Adjustment Policy To Grasp Zheng Cotton Continue The Interval Shock

Since the second half of 2018, there has been a noticeable adjustment in the policy of reserve cotton and the quota issuance of imported cotton.

From the data analysis, the total import quota of two cotton imports increased by 1 million 600 thousand tons, plus 1 million tons of cotton reserves, basically meet the new cotton demand for domestic cotton in 2019.

In addition to the expected new cotton output reduction caused by occasional weather factors, it is expected that the cotton market will have a high probability of a sharp rise in the year, and the interval shock is still the main keynote.

1. The policy of changing cotton reserves has changed significantly.

Entering the 2019, there were new changes in the central reserve cotton rotation arrangement.

In contrast to the Announcement No. eighteenth issued by the NDRC and the Ministry of Finance in 2017, the announcement of the State Grain and material reserve bureau and the Ministry of Finance on 2019 No. first has the following changes:

Two. Imported cotton has become the main source of domestic cotton shortfall.

Since 2014, China has strictly controlled the import of cotton, leaving room for the storage of cotton.

With the stock of cotton reserves falling to a safe level, the task of regulating cotton resources has gradually shifted from cotton reserves to imported cotton.

In June 12, 2018 and April 12, 2019, the NDRC announced a total of 1 million 600 thousand tons of cotton import quota.

From September 2018 to March 2019, China imported about 1 million 260 thousand tons of cotton, an increase of 85.3% over the same period last year.

Three, domestic cotton supply and demand basic balance

Based on the forecast and Market Research of authoritative organizations at home and abroad, combined with the current cotton rotation plan and the import quota allocation, the end of 2018/19 inventory is expected to be reduced by more than 110 million tons to more than 450 tons in the last year.

Among them, the stock of reserve cotton decreased by more than 110 million tons to about 2 million tons, and social inventory remained unchanged from last year, which is at a high level in recent years.

Cotton import quotas and cotton reserves will ensure adequate supply of cotton in the year.

Four, the new year's global cotton production is expected to be strong.

In February 2019, the US Agricultural Outlook Forum estimated that the world's cotton production increased by 6.8% to 27 million 540 thousand tons in 2019/10, increased by 1.5% to 27 million 320 thousand tons, and the end of the world inventory increased by 1.3% to 16 million 660 thousand tons.

Represented by American cotton, since March, due to the influence of policy, weather and the price of agricultural products, the US Department of agriculture has converted the US cotton sowing area in 2018/19 to a 2% reduction from 1.1% in the Forecast Forum.

Under the conditions of abandoned farming rate and yield per unit area, the output of US cotton increased from 22.3% to 18.8% in 2018/19.

That is to say, in 2019/20, the output of US cotton is about 4 million 750 thousand tons, and the output of 2018/19 is 4 million tons.

From the analysis of weather conditions and multiple factors in the main cotton producing areas of the world, cotton production in 2019/20 is still a big probability event.

1. Soil moisture in the southwestern United States is good.

Drought monitoring in the United States showed that, unlike the dry weather in the same period last year, the soil moisture in the southwestern United States was good in spring 2019, which was good for cotton planting, and was conducive to reducing the rate of abandoned cotton and increasing cotton production.

2. The monsoon rainfall in India is at a normal level.

The India Meteorological Department expects that the 6-9 month southwest monsoon rainfall is 96% of the long cycle level, approaching the normal level.

Overall, there will be good rainfall distribution in the 2019 monsoon season, which will benefit the next autumn harvest season.

3, cotton production in Xinjiang is guaranteed.

2019 is the first three years of cotton target price in the last year. The cotton planting area in Xinjiang has not been reduced actively.

The cotton monitoring system in 2019 showed that the cotton planting area in Xinjiang was 34 million 815 thousand mu, an increase of 0.7% over the same period last year.

If the weather does not show extreme conditions, it is estimated that cotton production in Xinjiang will be basically stable in 2019/20.

Five, summary

From the analysis of domestic supply and demand situation, due to the 1 million tons of cotton reserves put into operation and the quota of imported cotton, the supply of cotton is abundant in 2018/19, and the price of zhengmian is difficult to rise sharply, and the range fluctuation is still the main keynote.

In terms of rhythm, due to the continuous reduction of high cost performance reserve cotton, it is expected that in 2019, there will be a familiar robbing situation in the initial stage of cotton storage, and then the price of Zheng cotton will be promoted step by step. However, a large number of cotton warehouse receipts still have a large number of failure to complete the hedging or wait for delivery, so the price of zhengmian will be phased.

From the analysis of global supply and demand situation, China's future cotton supply gap needs more imported cotton to make up for it. The global cotton yield increase in 2019/20 is expected to meet China's import demand.

At present, the cotton weather sensitive period in the northern hemisphere is concerned about the impact of weather changes on mood and the actual yield of cotton.