Short Term Effects Of The Epidemic On Cotton Prices: Weak Trend In February

The impact of the epidemic on the cotton market is unquestionable. From the near date spot price movements can clearly feel that before the epidemic has yet to be completely defeated, the pressure on the cotton price is still relatively large. Of course, the fund will not be excluded in the short term. (28) the theory tells us that this phenomenon is likely to happen.

From a fundamental point of view, when the supply is basically stable, the reduction of consumption will inevitably result in a fall in prices. The epidemic has a certain inhibitory effect on cotton consumption, the longer the duration of the epidemic, the greater the impact on consumption.

According to the national cotton market monitoring system, domestic cotton consumption in 2019/20 is 7 million 588 thousand and 900 tons, combined with monthly consumption of 630 thousand tons. If the epidemic affects the consumption time in half a month, the consumption of that month may be about 300 thousand tons. The longer the time, the greater the impact and the greater the difficulty of the latter.

Of course, the impact of the epidemic on different regions and industries is also different. At least in the month, cotton prices should be under pressure. We know that the rise and fall of cotton price is only a representation. The main reason behind the price fluctuation is the truth. There must be a reason behind the trend of Zheng cotton's every K-line. Weather, fundamentals, finance, economy, policies and funds may have an impact on it. It is by no means an unprovoked rise and fall.

Before the Spring Festival, Zheng cotton was strong and rising continuously. At that time, the downstream textile enterprises had a very good production order, and cotton prices were strong under the support of the basic level. After the festival is affected by the epidemic, under the situation of supply determination, enterprises are all in a state of shutdown, and the reduction of demand will inevitably lead to a fall in cotton prices at the front end. Of course, cotton prices rebounded to more than 13000 yuan / ton after the overfall. As for whether the future can return to the normal value range, it depends on the coordination of other factors.


We extend the K-line and basically see cotton prices fluctuating at most of the 15000 yuan / ton, which is much lower than this price and the running time is not long. This does not mean that cotton prices will rise in the short term, because without the emergence of new hype factors, the negative impact of the epidemic will continue. In February, it will remain weak and weak.