Cotton Prices Under The New Pattern Of Cotton Prices Suddenly Changed Face

It is understood that in 2016 the world's cotton planting area is 440 million mu, and this year the global cotton planting area is picking up, and it is expected to rise to 530 million to 540 million mu in 2018.

The increase is expected to be strong, the downstream demand is good, and the price gap between inside and outside is narrow.

At present, the domestic cotton market has ushered in the new season of cotton growing season. Meanwhile, the sale of national cotton stores is booming. The target price of cotton in the new season will be three years.

Under the new pattern of cotton market at home and abroad, what strategies should the cotton industry enterprises adopt to cope with the new market changes? Will cotton prices suddenly change their faces? How will the majority of cotton spot investors intervene in the face of new opportunities?

A new season cotton area and yield is expected to increase considerably.

At present, the main cotton producing areas in China are planting a peak period, and farmers in the producing areas are actively investing in the spring ploughing production.

The information about cotton planting area, expected output and new cotton production situation in the new season has become the focus of market attention. Relevant market investment institutions and other related operations have been carried out on cotton futures forward contracts, and spot traders have made adjustments to raw materials inventory.

What will be the development prospect of the new cotton market in the new century?

Cheng Jie, deputy director of China cotton storage information center, held in April 27th at the Eighth China Cotton (yarn) futures forum held in Hangzhou, said that from the current understanding of the domestic and foreign cotton market, the new cotton growing area in the new season is picking up, and the fastest rise in 2018 will be 530 million to 540 million mu. The speed of the recovery of the global cotton planting area will exceed the expectation.

From the results of the survey of cotton planting intentions in the domestic producing areas, the new cotton planting area in the new season is 46 million 30 thousand mu, an increase of about 2000000 Mu compared with the same period, an increase of 5%.

"From the past few years, the whole country and Xinjiang,

The change shows that the cotton planting area in Xinjiang and the mainland has increased slightly, of which the northwest region has a larger increase year by year, followed by the the Yellow River River Basin, and the Yangtze River Basin has a lower growth year on year.

Cheng Jie said that the main cotton producing provinces of Jiangsu and Gansu ranked slightly in this year's changes. Gansu may be slightly higher, and the cotton planting area in Henan is reduced somewhat.

According to Cheng Jie, the global cotton planting area has shown strong cyclical changes in the past 30 years.

From the time when the global cotton area rose from its trough to its peak, the world's lowest cotton area in 1993 was 461 million mu, and it reached 539 million mu in 1995, which took two years in the middle.

In 2002, from the lowest point 462 million mu to 536 million mu in 2004, it is also two years.

From 2010 to 2012, from 453 million acres to 542 million acres is two years.

This reflects a feature that cotton tends to pick up faster.

In 2016, the global cotton planting area was 440 million mu.

Judging from the current situation at home and abroad, the global cotton planting area is picking up this year. With reference to the historical experience of the previous cycles, it is possible that the cotton crop will rebound to 530 million to 540 million mu in 2018, and the speed of the global cotton planting area will increase or exceed our current expectation.

"In the past few years, the global cotton planting area is basically fluctuating between 440 million and 540 million mu, which may be slightly lower in 2015, but overall fluctuating in the horizontal area.

The cotton planting area in China has basically gone down in the past few years.

In 1999, China's cotton planting area was 55 million 880 thousand mu. In this year, the cotton circulation system was reformed in China. In the following years, the cotton planting area of China increased continuously, and the highest recovery in 2008 was about 88000000 mu. After that, the total number of cotton growing areas decreased, and the number of cotton growing areas decreased to 43 million 850 thousand mu in 2016.

Judging from the big trend, the cotton planting area in China is going down.

However, at present, the domestic cotton market is pushing forward the reform of the target price system. What will this policy affect the domestic cotton production? What is the concept compared with the cotton circulation system reform in 1999, which needs our attention.

Cheng Jie said that Xinjiang cotton planting area basically fluctuated in the range of 24 million to 34 million mu, the bottom was constantly rising, and the cotton planting area in the mainland returned to 15 million mu from the highest about 60000000 mu. The gap is relatively large, which is also the reason why the cotton planting area has been decreasing in the past few years in China.

In the middle and April of last year, the reporter conducted a market research on crop cultivation in the main cotton producing areas of Hubei, Hebei, Shandong and Henan. From the analysis of the reporter's understanding, the probability of a sharp rise in cotton planting area in the mainland is very low.

First, the relevant agencies in the mainland for cotton farmers and cotton prices basically did not introduce a large subsidy and support policies, cotton farmers income is not very stable, local farmers' enthusiasm for planting cotton can not be improved.

The two is the serious loss of the rural labor force in the rural areas of China.

Three, cotton cultivation and harvesting in Xinjiang's main cotton producing areas have basically realized mechanized operation, and the quality of cotton has been greatly improved, while the degree of mechanization of cotton production in the mainland is relatively low, and the yield and quality of cotton production are not greatly increased, and the production cost is relatively high.

Four, farmers have higher income from planting other crops, and the price of cotton planting is not high.

Five, the cotton industry in the mainland is pferring to Xinjiang and Southeast Asia on a large scale. The industrial chain can not be improved and linked, and the prospects for industrial development are dim.

Based on the information analysis of planting area and expected yield in the global and domestic cotton market, market participants believe that there is a difference between the global and domestic cotton planting and production expectations. The industry and the large spot investors should fully grasp the future market production and demand situation, and make targeted analysis.

B cotton demand for downstream products is getting better.

Wang Qingcui, vice president of the China Cotton Textile Industry Association, said at the Eighth China Cotton (yarn) futures forum that the market research conducted by the association from 3 to April showed that the overall production and operation situation of our cotton textile industry in 2016 was better than that in 2015. Especially after the Spring Festival this year, the overall production and operation situation of the industrial enterprises was relatively smooth, and the confidence of the market has also improved significantly.

"After the Spring Festival this year, orders for domestic textile industry increased by 5% - 10% compared with the same period last year."

Wang Qingcui said that the cotton textile industry association tracking more than 200 enterprises, capacity accounted for about 50% of the industry.

Compared with 2015, the output of cotton yarn increased by 1.1% in 2016, and the output of cotton cloth increased by 0.36%.

From 1 to March this year, the output of cotton yarn increased by 4.08% compared to the same period last year, and the output of cotton cloth increased by 1.1%.

At the same time, from the product sales situation, compared with 2015, sales of cotton yarn and cotton cloth basically increased by about 2% in 2016.

From 1 to March this year, sales of cotton yarn increased by 1.6% and cotton cloth increased by 2.35%.

Wang Qingcui believes that the production and sale situation of cotton yarn and cotton cloth is relatively good in the first quarter of this year. From the point of view of enterprise efficiency, the cotton textile industry association's tracking business efficiency increased by 4% in 2016, and increased by 5% in the first quarter of this year.

From the analysis of corporate profits, 2016 is slightly better than that of 2015. The profit margin of the first quarter of this year has increased by 0.3%, and the deficit of enterprises has decreased by 2.6%.

However, exports are not very optimistic, which should attract market attention.

Wang Qingcui introduced cotton textile exports in 2016 down 6.6% compared to the same period last year.

From 1 to February this year, cotton textiles and clothing decreased by 7%, and the export situation is still grim.

"Fortunately, the confidence of the whole industry is still better."

What is particularly noteworthy is that Wang Qingcui introduced the new development trend of the domestic cotton textile industry at present, which is mainly concentrated on the following aspects: first, the enterprise's product innovation consciousness is enhanced, and the product attachment is worth improving.

It is understood that many enterprises have invested more energy in product innovation and so on, and the improvement of enterprise efficiency and so on mainly benefit from these aspects.

The two is the steady increase in the amount of cotton used in the cotton textile industry, estimated at 7 million 550 thousand tons in 2016, a lot more than in 2015.

Three, the pace of enterprise pformation and upgrading is accelerating, and the level of enterprise automation has improved significantly.

Four, the trend of export decline is more obvious. That is to say, the situation in the international market is still not optimistic, and the pressure on downstream cotton products is still relatively large.

Five, the growth rate of imported cotton yarn has slowed down. This indicates that the market competitiveness of domestic cotton yarn has been improved to a certain extent, and the operation of the whole industry is steadily improving.

Wang Qingcui believed that

There are three reasons for the steady and good development trend. First, thanks to the reform of the supply side and the deepening of the inventory work, the economic situation has stabilized steadily, and the development of the entire textile industry has had a good external environment.

Two, the cotton policy has been greatly adjusted, which makes the price difference between domestic and foreign cotton market shrink obviously, the cost of cotton production and the competitiveness of textile enterprises have been improved, and the implementation and timely adjustment of target price policy and timely delivery of national cotton reserves provide a strong support for the stability of market cotton prices, and ensure the stable supply of raw materials and stable prices of textile enterprises, so as to enhance the competitiveness of textile enterprises.

Three, after the baptism of market economy, the surviving cotton textile enterprises have undergone structural adjustment and pformation and upgrading, and enterprises have some core competitiveness of their own.

However, some enterprises have reflected that the current sales situation is relatively smooth, which may be mainly a pull of the front end, but the demand for the back end has not been clearly started. The main performance is that the price pmission is still lagging behind.

In addition, the growth of sales profits of enterprises is not obvious, and the market is still fragile.

C new changes in cotton, cotton yarn and spot market at home and abroad deserve attention.

China is a big country of cotton consumption and import, and the market structure with insufficient production needs to exist for a long time. Therefore, the change of the price difference between cotton and cotton and yarn and spot market at home and abroad is of great importance to the rise and fall of cotton prices. The increase and decrease of cotton and cotton yarn imports and exports, including the import and export situation of downstream products such as cotton cloth and clothing, will have a significant impact on cotton prices.

Reporters from the Eighth China Cotton (yarn) futures forum learned that the current domestic and foreign cotton and cotton yarn spreads are relatively small, cotton and cotton yarn import and export more normal.

At the same time, the number of cotton warehouse receipts in Zhengzhou cotton futures market is large, and there is no small pressure on the disk surface.

Some cotton traders told reporters that the cotton in the hands of hoarding was basically sold in Zheng cotton market. If the futures fell and spot sales turned better, they would be sold in time and sold in the spot market. If the spot market price did not improve, it would be delivered directly.

Feng Mengxiao, chief economist of China cotton storage information center, thinks that the inventory speed of domestic cotton market is faster than that of global cotton production.

From the balance of supply and demand, the domestic cotton market will gradually shift from oversupply to balance or even tighter supply.

There is a strict quota management system for cotton imports in China. In the long run of the gap between production and demand, the relationship between supply and demand will form a market trend with global market segmentation and regional characteristics.

At present, the domestic textile enterprises are in a good position, the output of cotton yarn and other products is increasing, and the gap between production and demand of cotton city will increase.

The growth rate of global cotton market is not fast enough, but the growth rate of production is faster than that of domestic expansion. Therefore, there may be a divergence between domestic and foreign cotton markets.

The recovery of foreign cotton consumption market may lag behind the domestic warming rate, and there will be a speed difference on both sides.

Industry professionals believe that the difference between domestic cotton and cotton yarns is beneficial to the domestic textile industry as a whole, which has made room and time for the pformation and upgrading of domestic textile enterprises.

It is worth noting that the supply and demand pattern of domestic and even global cotton market is bound to have a relatively large change, and the market situation in the future will be more complicated.

Because domestic and foreign cotton production and demand structure is inconsistent, plus import quotas and other policies, the domestic cotton market will be full of variables in the future.

Wang Qingcui said that after the domestic cotton market went out of stock, cotton planting area and planting structure, inventory structure and so on were steadily adjusted, and inventories were significantly reduced.

At the same time, cotton spinning industry is facing a contradiction, that is, the structural contradiction of cotton supply.

Because of the quicker pace of pformation and upgrading of textile enterprises, the demand for high-quality cotton has increased significantly.

In addition, textile enterprises can not compete with foreign enterprises in making low-grade cotton yarns. If cotton textile enterprises want to develop, they must take the road of structural upgrading and occupy the market with high-quality cotton yarn.

"There will be a marked increase in the demand for high-quality cotton in the domestic cotton market in the future. The current sale situation of the national cotton auction sale has already explained this point.

It is estimated that the structural contradiction of cotton supply in recent years is a major problem facing the domestic cotton market. It is suggested that under the condition of ensuring the steady increase of cotton output and quality, the relevant agencies can appropriately increase the import quota of general trade and gradually liberate the international market, thus ensuring the demand of textile enterprises for cotton consumption and making the enterprises in the whole industrial chain develop stably and continuously.

Xiao Guoping, chairman of Yongan GF Asset Management Co., Ltd. believes that the overall supply situation of the domestic cotton market is better than in previous years. The improvement of market supply has much to do with the throwing of more than 600 thousand tons of national cotton reserves last year.

Last year, because of the high cotton price, the sale of national cotton stores was delayed for one month.

It is estimated that there will be no big market for domestic cotton market this year.

"From the point of view of Zheng cotton base structure, the price of the cotton register has a strong attraction, making warehouse receipts very cost-effective, resulting in the current cotton warehouse warehouse volume to about 300 thousand tons."

Xiao Guoping said that from the analysis of the situation of cotton market in China, the cotton market in China will be relatively calm this year under the situation of large quantity of cotton warehouse receipts. But in the future, when the stock of cotton stocks returned to normal level, the domestic cotton market might not be too calm after the overall inventory of cotton city continued to decline.

"It is hard to say that cotton prices will not rise this year," he said.

Xie Qiyu, chairman of the board, believes that the increase in cotton warehouse receipt has been greatly related to the fact that cotton is not sold in the spot market.

"Cotton prices are not up, mainly because the market is expected to increase cotton planting area in the new season."

Xie Qiyu said that the planting area of cotton in the United States will increase, and the domestic cotton planting area will increase. Next year, the market performance will be more stable.

In addition, the delivery benchmark of Zhengzhou cotton city will be pferred to Xinjiang in the future, which will greatly facilitate the delivery of investors.

D cotton prices will be difficult to break ahead for some time to come.

Xu Xiaoqing, director of macroeconomic strategy at Tun & amp; Asset Management Limited, believes that commodity prices have basically been showing a downward trend in the past 5 years after peaking in 2011.

Commodities began to rebound at the end of 2015, and the rally was basically higher than any previous bull market.

Since the beginning of this year, the price of industrial products has dropped by 13%. Although we feel that we have dropped a lot, the actual price is actually in the latter half of last year's fourth quarter. It just dropped about 1/3 of last year's increase.

Agricultural products (000061, stock bar) were weaker in the beginning of this year, especially in oils and fats.

In his view, the current trend of commodity prices can be defined as a bear market rally, but this rally seems to be coming to an end.

"There is a significant difference in the performance of agricultural products and industrial products."

Xu Xiaoqing said that the correlation between the prices of agricultural products and industrial products was not very strong. Before 2008, sometimes you could see that the trend of agricultural product prices was opposite to that of industrial products, such as 2004 to 2006, when the prices of industrial products increased, agricultural products fell.

After 2008, we can see that the price of industrial products and the trend of agricultural products are highly consistent, and the macro attributes of agricultural products are indeed increasing.

"Theoretically, there should be little relationship between the demand supply of agricultural products and the supply and demand of industrial products, and from the perspective of price trend, it can be found that the correlation is greatly improved."

Feng Mengxiao believes that the core power of the domestic market in 2016 is the structural reform of supply side.

As for the cotton market, as the scale of the national cotton store goes out, the inventory consumption ratio of China and the world will continue to decline, providing support for cotton prices. "But the deadline is at the end of 2016/2017, when the 2017/2018 year ushering in a productive year, the market situation will be different."

"In view of the change in the financial environment from loose to neutral, the focus of this year's market will be reflected in deleveraging."

Feng Mengxiao said, "in the context of the shortage of industrial chain terminal and the superposition of capital factors, the capital turnover of enterprises in the industrial chain will face a periodic test. The so-called periodic test is a good time off, and it is possible to form a so-called pulsatile effect."

Reporters integrated some market investment institutions on the cotton market price rise and fall expectations found that the current market generally believe that the supply of cotton market situation is better, but demand has not given a stronger signal, if we take into account the national cotton auction sales ready, new season global and domestic cotton planting area is expected to increase, the number of cotton warehouse is high, and so on, the short term cotton prices to new high probability is very small, in the next period of time, domestic spot cotton prices will show an oscillating trend.

The price range of Zheng cotton price range given by senior market analysts is 13500 - 16500 yuan / ton.

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