State Reserve "Dammed Lake" Heavy Pressure Cotton Market

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The Xiaobian of the network introduces the top of the chopper, which is a heavy pressure cotton market.

Cotton city is facing a very delicate situation.

Although the pilot price target of cotton has been launched, the marketization reform of China's agricultural products has taken a substantial step. But the new deal has broken the psychological expectations of cotton farmers and cotton enterprises. Under the condition of "no penetration" of the policy, the market wait-and-see sentiment is strong, and no one dare to give it a hand.

The intensification of the contradiction between the increase of cotton stocks and oversupply is the great pressure both inside and outside the market, and it also determines the overall weakness of the market.

At present, the impact of the market on the new deal is generally interpreted as promoting China's cotton prices into the downstream channel.

However, in the long run, after 2 to 3 years of adjustment, domestic and foreign cotton prices are expected to be reintegrated, and the problem of high cost of raw materials and relatively low quality of national cotton is expected to change gradually, which is good for the market.

Policy: under the new deal,

The atmosphere is serious.

"Next year, we will do a good job in cotton import related work in accordance with the domestic cotton supply and demand next year. In addition to issuing 894 thousand tons of tariff import quotas in accordance with WTO commitments and meeting the needs of textile and cotton blending, we will no longer issue import quotas, and guide domestic textile enterprises to make more use of domestic cotton."

Liu Xiaonan, deputy director of the economic and Trade Department of the national development and Reform Commission, said.

According to the previous implementation plan, when the market price of cotton is lower than the target price, the government will no longer buy the stock as high as it used to, but let the cotton farmers sell it at the market price first, and then subsidize the cotton farmers in Xinjiang according to the difference between the target price and the market price.

Dong Liming, general manager of Xinjiang Kuitun Junggar Cotton Industry Co., Ltd., said that this year, the country began to implement new target price subsidies in Xinjiang, and canceled the temporary cotton purchase and storage policy.

At present, there is no market protection price. Cotton processing enterprises will purchase cotton according to market price.

In the first year, the implementation of the new deal is uncertain. Cotton processing enterprises also dare not act hastily.

Cotton farmers have not yet fully understood the new subsidy policy. They do not know how subsidies can reach their own hands. They prefer cash directly to them.

So at present everyone is in a wait-and-see state, and is estimated to start buying cotton a month later than before.

Inventory: the system of storage and purchase leads to an amazing "barrier lake".

The sluggish cotton industry is closely related to nearly three years of cotton policy.

In September 2011, in response to the collapse of cotton prices, China established a temporary cotton storage and storage system, and the effect of stabilizing the market immediately appeared.

Since then, the temporary purchase and storage system has been entrusted to China's cotton price to 20400 yuan per ton.

At the same time, international cotton prices continued to fall, and the difference between domestic and foreign cotton prices was as high as 4000 yuan.

Three years of State purchasing and storage also resulted in the accumulation of cotton and the formation of "barrier lake".

According to Gao Fang, executive vice president of China Cotton Association, the total amount of cotton storage and storage in the past three years is more than 16 million tons.

At present, there are still about 12 million tons of reserve cotton in the national treasury, while the highest stockpile in history in 1984 and only about 4000000 tons in stock.

In addition, China produces about 6 million tons of cotton per year.

According to industry estimates, China's textile industry digested cotton 4 million tons per year to calculate, it will take three years to digest the national treasury cotton basically.

Analysis: internal and external cotton prices will be integrated into the downstream channel.

With the end of the national cotton temporary purchase and storage policy, the market is generally interpreted as promoting cotton prices into the downstream channel, and cotton processing enterprises will sell cotton at market prices.

Everbright futures cotton analyst Xu Aixia believes that "with the cotton direct subsidy pilot cotton in Xinjiang, the price advantage of imported cotton will gradually lose, and domestic and foreign cotton prices will gradually integrate."

A number of agencies analyzed that it is expected that by the end of August, the dumping reserve will be suspended, and the total amount of China's cotton reserves will still exceed 10 million tons. The Chinese government is likely to restart the sale of national cotton stores in 2014/15, under the many factors such as downgrading of cotton, reduction of funds, stock safety, and so on. From the high and low grade, three quality levels, the Chinese import cotton will become "encirclement and suppression".

Futures and spot prices are dropping, and the reserve price of the reserve auction has been reduced to 16500 yuan / ton or even 15000-16000 yuan / ton.