Analysis Of The Impact Of India Cotton On Domestic Cotton Prices

In 2014/15, cotton production in India was 6 million 750 thousand tons, demand was 5 million 220 thousand tons, and surplus was 1 million 530 thousand tons. The lowest purchase price was still not enough to digest India's surplus production. USDA estimates that the supply and demand balance of India in March is only 910 thousand tons of export volume, and the final inventory increased by 750 thousand tons to 3 million 250 thousand tons. In the middle of February, S-6 cotton in India basically maintained at 65 cents / pound, and the price of S-6 cotton and cotton CIF in India was generally around 70 cents / pound, and 40% imports were infeasible.

That appeared India's cotton surplus, CCI Storage capacity Disproportionate to selling volume, and CCI Storage and storage of cotton Can not enter the next year's contradictions, the solution to this contradiction is India's price reduction. When the India cotton 40% customs clearance is competitive, the domestic cotton importers will put aside the quota policy to import India cotton and India cotton export problem to solve. Surplus situation It is possible to ease.

However, in the middle of April, the average price of domestic 3128B standard cotton was near 13280 yuan / ton, that is, the CIF price of India's 40% customs duty cotton imports reached 62 cents / pound. It was feasible to convert the price of Chinese port CIF to India's domestic cotton price plus 3 cents / pound. The price of cotton in India needs to reach 59 cents / lb. India domestic cotton prices can have such a big reduction rate? It is very questionable.

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Up to now, Xinjiang cotton spring sowing has been in full swing. According to feedback from some seed companies and agricultural companies, in 2015, Xinjiang's fine staple cotton was sown or reduced by 15%-18%, while long staple cotton was increased by 25%-30%. Even a cotton grower in the mainland said that two years of long staple cotton had tasted sweet. This year, we plan to sow long staple cotton in more than 600 acres of cotton fields contracted in Akesu. Now we are circulating in the mainland cotton farmers who go to Xinjiang. "In fact, the performance of the cotton ginning plant has also strengthened our confidence in planting long staple cotton," he said. A market person told the author that by the middle of April, the acquisition of Xinjiang's fine cotton was all over, but the purchase of long staple cotton seed cotton was still in progress. On the 14 day, the seed cotton price of long staple cotton in Awati county was 8.0-8.5 yuan / kg (lint 32%, moisture regain 10%), and it reached 9 yuan / kg individually. Although the cotton is poor, the quantity is small, the price is high, but the ginning factory is still happy. Thirdly, the mainland Cotton Traders and spinning enterprises are in hot pursuit. A friend of cotton merchants in Cangzhou said that since the Spring Festival, he has been "wandering" in Xinjiang, so that he can purchase more high-quality long staple cotton.

At present, this friend is "only unable to enter." He told me that by May, the price of long staple cotton should be at least 30000 yuan / ton. A textile enterprise purchasing manager in Binzhou, Shandong also said that the quality of long staple cotton is really hard to find. Many manufacturers are quick to "no rice pot". If there is no big storm, domestic long staple cotton will continue to climb. Therefore, many cotton traders and textile companies are now looking for cotton everywhere. Long staple cotton "hot" to such a degree, will really "wind tens of thousands of miles, straight up heavy night nine"? Will it be like the cotton merchant in Shandong worried that the higher the fly, the worse the fall?

First, there is a saying: the poor do things by the rich. Therefore, business must first look at the potential. Nowadays, long staple cotton, whether it is market supply and demand or popular desire, has already formed a situation of "not rising but not". This situation is the trend. Therefore, we should follow the trend.

Second, as of mid April, the price of domestic medium and low grade yarn is still low, of which 21 and 32 prices are 18500 yuan / ton and 19200 yuan / ton respectively. At present, high grade yarn, especially long staple cotton, is the main cotton yarn, though it has not declined, but it is also at stake. A Jiangsu textile enterprise official said that the 100% 80 long staple cotton combing 80 produced by their factory is currently offering a price of $56500 / ton. In addition, the profit margin of processing high count yarn is still low. If we continue to reduce the price, the enterprise will be unable to bear it. So, how can the long road of cotton rising be able to go far from the unilateral speculation and strength of upstream enterprises?

Third, Australia's cotton production decreased by 46.9% this year, but its total output is only 470 thousand tons. In addition, China's import quotas in 2015 will not be extended to other quotas except 894 thousand tons.

Therefore, whether imported long staple cotton or imported Australian cotton quantity will be significantly reduced. This provides opportunities for upland cotton production. There are both favorable factors and risk factors. If asked, how will the long staple cotton grow in May? There is no doubt about it. However, up to 30000 yuan / ton, the risk will be the main contradiction, which is no longer suitable for continuing to catch up.

To this week, Awati County 137 A-level (public inspection) long staple cotton factory quotes have reached 28300 yuan / ton, individual enterprises reported to 28500 yuan / ton; 237 level, 337 grade also respectively in 27300-27400 yuan / ton, 26400 yuan / ton line. Compared with last week, the price rose by 200 yuan / ton, up 500-600 yuan / ton in March compared with that in 2014. Compared with November 2014, the price rose by 2000-2500 yuan / ton. Second, the mills and cotton growers are confident. On the 14 day, a boss of a ginning factory in Awati said that he still had 3700 tons of long staple cotton stocks, of which 85% had been moved to Shandong, Jiangsu and two provinces, and 336, 237, 137, or all. "But I don't want to sell it yet. The price to 30000 yuan / ton is just around the corner.