Locust Can'T Keep Cotton Prices Down By 12000 Yuan / Ton.

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The average price of domestic lint spot market was reported to be 11956 yuan / ton as of June 16th, which fell by 152 yuan / ton on Tuesday, or 1.25%, down 15.15% from last year. Locusts threaten the enemy but stocks are growing. The weather in June is favorable for new cotton growth. The new outbreak caused the market's concern about the fall in cotton demand and the downward pressure on cotton prices.

Cotton grows well in China. According to the cooperative reaction in Hami, Xinjiang, as of June 15th, the local temperature was higher, cotton grew well, and the growth rate varied. The current growth rate was basically the same as that of last year. At the same time, it is expected that in mid June, the temperature in most parts of the northern Xinjiang cotton region is slightly lower than that in the southern and eastern Xinjiang. The precipitation in the northern part of Xinjiang is slightly more than that in the northern part of Akesu. Moreover, there is no pest or disease in the cotton field. The desert locusts that are not paying attention to the market may come to a curtain call.

India's cotton stocks are expected to double. According to the US Department of agriculture's supply and demand analysis in June, cotton production in India is expected to double in June in the year of 2019/20, when cotton production has reached a high level of nearly six years, consumption has decreased by 4 million packages and exports have declined sharply.

The new outbreak has brought a certain blow to market confidence. Zheng cotton main rebound from the situation, Zheng cotton rose to 12000 yuan / ton near rise power shortage. Consumption reduction and textile order export pressure are always market limiters. From late May to early June, Zheng cotton began to rebound, or around 500 yuan / ton. With the news of the weather and locusts being subverted, cotton inventories grew again on the table, and cotton prices began to fall.

Cotton yarn price changes at home and abroad on 8-12 June 2020

(source: national cotton market monitoring system, China cotton net)

Yarn and cotton prices continue to decrease, and profits from textile enterprises are further reduced. Last week, the price of foreign cotton yarn rose slightly, rising at 0-52 yuan / ton, and the price difference between Chinese and foreign yarn decreased, which improved the market competitiveness of domestic yarn. The price difference between yarn and cotton continued to shrink, which was reduced by 160 yuan / ton compared with the previous week.

According to the statistics of business agencies, the average price of all cotton yarn for 32S ring spinning and knitting in Shandong area is 20875 yuan / ton, and the price is stable. With the spread of foreign epidemic situation, the order of foreign trade export enterprises of yarn has been greatly reduced, and production and operation pressure is heavy. In addition, there was a big difference in the start-up time of the plant in this year. The cost of raw materials in some enterprises had a big drop. In 3 and April, cotton prices were low. But some enterprises still used stock cotton and the cost did not drop. The manufacturers said that if the price was lowered, some cotton yarn would be sold out, but the enterprises would not be able to bear further losses. Therefore, the quotation of cotton yarn is strong and the cotton price goes up to deteriorate the living environment of the cotton mill.

Business analysts believe that, from the 16 day, the main force of Zheng cotton is going on and off, and eventually the market is closed. Basically, supply and demand are still in an unbalanced state, and cotton prices are unlikely to increase in a short time. At the same time, the market is concerned about the trend of new epidemic.