Strong Consumption Has Become A New Driving Force For Cotton Price Rise.

　　 Wang Jin: High cotton price Will become "normal"

Cotton production in the first half of the year has become the main factor to drive the market up, and the strong consumption in the second half of the year has been the rise of cotton prices. fresh impetus 。

The sharp rise has become the main keynote of cotton prices at home and abroad in recent two years. The reasons include the following aspects:

The first is global. Cotton yield The decline in consumer demand continued to exceed expectations. Cotton is an underrated product all over the world. The yield of wheat is lower than that of wheat, corn and soybean, resulting in a sharp decline in cotton planting area and a sharp drop in output. After the financial crisis in 2008, the global economic recovery was strong, and the recovery of the global cotton consumption market exceeded the market expectations. Under the influence of the above two aspects, the contradiction between supply and demand of cotton is more and more prominent. USDA data show that in 2009 -2010, cotton consumption in the world exceeded 15 percentage points of output.

Two, there is a history of "bright sunshine" in the downstream cotton mills. Starting from March this year, the profits of the cotton mill began to soar, and some of the textile enterprises were hoarding large quantities of stocks at a low price at the beginning of the year, and their profits increased significantly. In June, the cotton mill's theoretical profit reached 4600 yuan / ton, and its profit rate reached over 19%. Then a slight fall, but the textile enterprise theoretical profit still reached 3000 yuan / ton. The price of yarns is strong, which ensures that there is still room for profit for textile mills to purchase raw materials at high prices.

The three is that the stock is too low to become the fuse of cotton price rise. By the end of 8 this year, enterprises accounted for less than 200 tons, accounting for 58%; 200~1000 tons of enterprises accounted for 22%; 1000~2000 tons accounted for 10%; inventory of 2000~3000 tons accounted for 6%; and 4% of enterprises' stocks were 3000 tons. Although the total inventory of cotton is larger, the actual stock of each manufacturer is not optimistic, and the enterprises with less than 200 tons occupy the majority, while the enterprises with less than 1000 tons of stock occupy 80%.

Four, there is a pattern of mutual promotion between cotton and national cotton. Long term supply of cotton in China is short of demand, and 25%~30% is supplemented by imports. Last year, domestic cotton output was 6 million 400 thousand tons, while consumption was more than 10 million tons. The gap was only offset by imports. So the international cotton price is a very important index for China, and the change of domestic import demand will have a great impact on the international cotton price. Recently, the price of cotton to China's main port is generally around 120 cents, and the domestic delivery price has been close to 22 thousand yuan.

The five is the resumption of growth in China's textile industry, which will bring solid support to the cotton market. Data show that from 1 to August, China's textile and clothing exports increased by 23.75% over the same period last year, and have fully recovered to the level before the crisis. Textile production has also maintained rapid growth, with the growth rate of yarn, cloth and clothing reaching the highest level in recent years.

Despite the financial boost, there was no obvious sign of hype in the cotton market in 2009~2010, and the law of supply and demand still dominated the market. Cotton production in the first half of this year has become the main factor to drive the market up, and has promoted cotton prices to rise substantially. In the second half of this year, strong consumption has become a new driving force for the rise of cotton prices. At present, the cotton price is a reflection of normal supply and demand. The bull market pattern is unquestionable. It is difficult to completely change the pattern of tight cotton production in the new year.

　　 It can be preliminarily judged that the "low cotton price era" will never return, and the "high cotton price era" in the cotton market has arrived.