Market Analysis: Narrow Fluctuation Of Futures Price Has Played A Stabilizing Role In Cotton Market

According to the Anhui Monitoring Station of the National Cotton Market Monitoring System, since November 18, the domestic cotton futures prices have basically fluctuated slightly around the 14000 yuan/ton pass, with limited room for rise and fall. This undoubtedly has a positive guiding role in seed cotton purchase and lint purchase of textile enterprises, which can be confirmed by the recent performance of the main cotton producing areas along the Yangtze River in Anhui.

According to the survey, in the middle of November, the main contract price of Zheng Mian fell for several consecutive trading days, from the highest 14230 yuan/ton to 13850 yuan/ton, with a drop of 380 yuan per ton, especially after falling below the integer threshold of 14000 yuan/ton, which has a great impact on cotton related enterprises. In order to avoid price risk, a few ginning plants chose to stop closing and wait, and ginning plants that insisted on purchasing reduced the purchase price of seed cotton by 0.03-0.05 yuan/jin one after another. The daily purchase of seed cotton was controlled, generally by about 20%, and more by 50%. At the same time, cotton enterprises lowered their lint price expectations and actively contacted customers to prevent risks. In order to prevent the price of lint from falling continuously, textile enterprises just need to purchase lint, and most textile enterprises have reduced their lint inventory to the lowest level.

The narrow fluctuation of future price has played a stabilizing role in the cotton market. On the premise of the recovery of market confidence, the cotton market has also shown a stable trend: first, the ginning plant that originally stopped harvesting resumed the purchase of seed cotton; Second, the purchase price of seed cotton has remained stable recently, with the mainstream purchase price of seed cotton being about 3.35 yuan/jin, whether it is the flower collecting station for quick collection and quick transportation or the ginning plant for processing lint. The price has stabilized, and the purchase volume of seed cotton has also increased by 20-30%; Third, the lint sales price did not fall further. According to the difference of lint quality, the sales price of lint is 14850-15050 yuan/ton.

Therefore, the current price stability in the cotton market is beneficial to both ginning mills and downstream textile enterprises. On the one hand, ginning mills dare to purchase in large quantities and sell in time; On the other hand, textile enterprises also take advantage of the period of lint price stability to increase the purchase volume and replenish inventory before the festival.