 2016, with an average price of 7.6 yuan / kg.

The price of lint is 15000 yuan / ton, and the net income of lint per ton is 2000 yuan.

Each cotton grower has contracted about 40 acres of land, and is expected to earn a net income of 10000 yuan.

In 2016, under the influence of multiple factors, such as reserve cotton rotation, cotton width trading and innovation of cotton planting, the fluctuation of the cotton market increased.

The cotton price rise in 2016 can be summed up in two aspects: first, the tight supply of the market, and the two is the promotion of capital.

According to the national cotton production data released by the National Bureau of statistics, the total output of cotton in 2016 was 5 million 343 thousand tons, down 4.6% from 260 thousand tons in 2015.

The analyst also said that under the background of insufficient market cotton production, the shortage of spot market promoted cotton prices to rise in a straight line; the reasons of slow speed, limited quantity, difficulty in warehousing and traders hoarding were also providing continuous driving force for cotton prices.

In May 2016, the national cotton store came out, and entered the July, the volume of the national cotton storage increased. The market was worried about the supply of cotton, and cotton prices began to rise in the second round. Despite the pressure from the 8 round of storage postponed news on the rise in cotton prices, the supply of new cotton was not enough after the listing, so cotton prices remained strong.

Finally, the analyst said that from September 2016 onwards,

Behind the rise is more money driven. After the Mid Autumn Festival, the regulation policy is introduced, the property market starts to cool down, and the commodity market is relatively prosperous. At the same time, the RMB is in the depreciation cycle. Cotton, as a daily necessities, is slowing down, but the upward trend of cotton prices is relatively clear.

The increase in cotton growers is only relative to 2015. Now the seed cotton purchase price is 7.7 yuan / kg. How much can the growers earn? Ye Guangrong, the two member of the eight regiment of alar city, the first division of the Xinjiang production and Construction Corps, said that the money earned from cotton mainly came from the state's target price subsidies, and the state did not give subsidies.

You can't make money.

The necessary agricultural cost and production cost of cotton are about 1500 yuan per mu, and the cost is 1.8 yuan / kg this year.

According to the average production per kilogram of 380 kilograms, the total cost is 684 yuan, and the total cost of cotton per mu is about 2184 yuan.

In addition, 76 kilograms of cotton should be handed over to the collective per mu. According to the current purchase price of 7.7 yuan / kg seed cotton, he can earn about 2340 yuan per mu.

Excluding the cost, the net income per mu is about 156 yuan.

For 43 mu of land, net income totaled about 6708 yuan.

In this way, the net income from cotton production can only be guaranteed.

In 2016, domestic cotton production was at a low historical level, while in some parts of the country there was an increase in production in 2017. According to the cotton planting intention of investigation, farmers' enthusiasm for planting cotton increased by 3.1% in 2017.

However, due to limited income from cotton planting, there is still a gap between farmers' enthusiasm for planting and the period of storage and purchase. Therefore, the cotton planting area in the new year lacks the premise for a substantial increase.

Under the background of "going stock", cotton import continued to be restricted by quota policy in 2017, and cotton city's emphasis was still on the digestion of national cotton reserves, so the cotton supply situation was not much different from that in 2016.

With the gradual reduction of state cotton stocks, the huge pressure on the stock market to the market has obviously weakened, so there is still room for breakthrough in cotton prices.

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