Recently, some cotton supervision warehouses in Xinjiang have reported that inventory pressure has increased significantly compared with November. Coupled with the cooling and precipitation weather, the declaration of warehousing, loading and unloading, and outbound warehouses have been affected to a certain extent. Some warehouses no longer have excess storage capacity.
Since mid-October, cotton road shipments in Xinjiang have been relatively sluggish, and the progress of lint cotton transfer to warehouses lags behind that of 2020/21. The main reason is that the sales progress of lint cotton is slow, and cotton traders and cotton spinning mills are not enthusiastic enough to enter the market for procurement. In addition, after September 2021, new cotton with an impurity content higher than 3.5% cannot be registered for warehouse receipts. There is no good hedging opportunity for superimposed new cotton. Therefore, the storage pressure of Zheng cotton delivery warehouse in Xinjiang is actually lower than that of most non-delivery warehouses. library.
According to a survey by the National Cotton Market Monitoring System, as of December 23, 2021, the national lint cotton sales rate was 16.2%, a year-on-year decrease of 22.1 percentage points, and a decrease of 15.3 percentage points from the average of the past four years; of which Xinjiang cotton sales progress was 15.2%. In late December, Xinjiang cotton sales progress was slightly higher than 15%, which should be the low point in recent years, indicating that currently almost all seed cotton and lint resources are in the hands of various cotton companies and ginners.
Why is Xinjiang cotton sales progress slow in 2021/22? The reasons analyzed by the industry are as follows: First, a large amount of cotton reserves will be rotated out in 2021, while effectively ensuring the demand of cotton-using enterprises, causing cotton textile mills to delay the replenishment of new cotton in 2021/22; second, the cost of Xinjiang cotton is high, and it is speculated that the cost in storage Reaching 23,000-24,000 yuan/ton (gross weight), the current price difference of cotton has also reached 1,000-2,000 yuan/ton. Therefore, cotton processing companies cannot accept the basis price quotations given by traders, and it is difficult to start transactions, prompting traders to only go through ” “Fit price” purchases high-index lint cotton to achieve hedging; third, the sales of Xinjiang cotton with impurity content higher than 3.5% has become a problem. Because warehouse receipts cannot be registered, unless there is a guarantee that a cotton mill customer will receive the goods, traders will be very reluctant to inquire about prices and receive goods. Fourth, local epidemics have recently occurred in Jiangsu, Zhejiang, Shaanxi and other provinces, and various regions have stepped up epidemic prevention and control efforts. Drivers’ willingness to travel to Xinjiang is relatively low, which has affected cotton sales and transportation in 2021/22 to a certain extent (some mainland textile companies require delivery to factories).
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