This week, the epidemic rebounded sporadically in some areas of the country, and downstream cotton production and logistics were hindered to varying degrees. Coupled with the slowdown in textile and apparel export growth in August and the sharp fall in ICE cotton prices, domestic cotton prices continued their decline. From September 5 to September 9, 2022, the average price of the national cotton price B index, which represents the market price of standard-grade lint cotton in the mainland, was 15,852 yuan/ton, a decrease of 130 yuan/ton or 0.8% from the previous week. The average settlement price of the main cotton futures contract on the Zhengzhou Commodity Exchange was 14,455 yuan/ton, a decrease of 417 yuan/ton or 2.8% from the previous week.
At present, the opening scale price of 7.0 yuan/kg has appeared one after another in southern Xinjiang. Some people think that the price is on the high side and higher than market expectations. Some people think that the price is reasonable and in line with the futures and spot market conditions. So does the current opening scale price have reference value?
The editor believes that this needs to be analyzed in detail. Nowadays, all the cotton purchased by Nanjiang scales is hand-picked. The cost of hand-picked cotton is higher than that of machine-picked cotton. According to last year’s calculations, the cost of manual picking of seed cotton was 2.0-2.5 yuan/kg, while machine-picked cotton cost 2.0-2.5 yuan/kg. The cost of seed cotton is about 0.6 yuan/kg. The difference in picking costs makes the selling price of machine-picked cotton lower than that of hand-picked cotton. In addition, the purchase price of hand-picked cotton is higher because of its low impurity content, long fiber, and relatively high quality after processing. good.
It is understood that the peach blossoms picked now have short and thick fibers and high horse value. They are generally processed into cotton. Depending on the use, the purchase price of seed cotton used to process cotton is higher than that of textile cotton. Xinjiang cotton is used every year. The processing volume is only 200,000 to 300,000 tons, accounting for a very low proportion of Xinjiang’s total cotton output. Therefore, the representativeness of cotton wadding is not strong, and its impact on the overall price of Xinjiang cotton is very limited.
Based on the above factors, we should treat the recent opening scale prices calmly. New cotton has not yet been launched in large quantities. Some companies are more of a trial mentality. Furthermore, there are few opening scale companies. The prices at this time are not universal and cannot be It truly represents the cost of Xinjiang cotton in the new year.
Although the current opening scale price does not have much reference value, the price lower than last year has shown that the price of later listing is not optimistic. As for whether it will open low and go high, or open high and go high, or other trends in the later period, it is also full of variables. You need to always pay attention to market dynamics and fundamental changes, and maintain an objective mentality.
【Outlook】
The new cotton harvest has arrived, but consumption has not yet shown a significant improvement. Domestic cotton prices are mainly cautious. On September 7, the State Council executive meeting conveyed a signal to further expand the policy to stabilize growth, focusing on promoting employment, boosting demand, encouraging innovation and further accelerating infrastructure investment. In the cotton market, new cotton has been weighed in mainland China in recent days. The price is mostly 6-7 yuan/kg, but cotton farmers are generally reluctant to sell. Xinjiang cotton is in its peak spun-out period, and picking is expected to begin in mid-to-late September. Some processing companies in Aksu and other places reported that the pre-purchase price of hand-picked cotton is within 7 yuan/kg.
From a downstream perspective, with the recent increase in market inquiries, textile and downstream companies have resumed some production lines in a small amount, and winter orders have been placed, mainly for rigid demand orders. Superimposed on the sporadic spread of domestic epidemics, textile production in Yuncheng, Shandong, Anyang, Henan and other regions has been affected. Affected by the continued high inflation and rising clothing inventories in major export markets such as the United States and Europe, my country’s textile and clothing exports halted their early rapid growth momentum in August, with year-on-year growth slowing down to only 2.9% and a month-on-month decrease of 6.8%. Exports in September The situation is hardly optimistic. To sum up, the terminal domestic and external demand situation is still relatively pessimistic. With the upcoming supply of new cotton, the Xinjiang cotton procurement market has attracted much attention. Before a large number of scales are opened, domestic cotton prices are expected to be cautious.
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