Three Factors Leading To A Fall In Cotton Prices

After the Spring Festival

The production of spring plowing has gradually started, but in recent years

The trend has disappointed cotton farmers.

Since mid February,

Period price continued to fall, currently lingering around the 10000 yuan / tonne pass, the far month contract yesterday closed below 10000 yuan / ton.

Futures Daily reporters interviewed some ginning plants and textile enterprises to understand that the factors leading to the fall in cotton prices are more complicated, mainly for three reasons.

First, the current market is very concerned about how to store the national cotton reserves. Many cotton companies worry that the large number of low cost stores will further lower cotton prices. This is also the main reason for the recent decline in domestic cotton prices.

Two, the domestic and international economic growth prospects are still not optimistic. The demand for downstream cotton products is sluggish, and the continuous decline of international cotton prices has a great impact on domestic cotton market.

Three, the domestic textile industry is in a period of pformation. The order of enterprises is decreasing, the purchasing intention of cotton is not strong, and some factories are moving out, which has affected the growth of cotton demand.

"The market is worried about the increase of the national cotton reserves. This year, we should vigorously promote the structural reform of the supply side of agricultural products, and we must accelerate the digestion of the large inventory of agricultural products. The cotton market parties have strong expectations for the national cotton reserves."

Zhang Wenmin, general manager of Huaxin Wanda futures cotton industry division, told reporters that as of now, the state cotton stocks up to 11 million tons, enough to meet the domestic cotton market demand for a year and a half.

In the interview, reporters also learned that the storage time of the national cotton store may be ahead of schedule this year, and the market expects that the sale of national cotton and cotton will start in April, and the sale will only begin in July last year.

The export price of national cotton reserves may be calculated on the basis of the weighted average of China's cotton price index and China's cotton import price index.

At present, there are great differences in the price trend of domestic cotton in the late stage.

Although some institutions are still looking at the price of cotton, but because the domestic cotton price has been in line with the cost of imported cotton, and the domestic cotton planting area is expected to continue to decrease, many cotton enterprises think cotton prices are close to the bottom.

From China's customs and other departments released data, last year and January this year, China's textile and clothing exports showed a structural decline.

Due to the disappearance of the traditional export advantage and the internal and external unfavorable factors, the export volume of knitted and woven garments in China has dropped considerably.

At the same time, China's cotton yarn imports are still growing rapidly. The market anticipate that cotton yarn imports will continue to grow rapidly before the domestic and foreign cotton price spreads still exist, the quota of imported cotton is limited and the quality of domestic cotton is uneven. This will have a greater impact on domestic cotton prices.