Cotton Enterprises "Money" Way Uncertain, Cotton Enterprises To Buy More Wait-And-See

Since its record high in 2010, the most recent Cotton price Has fallen to the lowest level. Wei Linyan, consultant of Jinqiao textile network, said that the cotton price for delivery orders in December this year was 49.69 euro cents (62.59 cents) per pound, which only went back to October 7th in 2009. China has announced a reduction in imports, and cotton prices have plummeted by 26% compared with last year.

According to the survey data, the end of the global cotton in 2013 Stock 15 million 60 thousand tons, consumption of 23 million 180 thousand tons, inventory consumption ratio of 65%; China's cotton terminal inventory 8 million 190 thousand tons, inventory consumption ratio of 106%; global cotton supply exceeds demand pattern in the past two years is difficult to change. The Commerce Department said a few weeks ago that the market was in full transition. Huge cotton stocks are sufficient to meet China's demand in the next 4 to 5 years. Only after this stage can China return to the market and push prices up again.

The cotton price crisis that shook the textile industry in 2010 was largely attributable to China. As China expects cotton prices to rise, it will buy large quantities of stocks, thereby pushing up cotton prices. Price While other countries are looking for the remaining cotton stocks.

For the time being, one of the obvious consequences of low price and China's withdrawal from the cotton trading market is that India will catch up with China in cotton production. India's cotton output reaches 30 million packs, compared with China's cotton output of 29 million 500 thousand bales this year, while last year's output reached 32 million packs.

Mr. Wei believes that planting more and reducing demand are the main reasons for the decline of cotton prices, plus the domestic enterprises like to import cotton. Because the price of imported cotton is lower than domestic, the stock of cotton is very large at present, and the price will remain low.

Treasure Island analyst Ms. Zhu believes that after a long decline in cotton prices, the possibility of reversing is not great, whether it is domestic cotton futures prices or the US cotton futures, are currently in a consolidation range of shocks, the short term is likely to continue to enter the downward trend is unlikely, if the possibility of reversing smaller.

The reason why cotton prices are now in a consolidation state is closely related to output and inventory, and the two have entered a short equilibrium state. The US Department of agriculture (USDA) released the supply and demand report shows that the US 2014/15 cotton output is estimated at 16 million 260 thousand bales. It was estimated at 16 million 540 thousand bales in September. Downgrading 2014/15's US cotton production forecast has led to concerns over tight supply in the short term. It has also become an important reason for the slight rebound in cotton prices recently.

The reduction in short-term forecasts has helped to maintain a continuous decline in cotton prices, which has led to a slight increase in cotton prices. However, some market participants say that the rise in cotton prices is difficult to sustain because the pressure on global inventories still exists, and the short-term benefits can only cause fluctuations in cotton prices within a certain range. ICAC said in its monthly report: "there is an oversupply of 1 million 800 thousand tons in the global cotton market, and China's cotton support policy has changed, and it is estimated that cotton prices will not rise to the level reached in the first two years."

Under the influence of high inventory, the price of cotton will not be optimistic in the future. Although under the influence of shortage, cotton prices may rebound slightly, but it is difficult to constitute an upward trend. Therefore, cotton prices are very difficult to rise under the short-term impact of output and the long-term impact of inventory. For the future, Guotai Junan Liu Shangqing believes that the report of the US Department of agriculture has a certain boost to the domestic cotton market. In the short term, cotton will maintain wide shocks. However, the fundamentals of cotton are still weak and the trend is still downward.