The curtain of the annual Xinjiang seed cotton purchase has slowly come to an end, and cotton farmers’ pockets are finally bulging. Against the background of this year’s sharp rise in cotton prices, Xinjiang’s cotton market has seen some new changes, which are impressive.
Cotton farmers fought a beautiful turnaround
How good are farmers’ profits from cotton planting this year? The official gave an authoritative answer. On November 10, the Xinjiang Uygur Autonomous Region held a special press conference on cotton in Urumqi, introducing the development of Xinjiang’s cotton industry. Xinjiang’s cotton output is expected to reach about 5.2 million tons this year. Affected by the high cotton market price, the average net income per mu of cotton exceeds 1500 yuan. The average net income per mu reached 1,500 yuan, which is also a very high year in the entire history of cotton planting in China. Xinjiang is vast and sparsely populated. Many farmers have more than 100 acres of cotton planting area, and a few large households have thousands of acres of cotton planting area. If you calculate carefully, the income from cotton planting is very considerable. If calculated based on Xinjiang’s cotton output of 5.2 million tons, the net income of Xinjiang cotton farmers reached 7.8 billion yuan.
It is understood that Xinjiang is rich in economic crop resources, with a wide planting area of tomatoes, peppers, sugar beets, red dates, apples, etc. However, in terms of profitability, cotton is the envy of other varieties. A local cotton farmer in Aksu said: “The purchase price of seed cotton this year has reached more than 10.5 yuan/kg. The price has met psychological expectations. I am very satisfied with this year’s income.”
Things are rare and the humble cotton is finally favored
“Things become more precious when they are scarce, and love becomes more kind as we age.” In previous years, the price of seed cotton was only 6-7 yuan/kg. This year, the price has risen to 10-11 yuan/kg, an increase of more than 60%. In the context of the obvious increase in cotton prices, waste has been well curbed. This is the power of the market.
The cotton harvest in northern Xinjiang is coming to an end, and many cotton fields have begun secondary picking. In previous years, when prices were low, most cotton farmers gave up on secondary harvesting, simply because the cost of picking was not worth it, and the value and significance of secondary harvesting could not be reflected. . This year is different. Most cotton farmers plan to harvest the second crop. Driven by high prices, the economic value of the second crop has been well reflected.
Friends who have been to Xinjiang must know very well whether the cotton fields have experienced secondary mining operations. After all, the intuitive performance is quite obvious. In the face of the gifts of nature, sometimes humans are too generous and should cherish them. After all, these are the fruits of hard work.
The machine-picked rate has increased significantly and hand-picked cotton has rapidly decreased.
The wheel of the times rolls forward and does not change due to human will. In the past two years, the proportion of mechanical procurement in Xinjiang has increased faster than imagined. Five years ago, professionals were still discussing how to increase the proportion of mechanical procurement in Xinjiang, and listed many difficult conditions, such as the small land area in southern Xinjiang, which is not conducive to large-scale mechanized operations, and of course there are many other restrictions. Looking back now, northern Xinjiang has already achieved 100% mechanical procurement, and the proportion of mechanical procurement in southern Xinjiang has reached more than 60%. This is related to the land transfer and epidemic situation in recent years. The concentration of land and the restriction of personnel movement have forced cotton farmers to choose mechanical procurement. Pick.
In addition, the price is attractive. The cost of manual picking in Xinjiang is 2.2 yuan/kg, and the cost of machine picking is 0.6 yuan/kg. The difference between the two is 1.6 yuan/kg. The actual difference in the selling price of machine-picked cotton and hand-picked cotton is Within 1.0 yuan/kg. What’s more, machine-picked cotton has a high water and impurity content, and the picking weight is more advantageous for the same cotton area. Under the conditions of obvious comprehensive advantages, cotton farmers are more willing to accept mechanical harvesting. The once mighty special train of flower pickers has become a scene in historical memory.
Ginning companies do not process cotton, but instead sell cotton
In my impression, it is unprecedented for a ginning company to abandon its main business of cotton processing and start selling seed cotton instead. This year, the purchase price of futures cotton has jumped to more than 22,000 yuan/ton. Even if there is a slight correction in the middle, the amplitude is very limited and continues to run at a high level. Moreover, the inversion of cotton futures price is also at a historical high. Under such circumstances, the acquisition and processing of cotton by ginning companies is like being involved in a highly risky gamble, and they may face huge losses if they are not careful.
Under such risks, ginning companies with vast cotton-growing land began to switch to selling seed cotton. There have been many such phenomena this year. In order to compete for resources, some ginning companies in Xinjiang have long begun to allocate land resources to grow cotton themselves, so that they can better control the quality and price of seed cotton, and improve the quality of lint processing and final profits. This year, the income from cotton planting in the private land is considerable. Based on the land scale of 10,000 acres, the company’s income from cotton planting alone has reached 15 million yuan. According to the author’s understanding, the scale of land contracted by enterprises is very large, ranging from tens of thousands of acres to hundreds of thousands of acres or even millions of acres. Even if the own ginning factory does not purchase cotton, the income from cotton planting alone can cover the ginning. The cost of operating a flower factory. Furthermore, selling seed cotton is a certain income,�The sales of processed lint face great risks. The two powers benefited from each other, and after comparison, the ginner actually made a wiser choice.
Cotton futures basis is at historically high levels
The average cost of cotton in Xinjiang this year should be around 23,000 yuan/ton. The current futures price is 21,500 yuan/ton. The difference between the two is 2,000 yuan/ton. If the market is to provide hedging profits, it needs to increase significantly. At present, the state’s stance on regulating the cotton market is firm. From July this year to the present stage, the total volume of auctions plus placement has exceeded 1 million tons. The market outlook will also adjust the volume at any time based on price conditions, which will undoubtedly have a negative impact on the market. Very strong pressure. Cotton prices will continue to bear a heavy burden in the future.
As the world’s most important central bank, the Federal Reserve has stated that it will reduce the scale of its bond purchases, which means that monetary policy has reached a peak and has turned. In the process of gradually recovering, it will be difficult for cotton prices to continue to reach new highs. If the Zheng Cotton market does not provide hedging profits, the cotton purchased by the company at a high price will be risky. Without risk hedging, it means losing the initiative, just like the flesh on the chopping board being cut by others. Compared with cotton farmers, there is a world in heaven and an abyss underground.
At the end of the article, the author continues to remind us of the risks. I cannot get carried away with my pride. This year it is the turn of cotton farmers to make a comeback. I don’t know whose turn it will be next year. Don’t be depressed when you are pessimistic, prepare for a rainy day when you are happy, and especially take early warning when good times come, so that you can sail for a long time in the market storms.
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