High inventory pattern continued
Before the National Day, Zheng cotton contrarian interpretation of the wave of rising trend, the lowest price from 12,470 yuan since 2014 / ton, once on the probe to 13,840 yuan / ton, an increase of 11%. For this round of cotton soared, I believe, in the pattern of the current fundamentals are still weak, high inventory, the cotton price decline will continue.
2014/2015 annual cotton supply and demand situation turns for the better, but it is difficult to get rid of high inventory repression. According to the US Department of Agriculture (USDA) latest report shows that in 2014/2015 annual global cotton market supply surplus amount compared with the year narrowed further, supply and demand side changes toward a favorable direction, but still showing the overall oversupply, excess 1.284 million tons, far lower than the 2.333 million tons this year. Which yields 25.695 million tons, compared with 149,000 tons this year Diaojian; consumption 24.411 million tons, adjusted by 900,000 tons.
In China, the global cotton supply and demand pattern very similar, which 2014/2015 annual production forecast for 6.423 million tons, consumption of 7.947 million tons, 1.742 million tons in imports. Under the terms translated Chinese cotton supply and demand is still excess supply pattern, but the excess amount has narrowed down by year's 2.53 million tons to 21.8 million tons, also referred to as wide a balanced pattern.
But the new year China's cotton ending stocks in this increase was from 207,000 to 13,697,000 tons, has been far beyond the consumption of cotton a year. Comprehensive income are translated in recent years, Chinese cotton, throwing reserves data, the current reserves of cotton stocks are projected at 9.376 million tons, enough to meet the needs of next year's cotton consumption, high inventories will continue to restrict the suppression of cotton prices run up space.
Look at the global inventory, nearly four years of data showing the way to a steep upward trend. But if the Chinese inventory data exclude seen its ending stocks and stock consumption ratio trend change is not so obvious. In other words, post-global trend of cotton will also see China cotton stocks wink.
Cotton subsidy policy to guide the market return. Approved by the State Council, "cotton target price reform work plan" was September 16 by the National Development and Reform Commission, Ministry of Finance issued a formal execution. According to "plan", cotton target price reform policy mainly includes the following aspects: First, cancel cotton purchasing and storage policies. The government does not intervene in the market price, the price determined by the market, producers sell at market price of cotton.The second is to implement the target price subsidies on cotton. Announced before planting cotton target price, when the market price is lower than the target price, the state according to the target price and the market price of the difference of the pilot areas producer subsidies; when the market price is higher than the target price, not subsidies. Third, improve the subsidies, target price subsidy and acreage, sell the amount of seed cotton, plant varieties and other hooks.
Purchasing and storage of cotton subsidies policy change, policy intervention efforts weakening of cotton, cotton prices in the new year will be re-referred to the basic supply and demand determine the cotton market, cotton prices return to the market. Late at home and abroad are expected to gradually reduce the spread of cotton, while in the case of foreign cotton continued low currently, China's domestic cotton prices will continue weak pattern.
Meanwhile according oriented subsidy policy, we believe that the trend of the main game late cotton ginning factories and is formed by textile companies. But in the current high inventory of cotton and cotton downstream consumption remains flat large pattern, the price really depends on the order of the downstream textile enterprises, which may mean that the late acquisition of cotton ginning factory sales risk will be significantly increased.Meanwhile subsidies mentioned embodiments, the processing of cotton lint processing enterprises to all stores by the autonomous region of Xinjiang cotton professional qualification warehouse, one is to increase public library regulators seized during various fees and costs; the other on the one hand, the latter selling cotton cotton processing enterprises may be subject to regulation at the library, so that the speed of selling cotton cotton out of the library when the slow, delay payment of.
For such expectations, we recommend ginners With the futures market, the use of hedging to sell this year's cotton business escort.
In summary, the 2014 change of policy by purchasing and storage subsidies, the lack of substantive policy support; while the overall supply and demand pattern change for the better, but the high inventories continued to increase, expected in the new year cotton prices upward pressure, the main cotton Zheng 1501 contract to run a large downward trend will shock bottom.