Policy To Protect The Market Escort, Reduce The Reserve Rate To Help Cotton Price Range Oscillation

Premier Li Keqiang of the State Council presided over the executive meeting of the State Council on July 7, saying that it is necessary to maintain the stability and effectiveness of monetary policy, and make timely use of such monetary policy tools as the reduction of the reserve requirement to further strengthen support for the real economy. It means that the cost pressure of enterprises increased due to the rise of commodity prices, and its harm to the real economy has been highly concerned.

In terms of domestic cotton market, cotton growth in Xinjiang is normal recently, and topping will continue until the end of July. According to the latest data of the national cotton market monitoring system, in 2021, the sown area of cotton in China will drop by 7% year-on-year, of which the sown area in Xinjiang will drop by 1.6%. This week, the spot market transactions increased, with 47700 tons of reserved cotton listed. Enterprises actively bid, and the transaction rate continued to be high, which effectively met the demand of textile enterprises for cotton, and foreign cotton transactions slowed down.

The operation of downstream textile enterprises is basically normal, but the textile market is differentiated in the off-season. The high count cotton yarn orders are slightly better than the low count yarn orders, and the inventory of cotton yarn traders is higher. The grey fabric market reflects that the demand of downstream clothing market is weak, the follow-up orders are weak, the product inventory is high, the yarn raw material price is at a high level, and the product profit margin is small, which leads to the lack of foundation for the cotton mill to raise the price again in the near future. Market waiting for the second half of autumn and winter orders.

To sum up, in the context of policy to protect the market, domestic cotton price range oscillation continued.