Interpretation Of New Territories Cotton Rotation Rules In 2019

In December 2nd, Xinjiang cotton rotation will be officially launched in 2019. What are the new changes in this year's reserve cotton rotation? How can enterprises use the opportunity to manage the market risks of enterprises when the market continues to be depressed? How can the storage enterprises take less detours and increase the success rate and efficiency of the storage? China cotton net interviewed the responsible persons of the relevant units, and interpreted the key points of the announcement and rules for your reference.

What are the highlights of the round of entry policy this year?

The new cotton rotation was first launched after six years of temporary purchase and storage, which has changed significantly over the past few years. First, the purpose of entry is different. The third announcement of the State Grain and material reserve bureau and the Ministry of Finance in 2019 showed that the main purpose of this new cotton rotation is to "strengthen the management of central reserve cotton, further optimize the reserve structure and improve the quality of reserves". The notice also pointed out that "in the process of Xinjiang cotton rotation, such as the domestic and foreign cotton market has undergone major changes, according to the needs of market regulation and control, the State Grain and material reserve bureau will make necessary adjustments to the rotation arrangements with other departments". This is exactly the same as the 4 round announcement this year. In the domestic cotton market continued to slump, and even once with the international market price upside down, the right amount of new cotton imports, is conducive to the optimization of reserve stocks, but also to a certain extent, ease the pressure on the domestic spot market. The announcement indicates that the relevant departments of the state do not want to enter the new territories cotton to affect the normal operation of the market, and will also pay special attention to the major changes in the domestic and foreign markets during the round of entry. Therefore, it is especially pointed out that the possibility of policy adjustment is necessary.

The two is the first adoption of the market pricing mechanism in the round. This round of entry does not impose a fixed price (that is, what some people call the "bottom price"). Instead, it adopts the pricing method of setting up the maximum price and downward bidding according to the market price. Referring to the two index average price representing the spot price of domestic cotton as the market price, it is more credible. On the one hand, on the one hand, the floating ratio should be considered to reserve the right amount of bidding space for the storage and storage enterprises. At the same time, the necessary transportation cost to the designated storage warehouse is also considered, which is similar to the premium of Xinjiang cotton to the futures delivery warehouse in the mainland.

The three is the fusing mechanism for the first time in rotation. In order to avoid the irrational rise of domestic cotton prices and weaken the international competitiveness of domestic textile enterprises, this round has specially designed a fusing mechanism with international market prices. With the difference of 800 yuan / ton between inside and outside cotton price as the condition of automatic fusing, the flexibility of policy and market linkage has been greatly enhanced. This is also the biggest highlight of this round of policy design.

How to understand gross and daily listing volume

According to the announcement of the State Bureau of grain and material reserve, the total volume of this round is about 500 thousand tons, and the daily sale is about 7000 tons. It can be understood from three aspects. The first is the total volume of 500 thousand tons of gross imports. In the past year, when the inventory is more abundant, the trend of import quotas is relaxed and the consumption of industrial back-end is temporarily slowed down, it can relieve the pressure of oversupply, but it will not have a huge impact on the balance of supply and demand in the domestic market. The two is the balanced listing mechanism of about 7000 tons per day, which is not only an important measure to avoid the excessive interference of the market, but also helps to balance the storage in order to reduce the queuing time of the enterprises in the storage. It can be popularly understood that in the 4 months of the turn in, the daily storage of cotton is quantitatively listed and purchased. Third, according to this mechanism, the total amount and the daily listing amount are only plans, and the final number of transactions will depend on the trade-off between the comprehensive judgement of the storage enterprises and the marketing strategy of their own. It is clear that the state will not compete with the market for resources. If the listing is not traded, it is clear that the market does not need to enter the "sales channel", and the relevant departments will not "impose difficulties" to interfere with the market. The central storage cotton company will comply with the requirements of the announcement, and will have a balanced listing of 7000 tons per trading day. Therefore, the storage and storage enterprises, especially those with high sales pressure, should rationally and comprehensively judge the market situation. According to the actual situation of the enterprises, we should reasonably plan the sales strategy and storage rhythm.

The specific conditions for suspending or restarting transactions in the FX trading mechanism

The eleventh provision of the implementation rules of the new territories cotton in 2019 provides that when the domestic cotton price is higher than the international cotton price for 800 consecutive consecutive 3 working days, it will suspend trading on the fourth working day. When the price difference between domestic cotton and the international cotton price falls to 800 yuan / ton, the transaction will be restarted on the first working day after the fall. All mentioned above are working days, and I hope that all parties will avoid confusion when doing statistical calculations.

According to the detailed rules and bidding rules, the China Cotton Storage Company and the trading market will announce the difference between domestic and foreign prices on the morning of each working day. If the trading conditions are met on the same day, the delivery warehouse and quantity will be announced at the same time. The opening time is 3 p.m. for each trading day.

The quality requirements of incoming cotton are stricter, so how can enterprises avoid the storage after the transaction?

In order to ensure the ability of regulation and control, the state has higher requirements for the quality of central cotton reserves, and the requirements of the quality indicators and exclusionary stipulations of cotton are clearly stipulated in this round. There are also some discussions on the public inspection of the warehouse. It is feared that the difference between the results of the Treasury test and the expected results will lead to the failure to save or even default.

It should be noted that the public inspection of stored cotton is the statutory inspection stipulated in the regulations on cotton quality supervision and administration, and is also a necessary link to ensure the quality of cotton reserves.

How to avoid the risk of storage after the transaction? First of all, the enterprise should have a warehouse with the imported regulatory database and meet the storage conditions before it is filming, because once the transaction is completed, it is necessary to submit the batch information within 3 days as the annex of the contract, and the contract can be concluded after the confirmation of the transaction market. Second, we must have a basic judgement on the quality index of the cotton submitted to the batches. If we are not sure, we should not rush the auction, because once the contract is signed, the batch can not be changed. Third, for batches of cotton bags which do not meet the requirements of import and export, they can be removed first and shipped again. The implementation details give special consideration to the actual situation of the cotton imported into the Xinjiang regulatory warehouse. The minimum permissible allowance for the 186 package is not less than 170 packages, and the 96 package is not less than 85 packages. Fourth, if the newly processed cotton is released after the implementation of the rules, it is suggested that the enterprises should pick up the package group after entering the storage requirements and then re-enter the regulatory repository.

This round of entry has special precautionary measures against fraud in cotton quality. The situation of maliciously doped false cotton will be dealt with according to relevant regulations according to relevant regulations. It is hoped that individual businesses should not be lucky enough to test the law.

How did the relevant units consider the practical difficulties of the storage enterprises in this round?

First, considering that Xinjiang cotton has entered Xinjiang's professional supervision warehouse before delivery, it will take time to deliver it to the container depot and is affected by the transport capacity conditions. In this round of implementation details, the delivery time has been extended. The sixteenth and fifty-third implementing rules and the contract for the purchase of the central cotton reserve have agreed that the warehousing enterprises shall deliver cotton to the delivery warehouse and complete the preliminary inspection within 45 days after the signing of the contract. In fact, since the signing of the contract requires delivery of the delivery lot information, it can not be changed after submission, and the storage enterprise only needs to arrange the shipment immediately after signing the contract.

Two is the first time to allow batches of cotton bags that do not meet the requirements of storage can be directly removed, according to the actual weight of cotton bags in accordance with the conditions of settlement, do not need to change the package and other operations, convenient for the storage enterprises to perform and settle as soon as possible.

Three, it is clear in the implementation details that the responsibility for carrying out the storage is not due to the reasons for the storage and storage, which is not timely, or fails to notify the storage enterprises in time to confirm the results of the warehousing inspection. It is also clear that when necessary, the charging standards of the Treasury for re loading, sorting, moving, outgoing and warehousing, and so on, will protect the interests of the storage and storage enterprises.

It is necessary to remind the storage enterprises that it is best to centrally transport the contract according to the contract, at least at a minimum, should be transported to the warehouse in batches, so that the warehouse can be checked and declared for public inspection in time. Otherwise, the storage of cotton is not yet done, but it can not be included in the reserve insurance category, which will lead to a vacuum period of cotton insurance or increase the risk and cost of the storage enterprise.

In order to enter the market soon, we should remind the companies that are interested in bidding that they must carefully read the "implementation rules for rotation", "detailed rules for the implementation of notarization inspections" and "detailed rules for bidding transactions" which have been published by China grain storage group, China Fiber Quality Monitoring Center, and the national cotton trading market. We should study the relevant regulatory changes and actively prepare for the auction. We should make good use of the opportunity of Xinjiang cotton to enter the market, effectively control market risks and maximize the efficiency of enterprises.