Why Is Zheng Mian'S Warehouse Receipt Unpopular With Textile Enterprises?

On July 16-19, Henan, Jiangsu, Shandong and other inland warehouses quoted 17150-17350 yuan/ton of "Double 28" Xinjiang machine-made cotton in 2020/21 (some differences due to different specific indicators and warehouses), regardless of color level, quality and other factors, the spot cotton was only 250-400 yuan/ton higher than the reserve Xinjiang cotton.

At present, the panel price of Zheng Mian's CF2109 contract is 16700-17000 yuan/ton, which is in line with or inversely linked to the transaction price of reserve Xinjiang cotton, and is 200-500 yuan/ton lower than the inland warehouse's "Double 28" Xinjiang machine picked cotton. However, Zheng Mian's warehouse receipt corresponds to 3128B grade, and 100% of the warehouse receipt is cotton of 2020/21.

According to statistics, as of July 16, there were 15198 warehouse receipts for Zheng Cotton, 1445 fewer than that of June 30, indicating that although the outflow of warehouse receipts for Zheng Cotton has increased in the past month, the attention is still low compared with the reserve of Xinjiang cotton. The author believes that three factors still restrict textile enterprises from receiving warehouse receipts from Zheng cotton:

1、 The plate price of Zheng Mian corresponds to the 3128B level of the Xinjiang warehouse. If transportation, ex warehouse, insurance and other expenses are taken into account, the sales price of the inland warehouse of the warehouse receipt is still 400-500 yuan/ton higher than the reserve of Xinjiang cotton; 2、 In 2020/21, the grade and quality indicators of Xinjiang cotton have declined. Cotton traders, futures companies, ginning mills and other low-quality cotton have a large amount of hedging (as long as they meet the warehouse receipt generation standard, the discount is generally high). Textile enterprises are worried about the low quality and spinnability of the warehouse receipt for delivery matching, which will not meet the spinning requirements; 3、 The hedging of cotton enterprises is recognized as sold by most loan banks and included in the loan repayment progress, which does not affect the application for credit qualification in 2021/22. Therefore, the basis of cotton trading enterprises and futures companies is relatively high, and there is little room for purchase negotiation.