Zheng Cotton'S Weak Equilibrium Expects Breakthrough In Direction

Under the influence of bad macroeconomic regulation and control policies and the increase of supply, the price of Zhengtian cotton, which was pushed up by funds, dropped sharply, of which CF1009 dropped from a maximum of 17635 yuan / ton in January 4th to a minimum of 15705 yuan / ton, or 10.9%.

What factors should we pay attention to at this stage and in the later stage and how to change cotton prices?

Policy regulation promotes rational regression of cotton prices

At the beginning of 2009/10, the new cotton market was facing the situation of tight supply, delayed listing time, soaring seed cotton purchase price and high lint costs. This led to a sharp rise in the current cotton price in the off-season, which is very similar to that in 2003/04, but this year the situation was caused by the decrease in planting area and the delay in the listing time, and the 2003/04 year was a sharp reduction in production.

However, at the beginning of the new year, the state issued unexpected macroeconomic control policies ahead of schedule. In addition, the supply of cotton (15315, -95.00, -0.62%) was eased due to the 1 million 894 thousand tons of import quotas, the purchase of large quantities of imported cotton and the purchase of goods in the early stage and the participation in the auction of national cotton reserves.

These reasons promote the rational regression of Zheng cotton price, return to spot price and show a weak equilibrium.

Textile enterprises to enhance cost tolerance

In the global tide of crisis, China's domestic sales situation was gradually opened in 2009, and the domestic sales of textile and garment industry were very bright and bright, supporting half the sky.

The contribution rate of textile exports to the growth of the whole industry has been reduced, and domestic demand has just made up the gap.

Recently, the author investigated and understood that from the fourth quarter of 2009, cotton spinning enterprises had sufficient orders, started at full load, and the average profit per ton of yarn was about 2000 yuan, while the finished product inventory was relatively low, and the cash flow of textile enterprises was better.

If cotton accounts for about 60% of the cost of cotton yarn, the cost of cotton can be as high as 3000 yuan per ton.

Therefore, textile enterprises can withstand higher cotton prices. Rough calculations are based on the current spot price of 15000 yuan / ton, which can bear the highest cost of 18000 yuan / ton.

Mid term supply remains tight.

At the present stage, the supply and textile pre purchase inventory will be digested after 2-3 months, and the supply of cotton will reproduce the tension.

The only way to control the country is to increase cotton reserves and increase import quotas.

At present, after 2 million 600 thousand tons of dumping and storage, the national cotton inventory is 1 million 500 thousand tons, so it can be used for a limited amount of regulation.

The issuance of import quotas is a double-edged sword. Although it can increase domestic supply, it will stimulate the international cotton price.

2 months later, that is, 4 and May belong to the cotton growing period. The state generally does not introduce cotton control policy. Planting area is one of the hot spots in the market.

In addition, the textile industry will return to work in full and the production of orders will start in the summer, and cotton prices will be encouraged to rise or rebound once the supply demand increases.

At the same time, as the domestic supply situation is again tense, the increase of sliding quota import quota has caused resonance at home and abroad.

Beginning in June, cotton prices will decline sharply due to the impact of pre quota quotas on the purchase stage or in coming to Hong Kong, cotton demand in the off-season, a large number of warehouse receipts and cotton growing areas.

From mid September to December, weather factors became the focus of attention. In addition, foreign Christmas orders and winter clothing orders came one after another. Consumer demand was once again dominant. At the same time, new cotton and old cotton were used alternately. If the new cotton market did not go smoothly, and the supply was tight, cotton prices would probably come up sharply.