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Cotton Prices Are Likely To Increase Again And &Nbsp Will Increase.

2011/2/15 17:12:00 66

After a few days of soaring grain futures, the light gradually dissipated, and cotton and sugar futures took the lead.

On the 1-9 day of February, the cotton market rose and the domestic cotton market began to catch up.

In February 11th, cotton futures both at home and abroad hit a new high.

Li Xuerong, a senior researcher at CIC, believes that there are many factors to support the rise of cotton prices. From the domestic perspective, there are factors such as the cotton planting area, the reduction of production, the expansion of demand, and the speculation of idle funds. From abroad, there is the reality of tight supply and demand in the world and the rising role of US cotton futures. In addition, the overall market of agricultural products is showing a bull market. The rise of grain, wheat, corn, oil, sugar and other commodities and the inflation factor also greatly enhance the market expectation of cotton price rise.

Cotton price

Again strong momentum.

Li Xuerong pointed out that the reduction of planting area and output is the internal driving force for cotton's future price rise.

The extreme shortage of rural labor force is the main reason for the reduction of cotton planting area.

With the increase of labor costs and the increase of the cost of raw materials such as pesticides and fertilizers, the cost of cotton planting is greatly increased due to the uneconomical scale and low degree of mechanization. The profit of farmers planting cotton per mu is low; and the risk of cotton planting is affected by weather disasters, insect pests and cotton price fluctuations. Besides, with the increase of labor costs in China, the wages of migrant workers who have worked outside the country have increased considerably.

Therefore, more and more rural young and middle-aged labor force chose to abandon traditional cotton planting, and also caused more and more traditional cotton fields and even cotton areas to "be forced" to change their status.

Zhang Yanlin, research director of CIC, also pointed out that domestic

Cotton yield

The reduction of cotton quality and the overall low quality of cotton make the gap between supply and demand expand. The demand for cotton needs to be compensated by imports. This makes China's dependence on foreign cotton increase. The initiative of cotton price will be more controlled by foreign investors and the domestic regulatory room will be reduced.

This will make domestic cotton prices more and more affected by external cotton, and it will be harder to control cotton prices, and the risks will also increase.

Cotton price

The rise has unknowingly brought about a great impact on all aspects of China's textile and garment industry as well as the vast number of consumers.

The rise in cotton prices will also drive up the price of alternative products such as polyester staple and so on. For consumers, it means that the expenditure on clothing will increase in the future. For textile and garment enterprises, it means the rising cost of raw materials, which will bring pressure to many enterprises, especially for those enterprises with low cost pfer capability.