According to a sample survey of 71 textile companies in 14 provinces, municipalities and autonomous regions across the country by the National Cotton Market Monitoring System, as of early September 2023, the average cotton inventory usage days of the sampled companies was approximately 28.3 days (including the amount of cotton imported to the port). ), an increase of 3.2 days month-on-month, a decrease of 2.1 days year-on-year, and a decrease of 5.1 days compared with the average level of the same period in the past five years (i.e., 2017-2022, excluding 2020, the same below). It is estimated that the national cotton industry inventory is about 597,000 tons, an increase of 12.6% month-on-month, a year-on-year decrease of 6.7%, and a decrease of 16.3% compared with the average level of the same period in the past five years. The cotton industry inventory situation in major provinces across the country is different. The cotton industry inventory discount days in Shaanxi, Jiangsu, and Hebei provinces are relatively high.
The purchasing intention survey shows that in early September 2023, 54.5% of the companies are preparing to purchase cotton, an increase of 4.5 percentage points from the previous month, a decrease of 2.8 percentage points year-on-year, and a decrease of 7.9 percentage points from the average level of the same period in the past five years; 42.4% have a wait-and-see attitude , a month-on-month decrease of 3.2 percentage points, a year-on-year increase of 1.2 percentage points, and a 7.2 percentage point increase over the average level of the same period in the past five years; companies that do not plan to purchase cotton accounted for 3%, a month-on-month decrease of 1.4 percentage points, a year-on-year increase of 1.6 percentage points, and an increase of 1.6 percentage points over the past five years. The average level during the same period last year increased by 0.7 percentage points.
The survey on cotton allocation intentions shows that in early September 2023, 89.4% of the sampled companies intend to stabilize the cotton allocation ratio, a decrease of 4.5 percentage points month-on-month, an increase of 5.3 percentage points year-on-year, and an increase of 0.7 percentage points over the average level of the same period in the past five years; 6.1% of the companies intend to stabilize the cotton allocation ratio. They plan to increase the cotton allocation ratio, an increase of 1.5 percentage points month-on-month, and a year-on-year increase of 0.3 percentage points, which is the same as the average level of the same period in the past five years; 4.5% of companies plan to reduce the cotton allocation ratio, an increase of 3.0 percentage points month-on-month, and a year-on-year decrease of 5.6 percentage points. It is 0.8 percentage points lower than the average level of the same period in the past five years.
Due to the general decline in cotton planting area in Xinjiang and the mainland this year, industry players are full of confidence in the positive support brought by the reduced cotton production in the new season. Therefore, in mid-August, some cotton-related trading companies and ginning companies began to pre-sell new cotton in advance, hoping to lock in profits as soon as possible and avoid market risks. However, after entering September, the high level of Zheng cotton fell back, and the yarn inventory of downstream textile companies was high. Market parties’ expectations for new cotton prices were greatly reduced. At the same time, the basis difference for pre-sales of new cotton by some cotton companies is mostly 600-1,000 yuan/ton. However, the bullish momentum has weakened recently, and the market’s expectations for the processing cost of new cotton have declined. The basis difference for pre-sales has been gradually reduced, so that transactions can be achieved. .
A medium-sized ginning factory in Shaya said that all employees are currently ready to start large-scale machine-picked cotton purchases (“pre-sale” of hand-picked cotton by local farmers has started for nearly a week, and there is no pricing). Whether it is the recent purchase price of 8.6-8.9 yuan/kg of seed cotton in inland cotton areas such as Anhui, Jiangxi, and Hebei, or the purchase price of 9.5 yuan/kg of hand-picked cotton in Bachu, Jiashi, Maigaiti and other places, the processing Enterprises feel pressure, and the opening price is significantly higher than the enterprise’s expectations. It is not ruled out that some cotton companies may passively postpone the opening of acquisitions.
In addition, in order to minimize the uncertain impact of market price fluctuations after the new cotton is weighed, some cotton ginning companies have begun to pre-sell cotton seeds. According to the quotations of cotton enterprises, the current pre-sale price of cotton seeds in northern Xinjiang is 3.05-3.1 yuan/kg, and the pre-sale price in southern Xinjiang is 3.2 yuan/kg. According to feedback from the person in charge of a ginning company, some cotton seeds are pre-sold in advance. Part of the funds can be prepared to prepare for the acquisition of seed cotton, and it can also provide enterprises with certain competitive opportunities.
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