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Discussion On The Cyclical Nature Of International Cotton Prices

2008/7/22 0:00:00 58

Abstract: Taking the average annual price of international cotton in recent forty years as the object, this paper discusses the cyclical nature of international cotton price fluctuation, and analyzes the causes of its cyclical fluctuation. The corollary is drawn: the world cotton end inventory consumption ratio fluctuation cycle is the main reason for the cyclical nature of the international cotton price fluctuation, and the two have a strong negative correlation. Under mild inflation, the fluctuation of world economic growth rate is more consistent with the international cotton price fluctuation; under severe inflation, the impact of inflation on international cotton price is more decisive than the inflation induced economic recession on the international cotton price, which will promote the rise of international cotton prices; in the light of the current cotton market situation, the international cotton price is in the rising stage.

In a market economy, the cyclical nature of economic process means that the changing process of economic variables is controlled by a certain mechanism, and is embodied as a regular form or pattern. At the same time, economic process is different from objective physical process. It may be influenced by some stochastic factors, such as climatic factors, political factors, psychological factors, etc. Therefore, in the course of the whole economic operation, the change of an economic variable may be dominated by periodic rules, showing a more obvious upward trend, downward downward, and then upward upward cyclical movement, with obvious rules. At the same time, it will be found that this rule is not simply repeated, and each repeating unit will be different.

As an important economic variable, price is not only affected by supply and demand factors and changes, but also influenced by the psychological factors and changes of participants, and it will also be influenced by inflation and other factors. Together, these factors form a mechanism that affects prices. If this price fluctuation is cyclical, it is possible to predict the future price trend from the historical price trend.

As one of the most important economic crops in the world, cotton, as one of the most important textile materials, is in a more competitive market economy environment, regardless of its trade or textile industry. This article will take the international cotton price CotlookA index (annual average price, 1969/70 year 2008/09 year) as the object, from the international cotton price (nominal price) cyclical existence, the international cotton price cycle causes, as well as the international cotton price cyclical to the present cotton market enlightenment three aspects to discuss the cotton price cyclical. In this discussion, the data required are shown in Table 1.

Table 1 unit: cents / pound

Cotton year	NCotlookA	S/U	GDP year	ACotlookA	RACotlookA	RGDP/%
Cotton year	NCotlookA	S/U	GDP year	ACotlookA	RACotlookA	RGDP/%
1969/1970	Thirty-one point three three	Zero point three nine
1970/1971	Thirty-one point one	Zero point three eight
1971/1972	Thirty-seven point one five	Zero point three eight	One thousand nine hundred and seventy-one	Thirty-three point one two	Forty-three point seven two	Four point six
1972/1973	Forty-one point nine five	Zero point four one	One thousand nine hundred and seventy-two	Thirty-eight point seven five	Forty-five point three five	Five point four
1973/1974	Seventy-six point five	Zero point four three	One thousand nine hundred and seventy-three	Fifty-three point four seven	Fifty-three point four seven	Six point nine
1974/1975	Fifty-two point five	Zero point five eight	One thousand nine hundred and seventy-four	Sixty-eight point five	Sixty-one point seven nine	Two point eight
1975/1976	Sixty-five point three	Zero point four three	One thousand nine hundred and seventy-five	Fifty-six point seven seven	Forty-four point eight one	One point nine
1976/1977	Eighty-one point eight five	Zero point four	One thousand nine hundred and seventy-six	Seventy point eight two	Fifty-four point nine five	Five point two
1977/1978	Sixty-five Point Zero Five	Zero point four five	One thousand nine hundred and seventy-seven	Seventy-six point two five	Fifty-three point three six	Four point four
1978/1979	Seventy-six Point Zero Five	Zero point three eight	One thousand nine hundred and seventy-eight	Sixty-eight point seven two	Forty-one point zero two	Four point six
1979/1980	Eighty-five point four	Zero point three seven	One thousand nine hundred and seventy-nine	Seventy-nine point one seven	Forty-one point four nine	Three point eight
1980/1981	Ninety-four point two	Zero point three five	One thousand nine hundred and eighty	Eighty-eight point three three	Forty point nine	Two point one
1981/1982	Seventy-three point eight	Zero point four one	One thousand nine hundred and eighty-one	Eighty-seven point four

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