Cotton Prices Increase, Still Need Caution After Market.

According to some local processing enterprises and traders feedback, affected by the high inventory of lint cotton and the continuous increase of capital pressure, the company's shipments will increase. It is estimated that the supply of Xinjiang cotton will increase significantly in 2019/20. Recently, some large and medium-sized Cotton Traders and a few internal processing enterprises have increased the quotation push through various ways such as electronic business platform, WeChat, e-mail, telephone and so on, and the intention to return the funds is stronger.

Some cotton enterprises in Akesu and Korla indicated that as at the end of May, about 70% of the ginning plants in southern Xinjiang had achieved "double knot zero", and a few cotton enterprises were left with 3-10 batches of cotton stocks. In the case of Zheng cotton CF2009 contracts that could not be opened for 12000 yuan / ton at many times, cotton enterprises' bullish confidence subsided and sales sentiment increased. From time to time, from 5 to July, cotton processing enterprises and traders were faced with repayment of loan, equipment replacement, personnel wages and so on, plus the need to raise loan margin and purchase funds, and so on, and cash demand gradually increased.

From the survey point of view, nearly a week ago, some cotton trading enterprises, ginning plant basis quoted price stability, affected by zhengcotton main contract down impact is limited, but also some cotton enterprises in the expansion of profit margin, high spot inventory stimulation, the initiative to reduce the basis of 30-100 yuan / ton (Xinjiang cotton cut 50-100 yuan / ton, the Yellow River River real estate cotton down 30-50 yuan / ton), on the spot market Price has hit.

A cotton trader in Henan believes that the short-term CF2009 contract will still be consolidated in the 11500-12000 yuan / tonne car body, and the "bottom bottom and top" state will remain unchanged. Below 11500 yuan / ton, there will be a large number of cotton textile mills and middlemen supporting the price. However, due to the uncertainty of Sino US relations, insufficient orders in the summer and autumn, and large fluctuations in the RMB exchange rate, which are not conducive to the restriction of factors, Xinjiang cotton processing enterprises can seize sales and liquidation in June, and the market situation has gradually become clearer.