After entering November, seed cotton picking in Northern Xinjiang has gradually ended. After snowfall occurred in many places last week, it delayed the sales plans of some cotton farmers who had not yet completed the sales. In recent days, cotton farmers have been rushing to find transfer vehicles to bring a successful end to this year’s farming harvest. At the end of harvest, the price of seed cotton has basically remained at around 10 yuan/kg, and the price of some low-lint sources is around 9.6-9.8 yuan/kg. After the acquisition of seed cotton is over, the lint cost of ginning companies is also a foregone conclusion according to common sense. However, some ginning companies said that the current lint cost is still unstable.
For this reason, after investigating a number of cotton manufacturers, the author found that the lint production cost of ginning companies mainly depends on two factors, one is the price of raw material seed cotton, and the other is cotton seed. Extra income. After the seed cotton acquisition is over, it can only be said that the company’s raw material acquisition costs have been locked in, but its income mainly depends on the cotton seed sales price and lint sales price.
Cotton seed sales. Before November, the price of cottonseed in Northern Xinjiang generally reached 3.3-3.4 yuan/kg, which correspondingly diluted the cost of lint. However, after November, the price of cottonseed gradually declined, approaching the 3 yuan/kg mark. Most ginning companies started production and processing at the end of October. As a result, their additional cottonseed income declined, further increasing the pressure on lint shipments. According to rough estimates, cottonseed fell by 0.1 yuan/kg, and the cost of lint increased by 150 yuan/ton. Therefore, many manufacturers’ floating losses expanded again.
Lint sales. Recently, after the price of foreign cotton futures dropped from 120 cents/pound, the cost-effectiveness advantage of foreign cotton has been strengthened again. Some US cotton and Brazilian cotton are quoted at 23,000 yuan/ton and 22,500 yuan/ton respectively. They have both quality advantages and advantages over Xinjiang cotton. The price advantage is very attractive to downstream textile enterprises. It is also worth noting that the inversion of futures and spot goods not only hinders the registration of warehouse receipts, but also the enthusiasm for moving Xinjiang cotton spot goods to the mainland is not high. In previous years, the period when new cotton was on the market was considered an excellent time to purchase raw materials, but this year only a handful of mainland merchants went to Xinjiang to purchase. Therefore, in the short term, manufacturers can only continue to wait and see, and cotton companies are still worried. </p
