After Xinjiang cotton came on the market in 2020, there was a large-scale rush to harvest locally, and the price of seed cotton also rose all the way to about 8 yuan/kg. As the operating profits of most ginning companies increased significantly last year, this greatly stimulated the enthusiasm of foreign contractors to go to Xinjiang for contracting this year. As the time for new cotton to be launched is approaching, the market focus has gradually shifted from the growth of new cotton to the launch time and opening price of new cotton.
In order to understand the launch time and opening scale price of new cotton in Xinjiang, reporters from China Cotton Network conducted a survey on multiple local contact points. After multiple inquiries, some companies said that this year’s opening of the weighing time has been delayed due to factors such as the low-temperature replanting of new cotton in the early stage, the cotton fluffing period may be extended, the market is expected to rush for harvest, and the wait-and-see mood of companies and farmers is high. However, overall Pretty much the same as last year. In terms of output, according to data from the National Cotton Market Monitoring System, the country’s total new cotton output in 2021 was 5.578 million tons, a year-on-year decrease of 6.3%, of which Xinjiang’s output was 5.017 million tons, a year-on-year decrease of 4.5%. It is also understood that Xinjiang’s ginning production capacity will continue to increase this year, and more than 130 new production lines have been added there since 2018. For seed cotton, the supply of raw materials has decreased, and corporate demand has increased, which has greatly increased the price of new cotton. The phenomenon of more farmers and less rice may happen again, and the rush to harvest new cotton has gradually become the market consensus.
A cotton farmer in Xinjiang said that this year due to adverse weather effects such as early wind disasters and low temperatures in Xinjiang, most cotton fields have resown, and the local cotton planting cost has further increased. This year, the cost of renting land in Xinjiang is 1,000-1,400 yuan/mu. Among them, the cost of renting land in Jinghe County is 1,100-1,150 yuan/mu, and the cost of renting land in Bole, Xinjiang is about 1,400 yuan/mu. The cost of renting land is on average compared with last year. The price has increased by 300-400 yuan/acre, and fertilizers have followed suit. The current price of urea is 120 yuan/bag, more than double that of last year. The increase in the cost of renting land has promoted the increase in the price of seed cotton. The person in charge of a company in Shandong said that in previous years, when the scales were opened for new cotton in Xinjiang, there was a rush to harvest, and the price was generally higher. However, this year due to the impact of bad weather in the early stage, the output of new cotton was lower than the same period last year. In addition, downstream consumption is better, and it is expected that This year, the open-scale price of machine-picked cotton in Xinjiang is over 7.5 yuan/kg, and the converted lint cost is about 17,000 yuan/ton, and hand-picked cotton is even higher. Some companies said that there are few new cotton resources this year, so they must seize them. If they don’t seize the resources, they will be gone. If companies cannot receive seed cotton, they will definitely suffer losses.
Currently, cotton in Xinjiang is generally growing well and is about to enter the linting period. With the recent increase in cotton and cotton yarn prices, the decline in Zheng Cotton warehouse receipts has accelerated. As of August 18, there were 10,945 registered warehouse receipts for Zheng Cotton, a decrease of 103 from the 16th, and a discount of 438,000 tons. Downstream companies are beginning to have a wait-and-see mentality towards high raw material prices. The person in charge of a textile company in Shandong said that due to the rapid rise in cotton prices in recent days, textile companies in Shandong and surrounding areas are increasingly feeling the pressure from raw materials. Coupled with the steady launch of nearly 10,000 tons of cotton reserves per day and all In order to complete transactions, they had to slow down the pace of purchasing and restocking, causing the number of spot transactions to continue to decline.
At the same time, with the arrival of the “Golden Nine and Silver Ten”, the operation of textile enterprises may become even more popular. The person in charge of many textile companies in Shandong, Henan, Anhui, etc. said that due to factors such as the transfer of foreign orders inland and the gradual improvement of domestic consumption, the business operations this year are better, and profits are higher than the same period last year. At the same time, with the peak season approaching, most companies expressed confidence in the market outlook.
In addition, from the supply side, the negative impact of the current reserve cotton rotation and quotas has been exhausted, and recently Zheng cotton has hit a new high of 18,265 yuan/ton and downstream consumption The market continues to improve, and the market’s optimism and confidence are increasing. Internationally, in August this year, the UADA year-on-year table released by the United States Department of Agriculture lowered the global cotton production and ending stocks for 2021/22, which has a positive impact on cotton prices. To sum up, it seems that it has become a market consensus that the price of new cotton will be higher at the opening of the scale this year. If there is another “harvest rush” in the later period of the opening of the scale, cotton prices may get higher and higher. However, unfavorable factors such as whether the Federal Reserve will raise interest rates in the future and the trend of the global epidemic are still the key to market prevention and control. </p
