The Potential Supply Of National Reserve Is Adequate, And The Impact Of Cotton Yarn Imports Is Still On The Way.

In 2014/2015, the total supply of cotton in China was about 20 million 800 thousand tons, and consumption was about 7 million 200 thousand tons. The supply exceeded demand, and the stock continued to accumulate to 14 million 800 thousand tons.

In 2015, the supply declined to 20 million 100 thousand tons due to the decline in production, and the demand dropped to 7 million 130 thousand tons, and the stock dropped to 14 million 170 thousand tons, but it remained at a high level.

Among them, supply includes state-owned cotton, new cotton, imported cotton, and carry over stock in the hands of enterprises.

By the end of 2015,

The stock is still around 10 million 150 thousand tons, which can be said to occupy half of the supply. This part can not be freely circulated in the market. It is necessary for the relevant departments to throw the stock to form an effective supply, so we define this as potential pressure.

The impact of imported cotton decreased significantly in 2015, but imported yarn still suppressed domestic cotton market.

With the widening of the internal and external spreads, international cotton prices are no longer dominant, and 1% tariff imports still have advantages, but the quota is limited.

Therefore, the number of cotton imports has been shrinking in 2015, and the amount of cotton imports in the first 10 months is only 1 million 200 thousand tons, far below the 2 million 80 thousand tons level in the same period in 2014.

In 2016, China adopted strict control measures on cotton imports. The import quota of cotton within the tariff remained the minimum level of 894 thousand tons stipulated by WTO, and cotton imports had little impact on the domestic market.

The cost of planting cotton is supported at the bottom, but because of the potential sale and weak demand of cotton, the uplink of cotton prices still seems to be incapable of falling into a dilemma, and the volume and position of the cotton prices are sluggish.

In 2015, the quantity of imported cotton was limited by the quantity of quotas, and the supply was limited. The responsible person of the NDRC said that in 2016, the import of cotton was strictly controlled, and the import quotas within the tariff were still limited to the bottom line of 894 thousand tons of WTO.

The stock of cotton in the hands of cotton companies is still low in the background of the market.

In terms of production and demand this year alone, the total domestic cotton demand is around 7 million 130 thousand tons, and the supply of 5 million 300 thousand tons of new cotton plus 890 thousand tons of import quotas still has a shortfall of about 900 thousand tons.

And last July to August, more than 20 days of high temperature weather.

Problems such as short fiber and high horse value lead to the relative shortage of high quality cotton. We do not rule out that in the near future, after the new cotton concentration period, with the reduction of cotton sources, there will be a certain market before the sale of national cotton.

But it is still not going to go higher, because the market is expected to sell the national cotton stores around March this year.

On the operation, the possibility of unilateral market in the cotton market is not large, and the overall operation is mainly between 10500 - 14500 yuan / ton.

On the time node, the market pressure is small before March, and the pressure of throwing and storing will increase. The market will still need to be explored. With the expected shrinkage of cotton planting in the new year of 4 and May, the cotton price will be expected to rise gradually after bottoming.

1701 after the listing of the contract, we may consider buying 1605 to sell 1701, and we will pay attention to the direction of change in March.

In March, if the storage is expected to be realized, we can buy 1701 to sell 1605 or 1609.