The New Crown Epidemic Has Limited Impact On Upstream Cotton Enterprises.

In late February, the new crown epidemic situation is being gradually controlled. Due to concerns about the progress of enterprises' resumption, the market panic has not been completely eliminated. Judging from the survey, the impact of the epidemic on the upstream supply side of cotton is much smaller than that of the downstream consumption side.

According to Xinjiang professionals, before the Spring Festival, the cotton ginning enterprises have been processed, and there are still a few cotton seeds to be processed by individual large purchase factories. The epidemic situation has limited impact on cotton processing and production. In terms of sales, most of the cotton ginning enterprises in 2019 had already sold through the hedging point price, and cotton prices fell, but spot futures were losing money, but futures were profitable. Even in the light of the current spot price, sales are also profitable, not to mention the fact that the cash resources of the ginning enterprises are limited, mainly concentrated in the trading enterprises. For trade enterprises, the impact of the fall in cotton prices is also limited. At present, the price of Zheng cotton CF2005 contract is lower than that of the initial hedging. Therefore, the overall impact on the upstream supply side of cotton is limited.

It is reported that although the road traffic affected by the epidemic has been affected, the operation of the Xinjiang Xinjiang Railway is normal. At present, the downstream consumption of cotton has not been significantly improved, and has little impact on the circulation of the cotton.

In view of the trend of cotton prices in the future, some ginning companies believe that after the epidemic, once the downstream consumption is resumed, the rebound probability of cotton prices at a low level will be greater. Some enterprises believe that the epidemic situation is not clear now, especially the news about the spread of the new crown virus infection abroad, and the market sentiment is pessimistic.