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Dialysis: Global Cotton Market Goes To Inventory Turning Point

2014/1/27 16:53:00 20

it is predicted that in 2013/14, China's national cotton reserves will reach 11 million tons, and this inventory may take several years to reduce to a reasonable level, and this huge inventory will bring enormous pressure on world cotton prices whenever it is sold. According to industry analysis, in 2014, it is possible to become the turning point of the global a href= "//www.sjfzxm.com/news/list.aspx Classid=101112107101" > cotton inventory < /a > from the increase to the decline, and the cotton prices will fall the following year in 2014. 
 global cotton market turbulence bottom > /strong > /p >
The annual trend of the US cotton in 2013 can be roughly divided into three stages. The first stage is: 1~3 month, the US cotton has gone out of a wave of unilateral rise, and the US cotton index has risen to 75 cents from the beginning of the year to the annual high point of 93 cents. The main reason for this increase is that the US cotton planting area has been greatly reduced, while the US cotton export data are better. The second stage: 4~8 months, the US cotton mainly fluctuated widely in the 81~93 American region, and the third stage: 9~12 month, the main shock of the US cotton fell, and in November it was back to the 76 cents of the beginning of the market rising in November. In the whole year, the US cotton failed to hit the bottom again. 
The trend can be roughly divided into three stages, the first phase: 1~3 month, Zheng cotton index rose from 19000 to 20500, and the main driving factors for the increase were two. First, the state announced at the beginning of this year that it could continue to open up and store up for 20400 yuan in the current year, and two of the last year's storage capacity was more than 6 million tons, resulting in a very small number of warehouse receipts in Zhengzhou cotton futures market. In recent months, the contract went out of the soft market position; the second stage: 4~7 month, the Zheng cotton index fluctuated around the 19600~20400 interval, the market lacked news stimulation, waited for the new year policy to be clear; third stage: 8~12 month, because the state did not continue to store and store the news in the 2014/15 year gradually, the Zheng cotton index continued to decline, from 20000 to the vicinity of 18500. ZHENG cotton futures in 2013. 
 go to inventory and shoulder heavy responsibilities. 
 according to the latest demand and supply report released by the US Department of agriculture, the total supply of global cotton in is still in excess of demand, and the end of the world inventory continues to hit a record high. From the perspective of supply, the supply of cotton in the world decreased slightly compared with the previous year, and the output of major cotton producing countries in China and the United States decreased significantly. The US output fell below 3 million tons, and India's output increased slightly to 6 million 300 thousand tons, which once again refreshed its historical record. In terms of consumption, due to the slow recovery of the global economy, the global a href= "//www.sjfzxm.com/news/list.aspx Classid=101112107105" > cotton consumption < /a > grew to 23 million 880 thousand tons in a small way. China's consumption forecast was unchanged from the previous year. The main consumption growth came from India and Pakistan. India consumption is expected to exceed 5 million tons mark for the first time. In terms of inventory, the end of global cotton inventories exceeded 20 million tons mark for the first time and increased to 20 million 990 thousand tons, of which China's final inventory was 12 million 478 thousand tons. Due to the continued storage this year, the trend of global cotton inventory to China is continuing. 
 from the beginning of 2010/11, global cotton inventories began to keep rising. The end of the year cotton inventory in 2009/10 reached 10 million 243 thousand tons, and the end of the world cotton inventory increased to 20 million 990 thousand tons in 2013/14. In the 4 years, the global cotton increased by 10 million tons. The demand for the world's cotton fell from the peak of 25 million 870 thousand tons in the year of 2009/10 to the bottom of 22 million 380 thousand tons in 2011/12, and the slow climb in the next two years basically coincide with the rhythm of the difficult recovery of the global economy. From the perspective of global economic growth, it is likely that a rapid recovery will be difficult in the next few years. The slow recovery may still be the main tone, so it is expected that the global demand for cotton will be difficult to increase in the next few years, and the heavy task of cotton to stock will only fall on the way of reducing the supply side. In the end of 2013/14, if the level of 20 million 990 thousand tons of final inventory dropped to about 12 million ~1400 million tons in history, it would be necessary to reduce the inventory from 2 million tons to 2 million tons per year from the beginning of 2014/15. This means that the global cotton supply in the next 3~4 year will be around 22 million tons, which is about 10% less than the current level. From this point of view, the global cotton inventory can be said to be a long way to go, for cotton companies may be a long and painful process. 
 adjustment of State Reserve Policy 
 2010, the world's major commodities rose sharply, of which cotton rose the largest, rising from 16000 yuan / ton to the highest 33000 yuan / ton, and the Chinese government's cotton reserves were basically sold out, leaving only a small amount of strategic reserves. In order to ensure the supply of cotton and prevent the cotton prices from rising and falling, the cotton farmers' enthusiasm for cotton planting was affected by the government. In 2011, the policy of open storage and protection of cotton protection price was put forward and lasted for three years. In 2011, it received 3 million 250 thousand tons of 19800 yuan per ton. In 2012, it collected 6 million 510 thousand tons of 20400 yuan / ton, and accumulated 4 million 100 thousand tons in 2013 as December 17th. According to the current progress, the total volume of storage and storage in this year will reach more than 6 million tons. 
What is the effect of large scale storage and acquisition in the past three years? first, domestic stocks, especially state reserve inventories, have increased significantly. China's final inventory is expected to increase to 12 million 470 thousand tons from 2 million 309 thousand tons of 2010/11 to 2013/14, of which the stock of state reserves is expected to reach 11 million tons. In the past three years, the State Reserve has accumulated about 10 million tons of stock. In recent years, the number of global cotton inventories has increased to 10 million tons. In March 2011, the US cotton futures price was about 210 cents. In 2012/13, the price of US cotton futures has always fluctuated between 70~90 cents. The US cotton price level corresponds to the cotton import duty paid price under the sliding tax rate should be 14300~16400 yuan / ton, much lower than the 20400 yuan / ton purchase price of the national reserve. In fact, the Chinese government's policy of purchasing and storage in the past few years is actually supporting the whole world's cotton market with the power of one country. 
 the reason why the current purchasing and storage policy is not going to continue is that the huge amount of money needed to maintain the huge cotton stocks will cost the state. At the same time, the continuous accumulation of national storage stocks has brought enormous pressure to the warehousing and storage of national cotton stores. For example, in 2013, a warehouse fire in Central China lost a few million tons of cotton. The actual purchase and storage of the state only raised domestic cotton prices, and could not raise the price of international cotton. The spread of domestic and foreign prices led to a significant increase in the cost of the textile industry. The operation was facing great difficulties. The high cost of purchasing and storing the reserve price dropped the reserve, resulting in huge financial subsidies to the state's financial needs and huge financial pressure. A large number of storage and storage have distorted the market pricing mechanism. Cotton prices have returned to the planned system, resulting in imbalance in resource allocation and huge losses. 
After the establishment of the new Chinese government in 2013, P emphasized the dominant position of the market in the allocation of resources. Therefore, it is logical to stop the purchase and storage policy and make direct subsidies to cotton farmers. 
Turning to direct subsidy, the first is to remove the policy support of China and the world's cotton. The bottom of the cotton price will be determined more by the market than by the Chinese government. Secondly, the government's direct subsidy to cotton farmers will reduce the production cost of cotton farmers, which is conducive to the fall in domestic cotton prices. Therefore, it is foreseeable that the domestic cotton prices will significantly reduce the high price difference of imported cotton, while the raw material cost disadvantage of the textile industry will gradually disappear. The domestic textile enterprises will compete equally with the world textile enterprises, which is conducive to the textile industry going out of the trough. Finally, after the state explicitly does not buy and store, the cotton farmers may choose to plant other crops and reduce the supply of cotton, which will play a catalytic role in the domestic cotton storage. cotton open < a href= "//www.sjfzxm.com/news/list.aspx Classid=101112107108" > storage and storage < /a 
 for cotton related enterprises, we should do well in preparation work as soon as possible under the situation that the national cotton control policy is turning sharply. For cotton importing enterprises, the price of import quotas is no longer high. For textile enterprises, we should pay attention to the impact of domestic and foreign price integration on cotton and cotton yarn prices.