Zhengshang Institute And Local Securities Regulatory Bureau Hold Commodity Risk Management Forum

In China's cotton industry, Hubei, located in the Yangtze River Basin, is one of the traditional cotton producing areas in the mainland. Moreover, the local textile industry chain in Hubei is relatively complete, forming an industrial chain of cotton planting and processing trade, cotton textile, weaving, printing and dyeing, and garment processing. However, since the outbreak of new crown pneumonia in China this year, the cotton and cotton textile industry in Hubei Province, which is located in the "epidemic center", suffered heavy losses. At present, as Hubei Province has entered the stage of "post epidemic revitalization", how to revitalize the vitality of local cotton and cotton textile industry has become one of the many problems in front of Hubei Province.

On July 21, Hubei securities regulatory bureau and Zhengzhou Commodity Exchange (hereinafter referred to as "zhengshangsuo") jointly hosted the "stabilizing enterprises, ensuring agriculture, escorting entities" bulk commodity risk management (Hubei) forum. The forum was held in the form of online conference for 4 days. During the forum, focusing on cotton and other superior varieties in Hubei, a "cotton sub forum" was made for Hubei cotton and cotton textile industry. Experts from the industry were invited to analyze the current development situation of domestic cotton and Hubei cotton and cotton textile market, and closely combined with the risk management needs of spot enterprises, the cotton and cotton textile production in Hubei Province were discussed How to carry out effective risk management, how to accelerate the recovery of business vitality and other topics were discussed, which effectively helped Hubei cotton industry and cotton related enterprises to enhance their development confidence.

Heavy losses of cotton industry in Hubei Province

Hubei has always been a traditional cotton base in the Yangtze River Basin, which has certain advantages in climate conditions, soil suitability, cotton planting tradition, technology accumulation, management mode, processing capacity, cotton demand and so on. In addition to Xinjiang, the main cotton producing area in China, Hubei is one of the important cotton production areas in the mainland of China, and is also one of the major textile industry provinces in China.

In terms of cotton output, according to the data of relevant statistical institutions, China's total cotton output will be about 5.9057 million tons in 2019, of which, Hubei's cotton production accounts for about 2.44%, about 144000 tons; the other two important cotton production areas in the mainland, Hebei and Shandong, account for about 3.85% and 3.33%, respectively, about 227000 tons and 196000 tons. In terms of planting area, according to the data of the National Bureau of statistics, the cotton planting area in Hubei Province in 2019 is about 2442000 mu, an increase of 52000 Mu compared with that in 2018, with a year-on-year increase of 2.2%; the lint yield per unit area is 58.8 kg / mu, which is 3.6 kg / mu lower than that in 2018.

From the short-term analysis of cotton quality of Hubei Province, the proportion of white cotton in the short-term report of 2019 is more than 68% of the total cotton quality of Hubei Province In terms of length uniformity, the proportion of medium and high-grade cotton in Hubei is stable in 2019, and the proportion of medium and above cotton is 95.68%; in terms of breaking strength, the proportion of high-grade and above cotton in Hubei Province in 2019 is nearly 93%, and the overall level is good.

"From 2017 to 2019, the cotton quality in Hubei Province has been steadily improved. In 2019, the overall quality of Hubei cotton is the best in three years, among which, color grade, length, length uniformity and other indicators are at the highest level in three years. Hubei cotton is favored by enterprises in the local cotton market. " In the above analysis report.

In terms of cotton trade, Tianmen, Hubei Province, has formed a well-known cotton trading platform in China, with an annual storage capacity of about 1 million tons, and carries out various services such as cotton spot trading, consignment and storage, warehousing and logistics.

In the cotton textile industry, Hubei also has a number of enterprises with certain market influence. Hubei Jingtian Cotton Industry Group Co., Ltd. is the largest local cotton spinning enterprise. It has formed a one-stop business model from cotton acquisition, processing, spinning to weaving, with an annual spinning scale of 500000 spindles. At present, Hubei Xiaomian Industrial Group Co., Ltd. has 350000 ring spinning spindles, 2300 imported rotor spindles, 200 high-grade air-jet looms and 500 shuttle looms, with an annual output of 50000 tons of yarn and 23 million meters of grey cloth. Hubei Anmian Textile Co., Ltd. has a long history of 80000 phyll ring spinning, 936 rotor spinning and 302 looms with an annual output of 18000 tons of yarn and 18 million meters of grey cloth. Its main products include various types of "Ruyi" brand high-grade combed yarn, general combed cotton yarn, polyester cotton yarn and compact Siro spinning yarn.

However, the outbreak of new crown pneumonia this year disrupted the business rhythm of cotton and cotton textile enterprises in Hubei Province. Although cotton textile enterprises in Hubei Province have been returning to work and production since April, the epidemic situation abroad is still spreading, which has a far-reaching impact on the global commodity trade and the operation of the financial market. In addition, the domestic textile market has continued to face challenges such as poor demand since the epidemic. Generally speaking, since this year, Hubei cotton and cotton textile industry has suffered a major blow, including inventory, cost, cost, and other challenges Multiple pressures such as capital and return to work have doubled.

The above "analysis report" pointed out: "in 2019, the local cotton production in Hubei will shrink to a certain extent, and the spot sales price will fluctuate. Especially since this year, due to the impact of the new crown pneumonia epidemic, Hubei cotton acquisition and processing enterprises are under great pressure. A large number of textile enterprises are facing difficulties such as insufficient orders, declining efficiency and tight capital chain, and the survival pressure of small and medium-sized enterprises is great. On the whole, since this year, Hubei cotton textile industry has suffered heavy losses, with the loss area expanding and the loss degree deepening. Some textile enterprises take the initiative to transform the production of protective equipment and masks, in order to tide over the special difficult period and strive to survive the epidemic

Futures tools "stabilizing enterprises and ensuring agriculture" to help enterprises and cotton farmers develop

It is against the above background that Hubei securities regulatory bureau, together with Zheng Shangsuo, jointly hosted the "cotton sub forum" during the period of the "stabilizing enterprises, ensuring agriculture, escorting entities" commodity risk management (Hubei) forum.

"More stable development of enterprises under the influence of new market risk and more stable development of enterprises through new economic factors." According to the relevant person in charge of Zhengshang exchange, in order to implement the central "six guarantees" and "six stabilities" work requirements, and implement the work deployment of China Securities Regulatory Commission (CSRC) to serve the real economy, the action plan of "stabilizing enterprises, ensuring agriculture and escorting entities" was put forward. "Stabilizing enterprises" means actively guiding entity enterprises to use futures derivatives to manage risks, help market entities operate steadily, and ensure the stable operation of industrial chain and supply chain; "safe agriculture" means to give full play to the function of futures market, innovate financial support modes and ways, promote stable income increase of farmers, help to overcome poverty and Serve Rural Revitalization Strategy.

According to Wang zuoqiang, deputy director of Hubei securities regulatory bureau, in recent years, Hubei securities regulatory bureau has continued to promote the futures market to serve the real economy, strengthen market publicity and training, actively promote the listing of Hubei's advantageous futures varieties, vigorously promote the development of enterprise customers, assist more than 100 key enterprises to use the futures market for hedging, further promote the establishment of futures delivery warehouses, and strive to implement the "insurance + period" It has become the common aspiration of all kinds of subjects in Hubei capital market to construct and make good use of futures market.

"At present, with the new cotton season approaching, Hubei cotton and cotton textile enterprises have gone through several trials and tribulations, and their development is more solid. While speeding up the resumption of work and production, they are also more cautious and have more expectations for the future market. Of course, there are also some hidden worries." The relevant person in charge of Hubei cotton association said that the "cotton sub forum" was held to enhance the development confidence of Hubei cotton industry and cotton related enterprises.

Hubei Meierya Co., Ltd., located in Wuhan, is a textile and garment enterprise mainly engaged in foreign trade. It holds 45.08% equity of Meierya Futures Co., Ltd. Meierya futures is engaged in cotton futures and other related business, and its revenue in 2019 is 82.2215 million yuan, with a net profit of 22.484 million yuan. But since this year's epidemic, Meierya futures is facing pressure from capital and other aspects for a period of time.

In this regard, the relevant person in charge of Meierya futures told reporters: "since the outbreak of the epidemic, Zhengshang has given a lot of support to the company, such as exempting the handling charges for delivery and warehouse receipt transfer in a specific period, and supporting online investment and education, which has provided great help for the company to resume normal operation as soon as possible and complete the offline transfer of service mode."

According to the reporter's understanding, all along, the Zhengzhou Institute of Commerce has attached great importance to serving the economic and industrial development of Hubei Province. It has successively established 27 futures delivery warehouses and warehouses for 12 varieties of cotton in Hubei Province, identified two enterprises such as Wuhan Guanggu as the industrial base of Zhengshang Institute in 2020, and carried out more than 80 market training activities in Hubei Province. At the beginning of the outbreak of new crown pneumonia, Zhengshang Institute quickly donated 9 million yuan to Hubei to support the local anti epidemic and resumption of production; at the same time, it increased the support for the market activities of Hubei member units and actively helped the industrial enterprises in Hubei to tide over the difficulties.

"In recent years, the Yangtze River Basin has continued to rain, and the flood control situation is grim. According to the relevant requirements of China Securities Regulatory Commission, Zhengshang Institute is currently studying and refining relevant policies and measures to further support the recovery and development of relevant industries in Hubei Province. In the next step, the SSE will continue to promote product business innovation, continue to cultivate listed varieties, continuously improve the quality and efficiency of market service, and strive to expand the market opening to the outside world. " Zheng Shangsuo said the above person in charge.