Demand Is Insufficient, Cotton Prices Are Difficult To Continue To Rise.

The new crown virus has led to a fall in most commodity futures prices. This week, in the hype of locust plague, some agricultural futures took the opportunity to rise. Among them, the main force of Zhengzhou cotton rose 480 yuan / ton on Monday. The domestic cotton spinning industry chain is a densely populated industry. Because of the need for prevention and control and the shortage of personnel, most of the cotton spinning enterprises in China have not yet resumed work, and their stocks are quite adequate, so they do not have the conditions of rising.

The sale of lint is slow and the operating rate of enterprises is low.

According to the national cotton market monitoring system survey data, as of February 14, 2020, the national cotton sales rate was 48.6%, an increase of 7.05 percentage points compared with the same period last year, the growth rate decreased significantly for two consecutive weeks. The sales rate in Xinjiang was 46.7%, an increase of 4.8 percentage points over the same period last year, an increase of 2 percentage points lower than that of last week. And cotton processing in China basically stagnated.

Because of the need for prevention and control, most cotton spinning enterprises in China have not yet resumed work. According to the subregional perspective, the return rate of large textile enterprises in Shandong is relatively high, less than 50%, followed by Jiangsu, and Zhejiang, Fujian and Xinjiang are basically at a standstill. In addition to Hubei Province, the number of new cases increased steadily for half a month, and the epidemic has been relieved since this week. However, due to the reasons for personnel coming to posts, the operating rate is expected to increase slowly.

In terms of price, domestic cotton and cotton yarn prices have declined. By the end of this Tuesday, the domestic 328 cotton price index dropped by 400 yuan / ton compared with the last trading day of the previous year, and the 32S yarn price index dropped by 170 yuan / ton compared with the last trading day.

Yarn and cloth production and sales rate declined, inventory rose

On the one hand, because of the need of the epidemic, on the one hand, because of the lack of demand, the domestic yarn and grey fabric enterprises are hard to start, and at the same time, the finished products are difficult to sell. Last week, according to statistics, the load index of domestic yarn and grey fabric was less than half of that of the same period in previous years.

In the early February, the yarn production and sales rate of the enterprises surveyed was 73%, a decrease of 25.6 percentage points, down 18.6 percentage points from the same period last year, 24 percentage points lower than the average level in the past three years. Cloth production and sales rate was 63.3%, a decrease of 31.4 percentage points, down 32.6 percentage points over the same period last year, 32.9 percentage points lower than the average level in the past three years. Inventory, raw materials and finished goods inventories rose sharply. A sample survey of the national cotton market monitoring system showed that as of the beginning of February, the average number of cotton stocks used by the enterprises surveyed was about 54.1 days, an increase of 22.2 days, an increase of 9.5 days compared with the same period last year. Among them, raw materials inventory in Hunan, Hubei and Hebei provinces is headed. Because the downstream has not started, the raw material inventory that the enterprise replenish years ago has not yet been put into use. Yarn inventory for 33.3 days sales, an increase of 13.6 days, an increase of 11.7 days compared to the same period; the inventory of 60.7 days sales, an increase of 17.1 days, an increase of 25.8 days compared to the same period.

By the end of January, the cotton business inventories in the whole country decreased by 170 thousand tons to 5 million 10 thousand tons compared with the previous month. The stock has reached a new high in recent years, an increase of 170 thousand tons compared with the same period last year.

USDA report is empty

In February, the US agricultural report increased the world's cotton production by 850 thousand packages, and at the same time reduced the global cotton consumption by 1 million 210 thousand packages, raising the global cotton final inventory of 2019/20 2 million 530 thousand packs. The outbreak of new coronavirus has brought a negative impact on the economy. China's consumption has been cut by 1 million packages, while its output and imports remain unchanged, leading to a 1 million increase in final inventory estimates compared with last month. Consumption in Vietnam has also been reduced, while consumption in Pakistan and Turkey has increased. On the India side, import volume is projected to increase and export volume is estimated to be reduced. The final inventory estimate will be increased by 300 thousand packets at the end of the year. The US cotton forecast is unchanged this month.

The locusts disaster has a real impact, and remains to be seen in the later stage.

The cotton price was closed on Monday. Since December last year, locust has been spreading in East Africa. Africa, the Red Sea and southwest Asia have become the worst hit areas. Uganda, Tanzania, India and Pakistan have also been threatened.

Locusts and locusts have similar migratory habits in China, but they belong to different species, and there are great differences in their living environment. Taking into account the barrier between the Kunlun mountains and the Himalaya mountains in the border area of China, it is very difficult for locust to be too high in the cold regions at the altitude. This desert locusts disaster can hardly affect the Xinjiang area of China. Desert locust like to spawn in moist soil, but the weather in Xinjiang is dry.

On the international front, India and Pakistan share seven of the world's total output in 30% of the FAO warning countries. According to the latest news of Xinhua News Agency on February 17th evening, the locust disaster in India has basically ended. According to reports, the locust disaster in India resulted in a large crop reduction or crop failure. At present, most parts of cotton in India and Pakistan have been harvested. Desert locusts may have little impact on cotton production this year, but they may pose a potential threat to new cotton crops in India and Pakistan.

At present, the upstream lint sales, the middle cotton spinning production and terminal demand in West Lake and semi stagnation state will affect the domestic cotton and cotton yarn consumption in the short term, and the negative effect is obvious. With the elimination of the epidemic and the resumption of enterprises, the downstream demand will gradually improve. However, at present, domestic cotton enterprises' raw materials and finished goods inventory of textile enterprises are relatively adequate, and the demand for replenishment is temporarily difficult to release. Later, attention should be paid to downstream order recovery, locust disaster and the expected change of new cotton planting area.