According to feedback from some cotton supervision warehouses in Urumqi, Kuitun, Aksu and other places, since late July, Xinjiang’s cotton truck shipment volume has continued to show a significant rebound. Northern Xinjiang’s performance is relatively outstanding, and the key flows are Henan, Anhui, Shandong, and Jiangsu. In other places, Xinjiang cotton sales are slowly increasing in 2021/22.
Industry analysis can be summarized into three aspects for the reasons for the continuous increase in road shipping volume: First, the first batch of central reserve cotton in 2022 has been launched since July 13, and the bidding transactions or the cotton processing enterprises in Xinjiang that plan to participate in the reserve Timely delivery to the storage warehouse; secondly, since mid-July, the price of Zheng Cotton’s main CF2301 contract has continued to consolidate in the 14,000-15,000 range. The market and market confidence have stabilized, and the panic mentality of terminals such as cotton spinning, weaving, and fabrics has gradually subsided. The warehouse replenishment operation at bargain hunting is carried out in an orderly manner; third, considering that as of the end of June, the commodity cotton turnover inventory in Xinjiang is still as high as more than 2.75 million tons (statistics from the Cotton Logistics Branch of the China Cotton Association, as of the end of June, the commodity cotton turnover inventory of 43 warehouses in Xinjiang (2.7539 million tons, an increase of 1.2415 million tons year-on-year), and there are currently less than two months until Xinjiang cotton is launched in 2022/23. Therefore, moving warehouse sales to inland consumption areas has become an effective option for cotton processing in Xinjiang. It is reported that some regulatory warehouses have notified cargo rights parties to speed up cotton shipments to free up storage capacity for new cotton to be launched in 2022/23.
Judging from the current quotations of cotton trading companies and Xinjiang cotton companies, the price difference between cotton prices in warehouses inside and outside Xinjiang is about 600-700 yuan/ton, which is more than 50 yuan/ton higher than that in early and mid-July. On the one hand, with the increase of melons, fruits, tomatoes, etc. in Xinjiang, A large number of agricultural products are on the market, the demand for short-term transportation has increased significantly, and the number of vehicles returning to and leaving Xinjiang has continued to decrease. On the other hand, affected by many factors such as large inventories and tight cash flow, some ginning factories in Xinjiang have adopted “basis reduction, sales The operation of “spot goods and clearance orders” has depressed the spot price of cotton in Xinjiang’s warehouses.
A cotton processing company in Aksu said that currently more than 60% of ginning plants in southern Xinjiang have begun machine maintenance, equipment, fire protection and safety facility maintenance. The focus of attention and discussion has also shifted to the growth, quality and safety of Xinjiang cotton in 2022/23. As for the opening price of seed cotton, as the market price of Zheng cotton CF2301 contract fell below 14,000 yuan/ton on August 2, the oscillation range returned to 13,000-14,000 yuan/ton, and ginners generally plan to control the comprehensive cost of lint cotton in storage next year. Within 13,000 yuan/ton (gross weight, including short-term dumping, supervision warehouse “lump fee”, financial costs, etc.), otherwise there will be no profit margin for hedging, and the acquisition and processing risks will be too high.
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