It is understood that the current purchase price of hand-picked and machine-picked cotton in Xinjiang is concentrated at 7.60-7.70 yuan/kg. The game between cotton farmers, cotton brokers and ginners is still continuing, and the purchase market is gradually becoming differentiated. Due to the comprehensive impact of factors such as the sudden decrease in planting area, dwindling resources, and unstable market prices, Jiangsu’s new cotton acquisition work this year has been postponed and the acquisition volume has been sharply reduced. The situation of local cotton farmers selling “one piece of cotton” has already formed. .
The purchase price of seed cotton is strong. The current purchase price of hand-picked seed cotton in Xinjiang exceeds 7.5 yuan/kg in some areas. Some cotton processing companies do not dare to purchase large quantities rashly in view of the current high prices. Some companies are waiting to buy.
The supply of seed cotton is “more monks and less rice”
After the sell-off of reserve cotton ended, seed cotton acquisition became the focus of the entire market. Due to the continuous decrease in planting area in recent years and the obvious overcapacity of ginners, coupled with the sharp rebound in cotton prices this year, the current rush to harvest is very prominent, and the price of seed cotton has risen significantly during the National Day. Due to the disadvantaged position of ginners, it is expected that the recent rush to harvest seed cotton will not be significantly alleviated, and Zheng Cotton will maintain its strength.
The rush to harvest seed cotton is serious
Since the adjustment of domestic cotton purchasing and storage policies, my country’s cotton planting area has continued to decline, and output has decreased year by year, from a peak of nearly 8 million tons to the current level of about 4.6 million tons. However, my country’s cotton processing capacity has not shrunk to a corresponding extent, resulting in a large gap between processing capacity and seed cotton supply, and the contradiction between supply and demand has become prominent. Due to the rise in cotton prices this year and the change in market mentality, ginners hope to increase processing volume and are more enthusiastic about purchasing seed cotton. With the supply of seed cotton in short supply, ginners have gone on a buying spree, especially during the National Day holidays.
According to the current purchase price, the cost of cotton in ginneries reaches 16,000 yuan/ton, which is very risky. Some ginners have suspended purchases. The majority of cotton farmers believe that cotton prices will remain relatively strong and are unwilling to sell seed cotton at lower prices. The game between supply and demand has led to the slow progress of seed cotton acquisition and the low number of new cotton on the market. However, judging from the current situation of the entire market, due to the severe oversupply of ginning capacity and the dominant position of cotton farmers, the current strong price situation of seed cotton is difficult to reverse for the time being.
The international market is under great pressure
According to the US Department of Agriculture’s September supply and demand report, the increase in global cotton production in 2016/2017 offset the decrease in beginning stocks, and global ending stocks increased slightly. Global consumption remains unchanged and trade volume is revised down slightly. Global ending stocks were 19.554 million tons, a month-on-month increase of 43,000 tons, and a year-on-year decrease of 1.903 million tons; excluding China, global ending stocks were 8.537 million tons, a month-on-month increase of 64,000 tons, and a year-on-year increase of 187,000 tons. This shows that the international cotton market is still facing greater supply and demand pressure, resulting in the recent weak performance of U.S. cotton futures and the continued expansion of internal and external price differences.
Since the price of cotton has risen sharply again at this stage, cotton yarn, as a downstream product, can be regarded as “taking advantage” this time. According to the survey, cotton yarn, which was previously “on hold”, finally couldn’t help but stage a wave of price increases recently!
Cotton yarn shows improvement, prices rise after the holiday
According to a company, cotton yarn has improved recently, with prices rising after the holidays. Some spinning companies have received orders, and the load has increased slightly. Conventional pure cotton yarn is strong, and some spinning companies have increased orders after the holiday. This is mostly due to the increase in cotton prices, which has driven the need for restocking and stocking autumn and winter fabrics. Affected by this, the price center of gravity has increased slightly. JC32S woven by a factory in Suzhou is 25,000 yuan/ton, and C32S The high-end price is 22,700 yuan/ton. The price of polyester-cotton yarn rose slightly. A factory in Shandong Province quoted a price of T65/C35 40S high-end Dahua at 16,700 yuan/ton, and the manufacturer’s inventory tended to shrink.
It can be seen that the prices of cotton and cotton yarn have now entered a phased upward mode. At present, the seed cotton acquisition game is the main contradiction facing the domestic cotton market. In this contradiction, due to the prominent overcapacity of ginners, cotton farmers are in a favorable position, and there is a high probability that seed cotton prices will continue to remain strong or oscillate at high levels. However, as the amount of seed cotton purchased in the later period accumulates, the forces between the conflicting parties will change. The balance of domestic supply and demand and the trend of the international market will determine the market direction. The editor predicts that the risk of a fall in cotton prices in the later period is still relatively large. If the price of cotton drops , then will the “spring” of the cotton yarn market also disappear?
