The cost of purchasing seed cotton in 2016/17 may become a “castle in the air”
Abstract: In fact, cotton companies are to a certain extent themselves to blame. Selling at the current market price, cotton companies are faced with the problem of losing more than they pay; if they wait and see, they will have to bear the costs of lint storage, loan interest and other costs. Although many mainland textile and garment companies currently come to Xinjiang to visit the market or make inquiries via phone calls, emails, etc., few have placed orders. In previous years, mainland textile companies usually went to Xinjiang to purchase cotton in September. So, Gaoqi’s 2016/1
Key words:
In fact, cotton companies have themselves to blame to a certain extent. Selling at the current market price, cotton companies are faced with the problem of paying more and losing less;If you wait and see, you will have to bear the costs of lint storage, loan interest and other costs.
Although many mainland textile and garment companies currently come to Xinjiang to see the market or make inquiries via phone calls, emails, etc., few have placed orders. In previous years, mainland textile companies generally I will go to Xinjiang to purchase cotton in September. In this way, the high purchase cost of seed cotton in 2016/17 may become a “castle in the air”. The price of seed cotton in Xinjiang is high, and the price of lint cotton is inversely related to it.
Analysts at Jinshi Futures Cotton Research Center said that due to the current sufficient supply of seed cotton, textile companies are not willing to purchase and trading is light, and the lint spot market is operating above and below the cost line. Although my country’s monetary policy has been loose in the second half of this year, hot money has begun to enter the commodity trading market, and the cotton market is one of them. However, the cotton market is not the main area where hot money intervenes. Only a small amount of hot money sells when the market is high and sells when it is low. Buy and earn the difference in the shock.
This yearin September, Xinjiang seed cotton was weighed and the price was6.50yuan /Kilograms or so. Entering the first ten days of OctoberOctober, the price of Xinjiang seed cotton has risen rapidly to7.20yuan/Kilograms or more. In the Hami region of Xinjiang, the purchase price of seed cotton is even the highest in Xinjiang – 8.10yuan/kg. The purchase price of Xinjiang seed cotton during the corresponding period last year was only 5.10yuan/kg, 5.30yuan/kg. According to data from the China Cotton Association, the purchase price of Xinjiang seed cotton at that time was lower than the national average.
As the temperature drops and rain and snow come, this year’s cotton harvest in Xinjiang is coming to an end. However, the reporter learned from the National Cotton Market Monitoring System that on November 77, seed cotton in the main cotton producing areas of Xinjiang The purchase price remains at around 7.20yuan/kg. The high price of Xinjiang seed cotton has begun to be transmitted to major cotton-growing provinces such as Hebei, Anhui, Henan, and Shandong.November7The purchasing price of seed cotton in the above-mentioned areas on Japan is6.50-7.70yuan/kg. Although the current purchase price of seed cotton has dropped from the previous high, it is still significantly higher than the same period in recent years.
The cotton target price determined by the country this year18600yuan/ tons , the current purchase price of seed cotton has exceeded this price. A market insider pointed out that the high price of seed cotton this year is an irrational market behavior. On the one hand, cotton output has increased slightly this year;On the other hand, oil prices have been running at low levels, and the prices of chemical fibers, substitutes for pure cotton products, have also been at low levels, resulting in the price difference between cotton and polyester. Reaching more than8000yuan/tons, nearly2000 higher than the average level of the previous year Yuan/tons, the cost of chemical fiber replacing cotton is low. In addition, the downstream textile and garment industry is still sluggish, and the total amount of cotton consumed by national textile and garment enterprises every year is on a downward trend. The willingness to purchase cotton is not strong and they are in a wait-and-see state. There is a mystery behind the Khmer price that lacks fundamental support.
The price inversion of lint cotton and seed cotton caused a lot of suffering for cotton companies that rushed to buy high-priced seed cotton in the early stage. The CEO of a cotton enterprise in Xinjiang said that the current price of seed cotton in Xinjiang is mostly concentrated at 6.50-7.50yuan/kg. The lint price is 16250-17250 yuan/ tons, while the lint purchase quotation of textile and garment enterprises is only 15000-16000yuan/tons, the difference is about 1000yuan/tons. It is worth noting that cotton companies are concentrated in the launch period of seed cotton from mid-Septemberto mid-October The purchase volume accounts for a large proportion, and the price is mainly 7.50-7.90yuan/kg.
In 2014-2016, a cotton project was trialled in XinjiangYuan/kg, price of processed lint16250-17250yuan/tons, while the lint purchase quotation of textile and garment enterprises is only15000-16000yuan/tons , the difference is about1000yuan/tons. It is worth noting that cotton companies are concentrated in the launch period of seed cotton from mid-Septemberto mid-October The purchase volume accounts for a large proportion, and the price is mainly 7.50-7.90yuan/kg.
In 2014-2016, cotton target price reform was trialled in Xinjiang3 During the year, the income from cotton cultivation in the mainland continued to decline, the cotton planting area continued to shrink, and cotton companies went to Xinjiang to build or contract factories. At the same time, when the country implemented the temporary cotton purchase and storage policy a few years ago, cotton companies followed the operating principle of “quick acquisition, quick processing, and quick delivery” and made huge profits, attracting various social capitals to invest in cotton companies, and cotton companies sprung up like mushrooms after a rain. emerge.
At present, Xinjiang has a total of 853 cotton companies that have passed qualification certification, with a processing capacity of nearly 600Ten thousand tons, which is much higher than the cotton output, and the competition for the purchase of seed cotton is very fierce. In addition, it is common for Xinjiang cotton enterprises, especially new cotton enterprises, to lease to others for operation. In order to maintain a basic balance of payments and low profits, when the scale of seed cotton is opened this year, these leased cotton companies will definitely lose money if they do not collect cotton. They need to purchase a certain amount of seed cotton according to the size of the cotton company to try to ensure a balance of payments and bet on the future market. The price of lint cotton has increased and profits have increased, which has led to the rush to buy seed cotton in the early stage.
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