Cotton Futures Encounter "Down Spring" National Cotton Store Is Still Leading Cotton Prices

"May be concerned."

Volatility investors have seen the current situation, cotton prices have been from the beginning of 13000 yuan / ton to below 10000 yuan / ton, the recent general trend is still rapid decline, the process of decline has not yet been completed.

Wei Gangmin, chairman of Henan TongZhou Cotton Industry Co., Ltd.

After the Lantern Festival,

Encountering "late spring chill"

The six - and a half years of continuous decline, coupled with an increase in the number of stores in April, the market saw a sharp increase in sentiment. Zheng cotton futures began to fall sharply in February 24th. On the 25 day, Zheng cotton 1701 contracts fell below the threshold of 10000 yuan.

On the one hand, after the Spring Festival

The start up situation is better than expected, but due to the relatively adequate inventory of enterprises and the rapid decline in cotton prices at present, it is difficult for spinning enterprises to sell finished products, and some enterprises continue to cut prices 100 to 150 yuan / ton.

On the other hand, the news is also one of the reasons leading to the collapse of cotton prices.

Since November 2015, cotton rumours have been constantly rumored, and the current forecast for the rotation is basically the same. The time may be in April, which will not affect the processing and sale of new cotton, nor will it cause pressure on the lint clearing at the end of the year.

For the upcoming cotton rotation policy, Wei Gangmin believes that the new round of rotation is combined with foreign circulation, that is, before the price of cotton is out, and now may be a round of rotation.

The round out is the weighted average of the foreign A index and the domestic spot index, both foreign and domestic prices will lead to this price index down.

What is the impact of the policy of circular rotation on China's cotton industry? Wei Gangmin also explained in detail: "this change will definitely solve the price gap between raw materials at home and abroad, for example, when the price difference between domestic and international raw materials is high, it reaches 5000 yuan / ton. No matter how high the level of manufacturing industry is, the price difference can not be digested. If China's raw materials are 5000 yuan higher than foreign countries, how can enterprises survive?"

How can we break the price gap between China and foreign countries? Wei Gangmin believes that the price of cotton will drop if foreign farmers are unwilling to grow, so that the supply and demand of global cotton will be changed.

For example, the cost of raw materials for cotton production in Vietnam is higher than that in China next year, so the competitiveness of our country will naturally come up, and the demand for cotton industry will increase.

Futures Daily reporter learned from the US Department of agriculture's February supply and demand report that global cotton production dropped slightly from 37 thousand tons to 222 million 74 thousand tons, and global cotton consumption fell 292 thousand tons to 24 million 437 thousand and 800 tons, with a larger reduction.

In addition, China's cotton output and ending inventory were maintained in January, and the demand and supply report predicted that consumption would be reduced by 109 thousand tons, and imports would be reduced by 109 thousand tons. The reduction of imports would all come from the decline in consumption.

At the end of the day, Wei Gangmin said that the economic recovery was weak and the national cotton mill's output still dominated cotton prices.

Before the implementation of the policy, cotton prices are still not optimistic. The real turning point will come from the implementation of the round out policy.