Cotton Production Forecast Down, Not Changed Supply Relaxed Pattern

The national cotton market monitoring system released recently in 2011, the national cotton production survey report shows that after August, the rainwater in the Yellow River and Yangtze River Basin was too much, which caused a certain amount of cotton growth.

Despite the decline in production, domestic textile consumption is shrinking and its prospects are poor.

Textile enterprises in Shandong, Jiangsu and other places have reflected that the yarn market is very depressed, orders are seriously inadequate, and the operating rate of enterprises has been reduced. Some enterprises even have plans to stop production and leave.

The national cotton market monitoring system predicts that domestic consumption will only be around 9 million tons this year, and there may be a downward trend in the latter stage.

In the new cotton supply season, due to the low purchasing power of the downstream textile industry, spot trading has been in the doldrums, and seed cotton purchase price has continued to decline. A considerable portion of resources need to be digested through storage.

In the past week, the average daily turnover of cotton was nearly 50 thousand tons.

As of November 25th, a total of 862030 tons of storage and storage pactions were received this year, including 262230 tons in the mainland and 599800 tons in Xinjiang.

Relevant analysts believe that the purchase and storage effectively alleviate the pressure of supply, and the loose supply and demand pattern in the cotton market will continue in the medium term. It is expected that domestic cotton prices will maintain the oscillation pattern under the support of purchasing and storage policy.

On the other hand, since late October, the global economic downturn and the European debt crisis have continued to escalate. The US dollar trend is stronger, commodity prices have been under pressure, cotton prices are falling more than cotton prices, and domestic and foreign cotton prices are hanging upside down.

By contrast, the cotton price has dropped by only 0.4% in the year to November 8th, while the total price cut has reached 15.3%.

In November 25th, New York cotton futures contract settlement price in December was 90.8 cents / pound, or 4.2%.

The international cotton index (M), which represents the average price of the Chinese main port on the import cotton, is calculated on the basis of 1% tariffs. The import cost of the folded renminbi is 16866 yuan / ton, down 1226 yuan / ton, or 6.8%, compared with the previous week. According to the sliding tax, the cost of import is 17273 yuan / ton, down 1214 yuan / ton, or 6.6% lower than the previous week.

At the same time, India cotton and Brazil cotton quotations have already been below 18000 yuan / ton, attracting many textile enterprises.

Owing to the abundant import quota of cotton at present, the spinning enterprises are now concentrating on the purchase of cotton prices at home and abroad.

This year, the state has issued a total quota of 3 million 600 thousand tons of imported cotton.

According to statistics from the General Administration of customs, China imported 1 million 943 thousand tons of cotton in 1~9 months this year, a decrease of 9.7% over the same period last year, which means that about 1 million 600 thousand tons of quota will be used.

Although the quota is postponed every year, if the domestic and foreign cotton spreads are attractive enough, it is predicted that the average monthly import volume of cotton will exceed 250 thousand tons in the next few months, and the total import volume will exceed 1 million tons in 9~12 months.