Cotton Prices Are Difficult To Shake Off High And Volatile &Nbsp; Attention Should Be Paid To Dumping And Quota Policy.

In the past, the normal price range of cotton price was 13500-15500 yuan per ton.

In June 19th, the people's Bank of China announced that it would further promote the reform of the RMB exchange rate formation mechanism and enhance the flexibility of RMB exchange rate.

If the RMB appreciates more than 5%, the domestic cotton market will be double suppressed by the competitiveness of imported cotton and the decline of textile industry demand.

Statistics show that the export dependency ratio of China's cotton textile, wool textile and garment industry is 20%, 27% and 60% respectively.

If RMB appreciation is 1%, the operating profit of export products of cotton textile, wool textile and garment industry will drop by 15.96%, 8.4% and 10.3% respectively.

If we consider the degree of dependence on exports of every industry and RMB appreciation by 1%, the overall degree of damage to the cotton textile, wool textile and clothing industry will be 3.19%, 2.27% and 6.18%% respectively.

Short term attention to regulatory information

At present, China's cotton 328 price index is 18360, a record high, mainly depends on the basic supply and demand of cotton, and the price stays high for a long time, which shows that domestic stock is in a tight state.

Therefore, the cotton association of China made a statement in June 18th, referring to the relevant departments in actively coordinating the pport of Xinjiang cotton, and will introduce relevant regulatory measures to meet the textile demand, maintain market stability, and implement the new and old year's cotton over balance.

The market has once been rumoured that the country will throw 600 thousand tons of national cotton reserves in the near future, and the price of dumping and storage is likely to be limited, which will have a big negative impact on cotton spot and futures contracts.

In the short term, with the increase of the replenishment of textile enterprises, the tight supply situation of domestic cotton is more obvious, and spot cotton prices continue to rise.

Considering that cotton resources in the market are decreasing day by day, it is very difficult for cotton to break away from the high and high concussion zone.

Therefore, cotton throwing and foreign cotton quota policy is a key factor in the short term cotton market trend.