Cotton Price Trend In 2019: Or Will Continue To Operate Under Pressure

To analyze the trend of cotton prices in 2019, let's start with cotton production.

It is understood that according to the national cotton market monitoring system launched in 2018 cotton planting intention survey shows that in 2019, China's cotton planting area of 49 million 309 thousand mu, an increase of 308 thousand mu, an increase of 0.6%.

Xinjiang intends to grow cotton area of 35 million 728 thousand mu, an increase of 3.3% over the same period last year.

Coincidentally, in January 2019, the Xinjiang autonomous region development and Reform Commission made a special survey on the planting intentions of 12 farmers in Xinjiang. The results showed that the planting area of cotton, sugar crops, vegetables, fruits and other crops increased year by year.

In terms of proportion, grain crops and cotton are still the main crops in Xinjiang. Grain crops account for 38.37% of the estimated sown area per household, and cotton accounts for 44.49% of the expected sown area, accounting for 82.86% of the total.

If the weather is normal in the future, cotton production is expected to continue to hit a new high.

As of February 12, 2018, the processing capacity of Xinjiang cotton has reached 5 million 46 thousand and 400 tons, up from 22 thousand and 100 tons during the same period.

Compared with previous expectations, Xinjiang cotton output has not been reduced, but increased, which caused a certain pressure on cotton prices.

Looking back at foreign markets, according to the preliminary cotton planting intention report of 2019/2020 released by the NCC at its thirty-eighth annual meeting, it is estimated that 14 million 500 thousand acres (88 million 19 thousand acres) will be planted in 2019/2020 cotton growers in the United States, an increase of 2.9% over 2018.

Among them, the area of upland cotton is 14 million 200 thousand acres (86 million 198 thousand acres), an increase of 2.8% compared with 2018, and the supply of international cotton is also expected to increase.

In addition, the future cotton prices will also have a lot to do with downstream consumption.

However, from the recent news, the comprehensive and progressive p Pacific Partnership Agreement (CPTPP) came into effect in Vietnam in January 14, 2019, which will have an impact on the future pattern of textile and clothing production.

It is reported that the CPTPP agreement occupies 13% of the global gross domestic product (GDP) and involves over 500 million of the population.

CPTPP has brought Vietnam an unprecedented market, especially "Vietnam made" or become the biggest winner.

In the field of textile, now "Made in Vietnam" is quietly occupying the market of "Made in China".

In 2009, Nike's Vietnamese foundries completed a complete overtaking of China's capacity. In 2012, the last Chinese mainland factory in Suzhou was closed in Adidas.

In April 2018, UNIQLO announced that China's capacity would shift to Southeast Asia, and Vietnam would take up 40% of its total output.

More than just foreign brands, with the attraction of cheap labor, many shoe and garment enterprises, which originally had roots in Guangdong and Fujian, set off a boom in moving factories to Vietnam.

Chinese textile and garment enterprises also accelerated the pace of pferring to Vietnam.

In the long run, China's status as a major textile and garment industry is being challenged by countries such as Southeast Asia, which will have a significant impact on cotton consumption.

On the other hand, with the improvement of chemical fiber properties, the replacement of cotton is also strengthened.

According to statistics from relevant agencies, in 2017, the world's chemical fiber production reached 66 million 940 thousand tons, a 9 consecutive year, a record high, while in 2017 the world's cotton output was only 26 million 118 thousand tons.

The world's chemical fiber production is viewed from the main producing countries and regions. The largest output is China.

Therefore, with the progress of production and technology, the application of chemical fiber will be more abundant in the global market.

It is not yet too early to draw a conclusion on how cotton prices will run in the future, but cotton prices will continue to face greater pressure under the expectation of increased production and reduced consumption.