In late November, the cotton purchase work has basically ended. Since it is the end of harvest, the quality of seed cotton has declined, and the price has dropped accordingly. The price of machine-picked seed cotton in Xinjiang is 9.5-9.8 yuan/kg, and the price of hand-picked cotton is 10.4-10.9 yuan/kg. . The purchase price was relatively high at the beginning of this year’s scale opening. The average purchase price for machine-purchased products in northern Xinjiang was around 10.5 yuan/kg, while the price for machine-produced products in southern Xinjiang was mostly 10 yuan/kg. This resulted in a large gap in lint production costs between northern and southern Xinjiang.
According to a survey of production enterprises in Xinjiang, the outflow of lint in the new year faces a major bottleneck. The main problem lies in the contradiction between high costs and low purchasing power. Before October, the shipment of some lint cotton was acceptable, but in the later period, the price of lint cotton rose sharply, and the execution of some contracts became more difficult, resulting in a deadlock in purchase and sale. Recently, as the price of seed cotton has dropped, the outflow of lint cotton has shown signs of increasing, but most of them are taken over by middlemen, and downstream textile companies are not very interested.
This year’s textile peak season is not prosperous, and Christmas orders have basically ended. The ensuing off-season market may face a shortage of orders. Downstream yarn inventory has accumulated, and the operating pressure of textile companies continues to increase. In order to reduce costs and expand the proportion of low-grade raw materials, some yarn companies have even begun to adjust product types and shift to polyester-cotton yarn and purified fiber yarn. According to relevant media statistics, the total inventory scale of 88 A-share textile and apparel companies listed on the market was as high as 97 billion yuan. However, the total revenue of these 88 companies in the first half of the year was only 113.7 billion yuan. And judging from the latest third quarter report of A-share listed apparel companies in 2021, the overall inventory backlog situation has not improved. Therefore, the short-term demand is not good, the pressure for new cotton to be launched is increasing, and the cotton market is hardly positive.
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