Multinational Giants Enter The Domestic Cotton Difficult To Have The Right To Speak.

At present, domestic cotton enterprises are generally worried about selling, but Louis, such as Da Fu, and other multinational enterprises have acquired large quantities of domestic cotton and gained huge profits in the futures market. Their skilled marketing skills have shocked domestic cotton producers.

In the eyes of domestic cotton traders, what role do pnational giants play?

What are the possible implications of their involvement in cotton industry in China?

Transnational giants change their faces to make up lessons for Chinese Enterprises

In recent years, domestic cotton has been selling hard, and Louis Dagh and IGAM, which are qualified for acquiring cotton in China, have not only participated in the operation of domestic cotton, but also made huge profits in the cotton futures market. Their operating conditions have been in sharp contrast to the vast majority of domestic cotton enterprises.

At present, almost all foreign agricultural products traders who carry out cotton business in China have specialized trading seats in Zhengjiao exchange.

Foreign businesses such as Louis Da Fu affect domestic spot prices through domestic and foreign futures markets, but also affect domestic futures prices by importing cotton and cotton purchased in China, and gain huge returns in two markets, futures and spot.

In particular, their operation skills and earning skills in the futures market have shocked many domestic cotton enterprises in distress.

In the "dancing with Wolves", accustomed to the "face to face" paction of domestic cotton business, whether capital, marketing means or experience, can not compete with it, the disadvantage has been revealed.

"The price of foreign businessmen buying cotton from some domestic enterprises is almost the same as our selling price, but they are able to get substantial profits, while the same cotton is difficult for us to sell, not to mention making big money."

A cotton trader in Xinjiang said dismayed.

While shouting "wolf coming", some cotton traders in China also do not deny that the pnational giants who are skilled in the two markets of spot and futures are both "wolves" who are armed to the teeth, and are also worthy of learning.

And their global purchasing and global sales means and strength are even more enviable for domestic cotton merchants.

Over the past three years, Chen Tao, chairman of Louis Da Fu China, has conducted hundreds of lectures on how to make soybean and cotton futures business.

Wang Ye, general manager of Hubei Yinfeng cotton Limited by Share Ltd, said that they have brought advanced operational means and ideas, which undoubtedly gave us a lesson, which is conducive to domestic cotton enterprises to keep up with the international advanced level.

From this perspective, it is not excessive to call them "teachers".

Foreign businessmen explore another way to continue to expand the market.

In view of the massive influx of cotton into China, resulting in frequent fluctuations in domestic cotton prices and blocking nearly 100 million farmers' income increasing channels, the state has implemented the "sliding tax" policy in recent years, stabilizing domestic cotton prices and importing cotton quantity.

The multinational producers of agricultural products who are not satisfied with the operation of other countries' cotton have also begun to adjust their strategies and step into China's cotton acquisition field.

Due to the relatively few domestic cotton enterprises involved in futures trading, a considerable part of the "standardized sale and purchase agreement" has been held by multinational cotton traders such as Louis Dagh in the cotton futures market.

In recent years, Wang Yuansu, a research and development expert who has been providing domestic cotton consultation for these multinational enterprises, is responsible for this business, said China's cotton futures price has now basically depended on the situation of textile exports and the operation of these pnational giants in the domestic market.

According to the Hubei branch of the Agricultural Development Bank of China, only Louis Da Fu bought forty thousand tons of cotton in Hubei since September last year.

According to some cotton enterprises in Xinjiang who have business dealings with Louis Da Fu, the international agricultural trade giant also acquired less than ten thousand tons of cotton under the "secret" purchase of local enterprises in Xinjiang over the same period.

These cotton futures market or "hedging" or speculative trading, although the amount is not large, but the annual only 200 thousand tons of cotton delivery total futures market, the impact can be imagined.

It is worth noting that Louis Dagh, who is currently in the cotton futures market in China, is one of the makers of "tragedy" in China's soybean industry a few years ago.

Before and after 2004, the international agricultural trade giant seized the opportunity of domestic squeezing enterprises' embarrassment and took the form of mergers and acquisitions, equity participation and joint ventures to control most of the domestic soybean crushing enterprises.

Ji Guang Po, senior director of the research and Development Department of the Zhengzhou commodity exchange, said: "it is difficult to assess whether the practices of these multinationals have posed enough threat to China's cotton industry at the moment, but the speed and scale of their expansion into China should attract enough attention, especially in the field of acquisition and processing.

But unfortunately, there is hardly any functional department or institution in China to track their movements.

Vigilance against domestic cotton pricing discourse aside

Some people in the industry believe that China's textile exports still need to import large quantities of cotton, and under such circumstances, the domestic cotton industry is more easily controlled by others.

If they go too far in the field of cotton purchasing and processing, China is likely to gradually lose the right to speak domestic cotton prices.

Ji Guang Po analysis said: "once they control domestic cotton resources in large quantities, the effect of national control measures will be greatly reduced, and domestic enterprises will not be able to continue to compete with them."

In the winter and spring of this year, domestic oil prices have been in turmoil. A large number of foreign oil controlled enterprises have ignored our government's price fixing measures, or privately increased their prices, or hoarded no shipment, so their ability to manipulate the market can be seen.

Zhou Jianqiang, the two deputy general manager of the Agricultural Development Bank of China, said that at present, the Chinese government is only allowing foreign businessmen to participate in the acquisition and operation of cotton, and has not yet approved their establishment or acquisition of cotton processing enterprises. Therefore, it is difficult for them to control the whole cotton flower industry by intervening in the cotton processing field.

But he also said: "it is not possible to exclude the possibility that these multinationals have infiltrated into the cotton processing industry, because they are most likely to drill into the" empty space "of the policy.

According to some cotton traders in China, the multinational agricultural products giants such as ICAM cotton group were early in the script src=>