Cotton Imports Have Been Falling For 3 Months. Cotton Prices Are Unlikely To Rise In The Second Half Of The Year.

By the end of June, as the largest importer of cotton in the world, China has been reducing cotton imports for 3 consecutive months.

Customs statistics show that in June 2011, China imported 120 thousand tons of cotton, a decrease of 25 thousand tons compared with May, a decrease of 17%, a decrease of 29% over the same period last year, a decrease for third consecutive months, and a decrease of 14.1% tons in the first half of 2011 compared with the same period last year.

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Analysts believe that by the national development and Reform Commission's 19800 yuan / ton minimum purchase price support, the cotton price in the future will be above 20 thousand yuan for a long time.

Cotton imports fell first in June

New China released by the NDRC in June

In June, the average import price of cotton was 3162 US dollars / ton, down 39 US dollars compared with May, or 1.2%.

The NDRC report said that since March, the price of international cotton has continued to decline. However, the average import prices continued to rise as the cotton arrived in the early stage, and the first decline in the year came after June.

Sun Liwu, an information cotton analyst at Zhuo Chuang, told reporters that the price of cotton has skyrocketed and collapsed since September of last year. On the one hand, the hoarding cotton business suffered a huge loss; on the other hand, it brought a great impact to the downstream textile enterprises. The high price raw materials made the textile look forward but instead, the sharp fluctuation of the price further combated the enthusiasm of purchasing.

Cotton prices jumped from 34 thousand yuan / tonne in the first quarter of this year, and more and more news began to spread in the cotton market and suppress its price rise.

Sun Liwu believes that the low demand in the international market has resulted in the increase in textile production rate and the slowdown in textile export growth.

The price reduction behavior of some large textile enterprises has a guiding effect on cotton prices.

According to the data from the national cotton market monitoring system, China's cotton production increased to 7 million 400 thousand tons in 2011/2012, an increase of 18.6% over the same period last year, up 6.2% from the forecast in March this year, and surpassed the US Department of agriculture's current 7 million 185 thousand ton forecast.

At the same time, the national cotton market monitoring system is applied to China.

Li Guoxiang, a researcher at the Institute of rural development of the Chinese Academy of Social Sciences, told reporters that cotton imports will be suppressed in the late part of this year.

There is a market analysis that the increase in inventory will largely affect the number of cotton imports in China. From the market fundamentals, the market will be shrouded in the next year's market because of the new cotton growth and the weakening demand of textile mills.

"Cotton prices are beginning to hurt farmers."

Wang Qianjin, senior editor in chief and senior analyst of textile industry, said that cotton prices surged last year to the first quarter of this year, suppressing downstream consumer demand.

At the same time, the US economic situation is lower than expected this year, and the European debt crisis is spreading. The situation of China's foreign trade textile exports is more complicated.

"The trend of China's cotton price has a clear guiding role in the world."

Sun Liwu believes that if the RMB continues to appreciate, the export oriented textile industry will face enormous production resistance.

"The impact of the rise in clothing prices, domestic and foreign market consumption is light, the prospect is unpredictable."

According to Wang Qian, a senior cotton textile analyst, the price of cotton seems to have dropped by planting costs.

"Now that the cost of cotton planting is rising, the current price has started to hurt farmers."

Sun Liwu pointed out that in the past two years, labor costs, rental fees, agricultural costs and machinery costs have been increasing. The cost of cotton planting in Dezhou Cotton Association has increased by only 60 yuan per mu per person.

Based on a statistical survey of cotton growers, it is estimated that the total cost per mu in 2011 is 1490.5 yuan, up 22.32% from 2010.

In terms of cost, the purchase price of seed cotton should be above 4.5 yuan / Jin in 2011, while the price of cotton seed should be 2 yuan / kg, processing fee 500 yuan / ton, and the price of lint cotton should be around 21 thousand yuan / ton.

"Since September 1st, if cotton prices are below 19800 yuan / ton for 5 consecutive trading days, the state will begin to collect and store them."

Sun Liwu expects that the latter will collect and store. The number of cotton in the State Treasury is not very large. The state's purchase and storage will play a supporting role in the cotton market, but cotton prices will not increase substantially in the second half of the year.