Put or deposit cotton prices fluctuate with policy

The supply of the cotton market, which has continued to loose, has a serious lack of confidence and oscillates back and forth with the policy. Yesterday, market rumors will be thrown 300,000 tons, and with the distribution of import quotas, causing the cotton market and the electronic market to fall. Subsequently, the person in charge of the China Cotton Storage and Cotton Co., Ltd. denied having dumped the rumors, and confirmed that the country will continue to open up storage and storage in 2012, and then went up slightly and walked out of a roller coaster market.

On the 18th, ** soon after the market opened, a rumor in the cotton market alerted the cotton traders. This rumors said that the National Development and Reform Commission will throw 300,000 tons of storage, and with the distribution of import quotas, causing the market price of cotton ** plunged. The cotton 1301 contract once fell to 19105 yuan / ton, a decrease of 1.82%.

However, shortly afterwards, the China Cotton Information Network released a news release saying that "there has been confirmation from the relevant parties that the country currently has no such plan. Please ask the cotton-related enterprises to take sensational rumors and prevent market risks." On the same day, China National Cotton Corporation was in Shandong. The province held a working conference for the 2012 reserve cotton business.

According to sources at the meeting, they told Brecken analysts that Wu Zhenwu, deputy general manager of China National Cotton Corporation, said at the meeting that the cotton market in the new year was open to storage and storage, and clarified the rumors of the dumping of the reserve. At the same time, China Cotton Reserve predicts that the 2012/2013 cotton annual cotton production will be 6.86 million tons, a year-on-year decrease of 9.1%; the forecast market will provide 12.9293 million tons of cotton, and the elimination of storage and other markets will provide about 9 million tons of cotton.

Affected by this, cotton ** rebounded in the session, the main 1301 contract closed at 19,405 yuan / ton, still down 60 yuan / ton from the previous trading day, a drop of 0.31%. This shows that investors are still cautious about the cotton market, which oversupplies in the later period.

Prior to the release of the latest report on supply and demand, the US Department of Agriculture estimated that 24.78 million tons of global cotton production and 23.73 million tons of consumption were still in a pattern of oversupply, with 15.76 million tons at the end of the year. Supply and demand situation has improved since last month, but the huge inventory is still the most important factor in suppressing cotton prices.

At present, there is a large price difference between cotton at home and abroad, with a low price of 83 cents/pound for the main port of India's cotton, a corresponding sliding import tariff of 14,360 yuan per ton, and an average price of only 93 cents for a better quality Australian cotton. Pounds, corresponding to sliding tariffs, import costs 15,600 yuan / ton, and the same level of domestic cotton spreads as high as 3,500 yuan / ton. In the absence of quota allocation, in 2011/2012 as of June, China has imported 4.7 million bales of cotton, accounting for more than 50% of global trade. Imports of cotton remain high, and domestic cotton demand is bleak. Traders are optimistic about the rebound of cotton under the support of storage and storage as the main driving force.

"The new year's cotton purchases and deposits continue to open up, and China's cotton market held at RMB 20,400/ton will again become the dumping ground for global cotton. If the downstream consumption situation is still not improving, China's cotton stocks will continue to rise." Ma Yingsai, an analyst at the Agricultural Consulting Group, predicts that China's cotton consumption will be around 8.2 million tons in 2011/2012, and ending stocks will be as high as 5.9 million tons, accounting for about 45% of global cotton stocks.

Ma Yingsai believes that the country’s cotton purchase price of RMB 20,400/ton has a far-reaching impact on the entire cotton spinning industry. China’s textile and clothing companies are facing the high pressures of raw materials and the continuous increase in labor costs, which are at a disadvantage in the global competition. The fear of loss in the garment industry will continue to increase, and the textile industry will inevitably shuffle.