In 2021, cotton prices at home and abroad have risen sharply and hit a high in the past 10 years. The national cotton output is stable and slightly decreased, the purchase price of new cotton is running at a high level, and the quality is better than last year. Domestic policies remain stable, cotton reserves are rotated out in an orderly manner, imports continue to increase, and market supply is relatively sufficient.
1. Cotton prices rise to historical highs
In 2021, cotton prices will rise sharply due to factors such as domestic and foreign macroeconomic conditions and continued strong demand for cotton. Before and after the launch of new domestic cotton, cotton prices increased even more, exceeding 20,000 yuan/ton after the National Day. The China Cotton Price Index (CCIndex3128B) hit its highest point in the past 10 years at 22,713 yuan/ton on November 18, and then began to gradually fall. On December 31, China’s cotton price index CCIndex (3128B) closed at 22,107 yuan/ton, a year-on-year increase of 47.7%; the annual average price was 17,892 yuan/ton, a year-on-year increase of 38.4%. During the year, the international market spot price rose slightly higher than the domestic one. On December 31, the CotlookA index reached 127.20 cents/pound, a year-on-year increase of 50.4%; the annual average price was 101.4 cents/pound, a year-on-year increase of 40.9%. The average price difference between domestic and foreign cotton throughout the year was 1,759 yuan, with the maximum price difference being 3,887 yuan and the minimum price difference being 523 yuan.
2. The purchase price of seed cotton has increased significantly, and the quality of new cotton has improved.
Since the launch of new cotton in 2021, the purchase price of seed cotton has increased significantly year-on-year due to factors such as higher cotton futures and spot prices. As of November 30, the average purchase price of 3128-grade seed cotton in the country’s 400-type cotton processing enterprises was 10.1 yuan/kg, a year-on-year increase of 55%. Looking at different regions, the average purchase price in Xinjiang was 10.1 yuan/kg, a year-on-year increase of 55%; the average purchase price in the mainland was 9.5 yuan/kg, a year-on-year increase of 53%.
According to data from the China Fiber Quality Monitoring Center, the quality of new cotton has improved significantly this year. As of December 31, cotton with a length of 29 mm and above accounted for 65.9%, 42.1 percentage points higher than the same period last year; white cotton grade 3 and above accounted for 85.2%, 0.7 percentage points higher than the same period last year; micronaire A+B grade accounted for 85.2%. Compared with 85.7%, a year-on-year increase of 18.8 percentage points; the fracture ratio strength level and above accounted for 44.8%, a year-on-year increase of 23.2 percentage points.
3. The cotton reserves are being rotated out in an orderly manner, and companies are actively bidding.
In 2021, a total of 1.2036 million tons of reserve cotton were traded, which was conducted in three stages: from July 5 to September 29, the total listed volume was 631,000 tons, and 100% of the transactions were completed; from October 8 to November 9, 2021, the third A total of 646,500 tons of central reserve cotton were put on the market, with a transaction volume of 395,600 tons, and a transaction rate of 61%. From November 10 to 30, a total of 266,000 tons of central reserve cotton were put on the market, with a transaction volume of 177,000 tons, and a transaction rate of 61%. 67%, this time increased the number of imported cotton, and both Xinjiang cotton and imported cotton were sold 100%.
The rotation of cotton reserves began on December 1, 2020, and as of March 31, 2021, as the price difference between domestic and foreign cotton continued to exceed 800 yuan/ton, the rotation was not started.
4. Xinjiang’s cotton output continues to increase
Data released by the National Bureau of Statistics show that the country’s total cotton output in 2021 will be 5.731 million tons, a decrease of 180,000 tons or 3.0% compared with 2020. Among them, Xinjiang’s cotton output was 5.129 million tons, a decrease of 32,000 tons or 0.6% from the previous year, accounting for 89.5% of the country’s total, an increase of 2.2 percentage points from the previous year. The national cotton planting area continues to decline. In 2021, the national cotton planting area was 45.422 million acres, a decrease of 2.112 million acres or 4.4% from the previous year. In terms of regions, the cotton sown area in Xinjiang has increased. The main reason is that the country continues to implement the cotton target price subsidy policy for the region. In addition, the cotton price has increased since last year. Farmers’ enthusiasm for cotton planting has been relatively stable. The cotton sown area is 37.591 million acres, which is 37.591 million acres, which is 37.591 million acres, which is 37.591 million acres. An increase of 62,000 acres, an increase of 0.2%. Affected by factors such as planting efficiency and planting structure adjustment, the cotton sown area in other cotton areas was 7.831 million acres, a decrease of 21.7%. It has been declining for 13 consecutive years since 2009. Xinjiang’s sown area accounted for 82.8% of the country’s total, an increase of 3.9 percentage points from the previous year.
5. Cotton import volume increased year-on-year
According to customs statistics, my country imported a total of 2.008 million tons of cotton in the first 11 months of 2021, a year-on-year increase of 11.4%. Among the source countries, the United States ranks first, accounting for 40%; Brazil ranks second, accounting for 28%; India ranks third, accounting for 20%.
On April 30, relevant national departments issued an announcement that in order to ensure the cotton needs of textile enterprises, it was decided after research to issue a certain amount of cotton import quotas with preferential tariff rates in addition to the tariff quotas (referred to as cotton import sliding tax quotas) this year. The quantity is 700,000 tons, all of which are non-state trade quotas. Among them, 400,000 tons are restricted to processing trade imports; 300,000 tons are not restricted to trade.
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