Cotton Market Trend Unknown Textile Enterprises How To Plan Replenishment?

Since March, Zheng cotton's main contract CF1905 has remained at a range of 15100-15500 yuan / ton, and investors and hedging cotton merchants are waiting to wait and see.

In the first ten days, the industry was disturbed by the cotton reserves or the news of the round trip.

In addition, trade negotiations between China and the United States were slow, and cotton traders were particularly cautious in their operations.

Of course, for many textile enterprises, how to carry out replenishment is even more difficult.

According to feedback from Shandong, Hebei and some parts of the cotton mill, some products were backlog before the Spring Festival. After the festival, orders were rebounded and inventories decreased significantly. Most enterprises used cotton stocks in 1-2 months, and some small businesses kept half month inventory to meet the start-up needs.

As the price of cotton fell sharply during the Spring Festival, the difference of cotton price between home and abroad was rapidly expanded.

At the same time, in 2019, 1% tariff import cotton quotas came one after another, and textile enterprises increased the quantity of imported cotton as required.

According to the general estimate, textile enterprises use quota to purchase imported cotton with the same index, saving 1000-1500 yuan / ton than domestic cotton.

However, the quota of 894 thousand tons of domestic products is limited, and the purchase of cotton by textile enterprises has accelerated the use of quotas.

For enterprises not applying for quotas, how to choose the cotton needed is particularly important.

Here is a brief summary of the current situation of domestic lint.

First of all, since the listing of Xinjiang cotton, Sino US trade disputes have had a great impact on the spot market, and also made some downstream textile enterprises have a tight mentality.

The cost of machine picked cotton in Xinjiang is about 15200-15300 yuan / ton, which is obviously superior to cotton picking by hand.

Many high-quality resources in the early stage were registered as futures warehouse receipts.

At present, the cash flow is limited, and the ginning factory is very expensive.

Textile companies can wait for Zheng cotton futures price down, through spot price procurement or more cost-effective (current stock quotes 15600-15700 yuan / ton).

Second, purchase of imported cotton can be considered.

According to the port's investigation, the spot price of the same double 28-29 Brazil cotton is 15500-15600 yuan / ton, compared with domestic cotton, it has a higher price performance ratio.

In addition, the quality of India cotton spot price quotation is also around 15400-15500, but part of India cotton three silk is too high, cotton mill choice is more cautious.

In previous years, low grade real estate cotton was the first choice for low spun yarn enterprises. But this year, cotton seeds were hard to harvest in the mainland, and the price of the cotton ginning factory was too high, and the purchase and sale of real estate cotton was in a predicament.

This is also a major factor in stimulating the turnover of low grade Xinjiang cotton and some low grade imported cotton.

Finally, textile enterprises can purchase high-quality hand picked Xinjiang cotton and imported long staple cotton according to their needs.

According to feedback from an import and export textile enterprise, sales of imported Pima cotton are hot this year, mainly due to the relatively low external market, while the price of long staple cotton in Xinjiang is relatively high, which undoubtedly becomes the first choice.

Some enterprises have even ordered long term orders for the whole year.

Of course, textile enterprises in the specific procurement process, according to the enterprise order requirements, specific operating conditions and financial strength, choose high cost performance resources, the above focus on spot purchase reference suggestions.

Enterprises can also hedge through hedging, so as to reduce procurement risk.

In addition, the structural contradictions of high quality and high quality resources in China are still outstanding at present. The textile enterprises should pay attention to the rational planning of raw material structure in the long-term reserve library planning.