When The Temporary Storage Is First Launched After 6 Years, How Effective Is The Cotton Retaining Wheel?

A few days ago, the 2019 cotton mill entered the work smoothly. Recalling the reserve cotton rotation, From December 2, 2019 to March 31, 2020, it lasted for 4 months, and it was first launched after 6 years of temporary storage and storage. The main purpose is to strengthen the management of central reserve cotton, further optimize the reserve structure and improve the quality of reserves.

Most enterprises reflect that This round round mechanism design is more respectful to the market rule, determines the starting price combining with the domestic and foreign market changes, and sets up a trading pause mechanism. At the same time, it realizes the optimization of reserve cotton structure and improves the quality target of cotton reserves. At the same time, it avoids the difference between domestic and foreign cotton prices, and plays an important role in stabilizing domestic market and protecting the interests of textile enterprises. Affected by the new crown pneumonia epidemic this year, the pressure of cotton textile enterprises is increasing. It is suggested that the relevant mechanisms should be further improved so as to better play the role of reserve cotton and enhance the ability to resist risks in the domestic market.

2019 annual reserve cotton rotation into the planned volume.

In 2019, the cotton reserves entered the actual volume and turnover rate.

The results are in line with expectations.

The planned purchase volume of the reserve cotton wheel is 786 thousand tons, and the total actual turnover is 371 thousand and 600 tons, accounting for 47% of the planned purchase volume. Among them, 359 thousand and 100 tons of mainland warehouse and 12 thousand and 500 tons of Xinjiang warehouse. In 2019, there were 103 cotton storage enterprises in Langfang. The top three enterprises were China cotton group, Langfang storage and Transportation Co., Ltd., Lihua New Cotton Industry Co., Ltd. and China Cotton Textile International Trade Co., Ltd. A total of 25 storage banks participated in the rotation.

This round of entry has effectively optimized the national cotton reserve structure and improved the quality of cotton reserves. On the whole, the planned volume of cotton reserves is low and high, and volume changes with the market. ? There are two main reasons for the substantial increase in planned turn in the middle and late stages: first, after the impact of the new crown pneumonia, the delay in resuming work was postponed, and the downstream production was basically at a standstill and reduced with cotton. Two, it was affected by the rapid spread of the new crown pneumonia epidemic in foreign countries and the complexity of the external trade environment, and most of the enterprises were pessimistic about the development of the future market. Spot cotton prices fell sharply. In order to stabilize cotton prices, boost market confidence and balance supply and demand, the planned intake volume has increased significantly since the ninth week, from the initial planned volume of 7000 tons / day to 15000 tons / day, and the daily planned volume of 20000 tons from sixteenth weeks.

During the period of rotation, the enthusiasm of the cotton enterprises involved in storage has changed with the cotton price and the economic situation at home and abroad. In December 2019, the production and operation of cotton textile enterprises in China was stable, and the willingness to replenish the warehouse was stronger than usual at the end of the year. Cotton prices were relatively strong, and cotton companies were more inclined to sell to textile enterprises. With the outbreak of the new crown pneumonia, the market was depressed, and the risk aversion increased sharply, and the enthusiasm for storage and storage increased significantly.

Pricing mechanism respecting the market

The first round of market entry pricing mechanism, according to the market price to float a certain proportion of the establishment of the maximum price, downward auction pricing way, not only to reserve storage enterprises to reserve the right amount of competitive space, but also to ensure the transportation cost of storage enterprises and other costs. In the 2019 year, the maximum price of the reserve cotton wheel entered the bid in eighth weeks (19~23 January), reaching the maximum 14197 yuan / ton, the cumulative transaction average price was 13089 yuan / ton, the highest price was 14197 yuan / ton, and the lowest price was 11550 yuan / ton. During this round of entry, the average price of cotton price B index (CNCotton B) representing the 3128B cotton price is 13133 yuan / ton, which is basically the same as the average price of the incoming transaction. It can be seen that the round pricing mechanism fully demonstrates the principle of marketization and safeguards the normal market order.

This reserve cotton rotation has significantly increased linkage with domestic and foreign cotton prices and is able to effectively control risks. 。 During the second and third stages of the new crown pneumonia outbreak, the domestic and foreign cotton prices oscillate downward, and the marketization pricing mechanism plays a supporting role to a certain extent. The average price difference at home and abroad was 295 yuan / ton during the turn round period, which was significantly lower than that during non entry period. Most of the enterprises held a positive attitude towards the internal and external linkage mechanism.

Besides, This round of fusing mechanism has been recognized by many textile enterprises. According to the regulations of the relevant state departments, when the domestic cotton price is higher than the international cotton price (1% tariff) 800 yuan / ton for 3 consecutive working days, it will suspend trading in the fourth working days. During the round of entry, the two trading halts were triggered by the 3 consecutive working days of over 800 yuan / ton, due to the difference between domestic and foreign cotton prices. They were suspended at the end of February (suspended for 2 days) and in mid March (suspended for 1 days). The fusing mechanism with international market price in this round of design avoids the problem of increasing internal and external spreads due to domestic rotation, stabilizing domestic cotton prices and ensuring the international competitiveness of domestic textile enterprises.

Normal cotton production to ensure cotton production

Data show that during the transaction period, there was no transaction for 12 consecutive days from December 27, 2019 to January 14, 2020. China Cotton Textile Industry Association has conducted research on Cotton Traders and cotton textile enterprises. Cotton traders said there were many reasons for the low turnover. There were three main points: First, since December 27, 2019, the maximum price of cotton reserve has been lower than cotton futures price, and the price is not attractive; two, the two public inspection has increased the uncertainty of cotton index, reduced the willingness to pay for storage; and the three is that the quality of the storage and storage of cotton is lower than the futures premium, which has affected the enthusiasm of the cotton enterprises.

Cotton spinning enterprises put forward several suggestions for the rotation of cotton reserves. First, when we enter the new territories cotton, we hope to turn in some high-quality imported cotton. In 2020, we hope that the cotton reserves will continue to turn out and realize the normalization of the storage cotton wheels. Two, in view of this round of entry, we should appropriately relax the two public inspection conditions. In the range of certain allowances, we will allow the cotton enterprises to replace the cotton or cotton according to the allowable difference, and reduce the storage and storage of the enterprises. Industry burden, reduce resource waste; three is to improve the rotation mechanism. In terms of pricing methods and rotation time, we should design plans for dealing with extreme market conditions and adjust them flexibly according to the needs of the development of the situation. Four, we must strictly guard against the "black box" operation, guarantee the openness and transparency of the storage cotton rotation, establish the industry "blacklist" and the joint disciplinary system, especially increase the penalties for enterprises who cheat in the cotton trading, and create a market environment of honesty, trustworthiness, fairness and mutual trust. Five, during the period of the storage of cotton, the declared repository can not be included in the National Reserve Bank.