Cotton Futures In The Eyes Of A Senior "Futures Man" Have Changed 15 Years.

How long can a person persist in a job, 10 or 20 years?

Perhaps for many people involved in the futures industry, it is a lifelong matter.

"In 2002, I entered the futures industry to engage in cotton futures research, and then pferred to market development and industrial customer service, and later pferred to management positions. Until now, I have set up my own company. I haven't been out of the cotton circle for 17 years."

Wang Yuansu, managing director of Xinjiang Zhong De Zhong Cheng products, said in an interview with the Securities Daily reporters that cotton futures, as one of the longest listed varieties in China's futures market, is not only a miniature of China's futures market, but also a benchmark for price discovery and function development.

It is reported that cotton futures is the first futures variety to be listed after China's futures market is rectified, and it also marks the steady development stage of China's futures market.

Since its listing in 2004, cotton futures have been running smoothly, and their price discovery and hedging functions have been stable. It has provided an effective reference for the government to formulate the cotton industry policy and business operation, and has played a positive role in deepening the reform of the cotton circulation system.

Cotton futures in 15 years

"Since I entered the futures industry, I have had an indissoluble bond with cotton futures. Research, market development and industrial customer service have always been the top priority of cotton futures, even after being pferred to management."

Wang Yuansu told reporters in a calm tone, "even after leaving the futures industry, they still work around the cotton circle.

After setting up our own company, we still do cotton trade as the basis trade. I can say that I am both a futures trader and a cotton man.

In fact, there are not many people who share this persistent spirit with Wang Yuansu. Some may be 10 or 20 years. Some people may be lifelong.

Cotton futures, the first variety to be listed after China's futures market is rectified, marks the steady development stage of China's futures market.

Since its listing in 2004, cotton futures have been running smoothly, and their price discovery and hedging functions have been stable. It has provided an effective reference for the government to formulate the cotton industry policy and business operation, and has played a positive role in deepening the reform of the cotton circulation system.

Wang Yuansu said, "I have witnessed the growth of cotton futures, and also witnessed the development of the futures market. We can say that cotton futures are a microcosm of the development of the industry.

The price discovery and hedging function of cotton futures is a powerful proof of the futures market service industry.

In his view, 15 years since the listing of cotton futures, the number of warehouse receipts has increased from tens of thousands of tons to nearly one million tons, and the scale of pactions has also doubled. The business mode is from arbitrage to trade with rights. Participants are from foreign businessmen, private enterprises and private enterprises to state-owned enterprises and textile enterprises. The market price is priced from simple spot price to the current spot price and forward point price. It can be said that domestic cotton futures have become an irreplaceable tool and reference for managing price risk from a small market in an industrial chain.

From this perspective, the growth of cotton futures is highly worthy of recognition and has broader market space for price discovery and hedging functions of the two major futures markets, especially in the global perspective.

It is worth noting that the development of cotton futures in recent years has promoted and promoted the steady development of the integration of industry and finance. Along with the deepening of the market-oriented reform of the cotton industry, entities and finance, domestic and foreign, futures and spot, supply and consumption have been approaching the futures market as the pivot, and have produced a good complementary complementary synergy and mutual promotion effect. The industrial chain has been tested by the severe fluctuation of price and is becoming more and more developed. This is the biggest role that the domestic cotton futures market plays in the sustainable development of the whole cotton industry chain.

"Double eleven" market

Deeper understanding of price discovery

The unique price discovery function of futures is full of infinite charm. Both retail investors and institutional investors are the beneficiaries and participants of price discovery.

In the view of Wang Yuan Su, only through the ups and downs of futures prices can we have a better understanding of the price discovery function.

"The double eleven market in 2016, the market has given me a deep lesson. It should be said that at that time, whether Futures Company or investors involved in futures, the risk control system had been tested immense." Wang Yuansu said that the biggest benefit of participating in hedging industrial customers in the face of additional margin is the accumulation of risk sentiment. That is, whether hedging or unilateral, the only certainty comes from uncertainty. The market's limit prediction is the basic motive for risk management and control, and the fundamental logic of finding the balance between the scale and the revenue is the efficiency of the implementation of the risk control strategy.

Therefore, risks must be shared and pformed. Industrial customers can only share profits. At the same time, not all retail investors are suitable to participate in the futures market directly, but it is enough to share the price volatility of futures market. This is my deeper understanding of the price function found in the futures market.

It is reported that cotton futures have been listed for 15 years, and their achievements both include price discovery, and also contribute to the reform of service target prices and "insurance + futures".

From the historical operation, the function of cotton futures market will play an effective role in promoting the implementation of China's cotton industry policy and promoting the healthy development of cotton industry.

Since 2004, the average daily turnover of cotton futures is 138 thousand hands, which is equivalent to 690 thousand tons of cotton and 132 thousand hands per day. The turnover rate is about 1, and it is at a good level in the listed futures varieties.

In 2016, China's cotton storage and storage had a good effect, cotton futures liquidity increased, average daily turnover and average daily positions reached 330 thousand hands and 304 thousand hands, all higher than the historical average level.

In 2014, the implementation of target price subsidies in China marked the opening of the structural reform of supply side of cotton industry.

In the process of target price reform, the futures market has always been steadfast as "participants", "promoters" and "creators".

Cotton futures have played an active role in consolidating the advantages of the Xinjiang producing areas: first, to facilitate the use of futures hedging by the cotton production units such as the Xinjiang production and Construction Corps, to stabilize the cotton farmers' income and consolidate the status of Xinjiang's main cotton producing areas; two, to comply with the development trend of the cotton industry, to start the Xinjiang cotton futures delivery warehouse in September 2017, to adjust the benchmark price area to Xinjiang, to highlight the cotton price benchmarking role in Xinjiang, and to speed up the pfer of the cotton industry to Xinjiang.

In addition, through actively launching the trial of "insurance + futures", the futures market is exploring a new way to subsidize the market price of cotton.

In 2016, Zheng Shang began to carry out the pilot of "insurance + futures" on cotton futures. As of now, a total of 28 pilot projects have been built. The exchange supports 25 million 60 thousand yuan and an accumulative compensation amount of 15 million 447 thousand and 700 yuan. The project covers the provinces of Xinjiang, Gansu, Shandong, Hunan, Hubei and other major provinces and regions, and for 40 thousand and 500 tons of cotton production to protect the price of cotton.

Cotton futures industry chain should be improved as soon as possible.

Insiders pointed out that the vitality of the cotton spot market needs to rely on reform. Reform can solve the problems in the development of the market and promote the quality and efficiency of the cotton industry.

Therefore, we should speed up the improvement of cotton futures industry chain, incorporate cotton futures prices into market price collection system, improve target price subsidy policy, establish and improve the banking exchange mechanism, and improve the financial market's ability to serve the real economy.

"Can we consider vigorously developing and promoting the yarn futures market, which will give more business paths and control risk tools to all the main bodies of the cotton industry"? Wang Yuansu said. Secondly, whether we can consider further promoting the construction of various market channels for the relevant international varieties and giving the industry more flexible choice space; lastly, we hope that participants and service providers of cotton futures can more integrate into the industry and serve the real economy, and enable vulnerable groups in the industrial chain to make use of the futures market to control and avoid risks and promote the sustainable and healthy development of the whole industrial chain.

In fact, it has become a consensus to improve the opening level of cotton futures in China.

China is the world's largest cotton consuming country and the second largest cotton producing country. However, the international cotton trade is usually based on the cotton futures price of the intercontinental commodity exchange.

China's cotton futures are not open to the outside world.

On the trading mechanism, the difficulty of cross-border supervision is limited, and cotton futures will not be allowed to deal with foreign investors temporarily.

Some experts pointed out that we should accelerate the establishment of an institutional mechanism to support the internationalization of cotton futures and promote the introduction of cotton futures into overseas investors.

Comprehensive revitalize cotton yarn futures, cotton yarn futures in a liquidity basis, explore the import yarn delivery and overseas delivery business.

Through a series of active changes and innovation, we can see a more efficient functional play, a more open market system and a more perfect trading system. A strong cotton futures will effectively strengthen the toughness of the cotton industry, improve the operation efficiency of the industry, enhance the ability to deal with all kinds of risks, and create a better environment for the development of the market economy of the cotton industry.