Global Inventory Pressure Is Huge, Cotton Price Is Very Difficult To Rise.

The US Department of agriculture's report in November revised the forecast data a lot. The global cotton production was raised by 52 thousand tons, and the global cotton consumption was increased by 37 thousand tons.

A series of cotton historical data in Burma has been adjusted to make its output, consumption and inventory reach the level of 2000/01, thus increasing the global initial inventory in 2014/15 by 54 thousand tons.

In early November, China's cotton policy reform was further clarified.

The new regulations contain details of support for cotton farmers in the mainland.

In 2014/15, cotton farmers from 9 major cotton producing provinces except Xinjiang will enjoy a subsidy of 2000 yuan yuan / ton.

From next year, the cotton farmers in the mainland will follow

The subsidy will be subsidized at a certain rate of 2000 yuan per ton.

Before some

According to reports, the subsidy will fully inhibit the decline in cotton planting area outside Xinjiang in the 2015/16 year.

From a global perspective, next year's cotton planting area is expected to be more complicated.

Since the year of 2012/13, global corn and soybean prices have declined significantly.

The fall in the price of cotton competitive crops has reduced the possibility of a sharp decline in cotton planting area next spring.

However, the recent fall in cotton prices will also lead to a decline in cotton planting areas in some cotton growing countries.

Any fluctuations in the global cotton growing area will evolve into cotton price fluctuations.

However, the current record of the end of the global cotton inventory and the Chinese government's claim that it will be properly placed to ease the upward pressure on cotton prices will weaken the impact of planting area on cotton prices.

The biggest uncertainty this year is that cotton will come from

How much market share has been seized?

Globally, cotton prices can compete with polyester.

In China, although the price gap is shrinking, the cost of using cotton is still higher than that of polyester.

As China is the world's largest consumer of cotton and chemical fiber, the proportion of China's fiber consumption will affect the proportion of fiber consumption worldwide.

The quicker the recovery of cotton use in China, the faster the global cotton inventory will decline.

However, because China's end to end inventory consumption ratio is close to 165%, the end of the world inventory consumption ratio is close to 95%. Even if the cotton consumption increases substantially, the end inventory will still be significantly higher than the historical average in the next few years. Therefore, the global cotton price is unlikely to rise in the near future.