The Trend Of International Cotton Price Is Affected By Inventory Pressure.

Recently, the US Cotton Corp wrote that as the new cotton harvest in the northern hemisphere came to an end, market focus began to shift to cotton planting area in 2015/16. The National Cotton Association (NCC) is currently investigating cotton planting intentions of growers, and the results will be announced in February 7th.

Although the intention of US cotton planting area will decline, the improvement of planting conditions in Texas will partly offset the impact of this positive effect. In 2014, the rainfall in Texas was more than the average in previous years. If the rainfall was kept in 2015, the rate of abandoned farmland would decline, and the yield per unit area would also increase.

It is reported that next year, China's cotton planting area will decline by 15%, and the decline will be concentrated in the relatively weak mainland. The reduction of China's cotton planting area will consolidate India's position as the world's largest cotton producer.

It is precisely because the unit yield is below the global average that it has dragged India into the footsteps of the world's largest cotton producer. Since 2000, India has begun to improve the quality of cottonseed. The yield per unit area has only increased. Although cotton prices in India were low, it was difficult to attract farmers to grow. However, there was no significant decline in cotton planting area in India.

At present, India The cotton planting area tends to be stable or even gradually increasing. The cotton planting area of India increased by more than 50% over the year in 2000. But the problem is that the global supply of resources is loose this year, resulting in a continuous decline in cotton prices. Will this lead to a decline in cotton planting area in India next year?

The key to this problem is that India has become the second largest exporter of cotton in the world. Over the past few years, with the increasing demand for China's imports, the main cotton exporters cotton Stocks are relatively tight. However, the adjustment of China's policies will promote textile mills to mainly consume domestic cotton stocks, and will reduce import demand in the next few years.

Against this background, cotton exporters Inventory pressure Will rise. The decline in global acreage and cotton production in 2015/16 will inhibit the growth of inventories. However, in recent years, the planting area in India is relatively stable, so India is probably an exception. Because of the shortage of warehousing capacity in India, more cotton traders will actively seek buyers, thereby creating a downward pressure on India and even the international cotton price.