Cotton Prices Are Expected To Drop Again.

In late August, hand picked cotton in eastern Xinjiang and southern Kashi and Akesu began picking sporadically. It is expected that the flower curtain will be fully opened in mid 9. The ginning plant will start to concentrate in late September to mid October. Xinjiang's machine picked cotton mining is expected to start in early October. From time, it will be delayed for less than a week compared with 2017 and 2018. At present, regardless of cotton purchase group, cotton processing group or spot sales group, the focus of attention is no doubt what the price of Xinjiang hand picking and machine seed cotton will be in 2019/20.

Northern Jiangsu Province, Kuitun, Shihezi, Changji and other ginning plants generally believe that the purchase price of the 40 cotton sorting machine will be opened at 4.50-4.80 yuan / kg, such as 11 and December, the Sino US trade war continues to escalate and can not be reconciled. The 40 linen seed cotton purchase price is likely to fall below 4 yuan / kg. The three largest cotton picking enterprises in the southern Xinjiang cotton region decide that the price of 40 cotton split will be 5.30-5.50 yuan / kg, and that there is not enough seed cotton, but the area where the cotton mill can be seriously overloaded may reach 5.80-6.0 yuan / kg after eleven, and the lowest annual acquisition or below 5 yuan / kg.

Some cotton enterprises said that the price of seed cotton purchase and lint price in 9-11 months were "medium high low" trend, so the operation of "late opening scale, then slow down and then mopping up" was more reasonable. From the survey, cotton processing enterprises not only regard Chen cotton and 2018/19 cotton prices as "weathervane" to measure the cost of lint, but also have a strong sense of hedging (or intertemporal, cross market, cross variety arbitrage).

Some cotton enterprises believe that the risk of purchasing processing in 2019/20 is still very large. Therefore, we must control the acquisition cost and resolutely do not rush to harvest; two, we must promptly deliver the goods to the mainland and produce warehouse receipts as soon as possible; three, we must strictly grasp the purchase, high quality and high price, and reject all the seed cotton that does not meet the requirements; four, we should "short, flat and fast" - quick processing, quick sales and quick return, and we will never "drag the water" and not "gambling" the market. The target price of cotton in Xinjiang is still 18600 yuan / ton in 2019/20, and the farmers' income is guaranteed by target price subsidies, so the cotton mill has a strong desire to "press down, lower prices and reduce revenue".