Currently, the cotton harvest in Xinjiang is nearing completion. As of November 15, the cotton picking progress in Xinjiang was 94.9%, 3.5 percentage points slower than the same period last year; the delivery progress was 94.0%, 3.1 percentage points slower than the same period last year. The machine-picked cotton harvest in Xinjiang has basically ended. The rate of machine-picked cotton in northern Xinjiang is 98.7% and the rate of machine-picked cotton in southern Xinjiang is 79.1%. Hand-picked cotton is still in progress and is expected to be completed by the end of November. So, what is the cotton output and quality of Xinjiang this year? What changes have occurred in the cotton purchase price? What is the future direction of cotton prices?
Cotton quality is higher than in previous years
Under the guidance of standardization and intelligent industry standards, my country’s cotton planting, processing, and sales are undergoing new changes. Wang Jianhong, Vice President of the China Cotton Association, said: “The China Cotton Association has issued the “China Cotton Production Management Standards”, which involves the entire cotton and textile industry chain. We hope to promote high-quality, high-quality, and high-quality cotton industry in my country through the implementation of the China Cotton Sustainable Development Project. sustainable development.”
According to reports, Yuli County in Xinjiang is a county producing high-quality commercial cotton in the country. Currently, 1.25 million acres of local cotton has entered the final harvesting period. Large cotton pickers roar in the fields, producing a heavy cotton every 10 minutes. Cotton bales up to 2 tons. They are nicknamed “golden eggs” by cotton farmers. Cotton farmers don’t have to worry about it. These bulky “golden eggs” are automatically harvested and packaged by the cotton picking machine. Local cotton farmers said that this year’s cotton yield per mu increased by 70 to 80 kilograms compared with previous years, and the harvest was very good.
Different from traditional cotton planting and management methods, this batch of cotton is grown in strict accordance with the requirements of the “China Cotton Production Management Standards”, and all aspects of seed selection, fertilization, agronomic operations, etc. are fully recorded. Multifunctional seeders, global satellite navigation systems, drones, and large-scale cotton pickers are applied in sequence according to the production process, with mechanized and intelligent control of the entire production process.
At the same time as the production mode is changing, the National Cotton Trading Market of the Federation of Supply and Marketing Cooperatives has given full play to its role as a comprehensive service platform for standardized trading of national commercial cotton, focusing on multiple links from planting, acquisition, processing, warehousing, inspection, and outbound to textile enterprise procurement, etc., to improve Cotton competitiveness. Every bale of cotton ginning at the ginnery factory will have a unique “ID card” – a cotton quality traceability system barcode.
“Due to the impact of some weather disasters during the planting period, the market expects Xinjiang’s cotton output this year to be lower than last year. Xinjiang’s cotton output is currently estimated to be around 5.2 million tons.” Industry insiders said that from the perspective of domestic supply and demand, if only Relying on domestic cotton cannot meet market demand. It is still necessary to rely on the release of national cotton reserves and cotton imports to meet domestic cotton demand.
Although the market expects that Xinjiang’s cotton output this year may be lower than in previous years, the quality of cotton is higher than in previous years. According to industry insiders, the quality of cotton in the new year has been improved in multiple dimensions from planting to cotton picking to final processing. Therefore, the length, strength and horse value of this year’s cotton are all better than last year. However, due to weather factors, some green leaves have not yet fallen off when new cotton is picked, resulting in an increase in impurities. “In addition, the purchase price of seed cotton this year is relatively high, and some cotton farmers have added impurities to the new cotton, causing the new cotton to contain higher impurities this year.”
Not only is the quality of cotton this year higher than in previous years, but the purchase price of cotton is also far higher than last year. High cotton prices have stimulated growers to increase their cost investment, with costs increasing by 600 to 800 yuan per mu compared with last year, mainly in terms of manpower, fertilizers and land contract fees. Cotton farmers hope to optimize the subsidy policy, and the call for quality subsidies is getting louder and louder. Cotton farmers are eager to obtain more income through high quality and low price.
Cotton yarn market is shrinking
As the country continues to dump reserves into the market, the current overall cotton market is in a state of loose supply. According to industry experts, since July 5, as of November 12, a total of 1.2373 million tons of cotton from the state reserve have been released, and the actual transaction volume was 1.0443 million tons. In the new round of stockpiling, imported cotton has also been increased, which also meets the market demand for high-grade cotton. Overall, the supply side maintains a loose atmosphere.
In terms of the international market, experts said that from the supply side, global cotton will be relatively tight in the new year. India will increase tariffs on imported cotton by 10% this year. Indian cotton company inventories have basically dropped to zero, and Indian cotton exports will be minimal. Less, and there is a certain expectation of a reduction in U.S. cotton production in the new year.
Experts believe that the current domestic cotton market should focus on the demand side. If the overseas epidemic situation stabilizes, domestic textile export orders will increase. “From the perspective of China’s textile exports to the United States, there was a significant increase in October. However, it should be noted that the export situation to the United States from the fourth quarter of this year to the first half of next year is still not optimistic. At present, from the perspective of downstream demand, through and textile According to the company’s communication, the current cotton yarn orders are relatively lower than those before September, and shipments are not very good. Relevant data shows that cotton yarn and gray fabric inventories increased month-on-month from September to October. Textile companies generally reported that sales were not good and the peak season was not prosperous. Maybe some low-count yarns can reach production and sales levels.Balance, the main reason comes from the substantial increase in raw material prices, and the downstream acceptance of high prices is not good. ”
Affected by this, the prosperity of the cotton textile industry, which was high in the early stage, has declined. Recently, more textile companies have slightly lowered their quotations for cotton yarn, and the focus of cotton yarn transactions is slowly shifting downwards. In October this year, the Purchasing Managers Index of China’s cotton textile industry was 36.06%, down 5.16 percentage points from the previous month. The market sentiment index continued to decline, and the index was still below the 50% boom-bust line, indicating that the market continued to shrink.
Cotton prices may remain high and oscillate in the short term
In fact, the price of 2201, the main contract of cotton futures, has risen sharply since the beginning of this year. In September, the market price rose rapidly. The sharp increase in planting costs this year made the opening price of seed cotton purchase significantly higher than the same period last year. Subsequently, in the ginner In the battle for cotton, cotton prices have been rising steadily, only one step away from 23,000 yuan/ton.
In this regard, industry insiders said that cotton prices will show an upward trend in the second half of this year, on the one hand because of better early consumption, and on the other hand because the cost of purchasing cotton in Xinjiang has increased significantly after the National Day. “Although cotton futures prices have risen significantly in the early stage, the current market price is still at a discount to the spot price. Based on the current cost price of seed cotton acquisition, which is equivalent to the cost price of lint cotton, the mainstream price of cotton in Northern Xinjiang is around 24,500 yuan/ton. Cotton in southern Xinjiang is around 23,500 yuan/ton. In contrast, the main cotton contract 2201 has been upside down.”
Industry insiders said that this year’s Xinjiang seed cotton purchase has slowly come to an end. Although the seed cotton purchase price has declined in the later period, the high cost in the early stage has caused the lint cost to be inverted with the market this year, which has supported cotton prices to a certain extent. In addition, judging from this year’s new round of stockpiling plans, in addition to real estate cotton and Xinjiang cotton, the cotton stockpiles this time also include imported cotton, and the daily selling volume changes according to changes in market conditions, so in the short term, The upward trend in the market will create a certain amount of pressure. However, judging from the years of cotton sales, in addition to the old cotton in 2013, there is also cotton in 2018. There is not much cotton left in the state reserve stockpile, and it is unlikely that the stock will continue to be sold. In terms of demand, the current downstream market remains weak, with fewer overall orders. Due to the high cost of raw materials in the new year, and as the textile industry in Southeast Asian countries resumes production and resumes work, some orders flow out again, domestic demand will be affected to a certain extent. Overall, cotton prices may remain high and oscillating in the short term.
According to analysis by industry insiders, the country still adopts a policy of ensuring price and stable supply of bulk commodities. “From this policy perspective, if cotton prices rise again in the future, the country may increase its reserve sales and even suppress domestic cotton prices through imports. However, the final cotton price still depends on end consumption, and specific attention needs to be paid to the US pressure on Hong Kong goods In the past few months, textile orders may decrease during the digestion of the goods that are pressed into the port. New orders may not appear until the goods that are pressed into the port are digested, which is expected to be around the mid-to-late second quarter of next year.”
In addition, industry insiders analyze that cotton futures prices are expected to be mainly range-bound during the year and will move towards the return of futures prices. Next year’s cotton market should first depend on whether the consumer market can accept the current price and whether there are enough orders to be transmitted smoothly. If so, the price will still maintain a good trend, otherwise the possibility of a phased decline cannot be ruled out.
</p
