2019 Reserve Cotton Rotation: To Medium And Small Textile Enterprises Hope Yarn Profit Is Expected To Rise.

In April 23, 2019, the State Grain and material reserve bureau and the Ministry of Finance jointly issued a notice on rotation of some central cotton reserves in 2019.

The notice points out that the time of reserve cotton rotation is the national statutory working day from May 5, 2019 to September 30, 2019, with a total volume of about 1 million tons. The selling price of listed stocks is determined according to the market dynamics, and is sold through the open auction of the national cotton trading market.

The long-awaited reserve cotton rotation message fell to the ground, and the industry quickly forwarded it. The companies expressed their appreciation of the late cotton reserves and gave a praise for the policy.

Due to the strong spot price of cotton in the near future, some textile enterprises are hard to digest when facing high priced cotton, maintain more wait-and-see attitude, keep raw material stocks low, and wait for cotton reserves to go out.

Whether the reserve cotton production can meet the win-win situation of national inventory and small and medium-sized enterprises, mainly depends on downstream consumer demand.

Shandong's main producer of low and medium yarn spinning enterprises said that since the Spring Festival of 2019, the raw material market fluctuated greatly, and the low price cotton was hard to find in the market. The production of cotton yarn products appeared the phenomenon of price upside down. As a member of the small and medium-sized enterprises, the reserve cotton wheel appeared to be a "life-saving straw", and the textile enterprise said it would seize it tightly.

Since April, there has been a downward trend in the price of cotton yarn, and some textile mills have not been able to protect their profits. The reserve cotton wheel has brought hope to small and medium-sized textile enterprises, especially those who plan to purchase low-grade cotton, which is self-evident, not only ensures the smooth operation of the market, but also reduces the risk brought by the fluctuation of cotton prices to the textile enterprises.

The market is expected that after the start of the reserve cotton spinning, textile enterprises will recover sooner or later when the cost of raw materials is reduced and sales are improving.