The Trend Of Supply And Demand Of Domestic Cotton Market In 2011 Has Shown A Balance.

Recently, China reserves cotton management corporation.

The main reason for the sharp rise in cotton prices was the "2010 decline in global cotton initial stocks, the policy adjustment of major cotton suppliers, and the global loose monetary policy".

Feng Mengxiao said that domestic cotton prices rose from 5% to 3% in 2005 to 2010, -5%, -5%, 40% and 86% respectively.

The annual growth of cotton in 2009 and 2010 exceeded the regular range, mainly due to the decline in global cotton initial stocks in 2010, to 8 million 690 thousand tons, the lowest level since 1997, and China's initial cotton stocks were about 2 million 320 thousand tons, a low point since the 1995 year.

In addition, the state reserve cotton inventory level has been significantly reduced, and the ability of the state's macro regulation and control has been significantly weakened.

The cotton market has experienced the magnificent market in 2010, and the amplitude of spot price fluctuation in the first quarter of 2011 has been obviously enlarged.

Feng Mengxiao stressed that at present, we need to pay attention to three aspects of cotton market trends: first, the current high cotton prices have led to the extensive use of cotton substitutes, leading to a decline in domestic cotton textiles, which has inhibited the consumption of national cotton, and the price difference between inside and outside cotton has risen to a high level, which limits the consumption of cotton.

Two is driven by the recent downstream replenishment demand, yarn sales slightly improved, but finished product inventory pressure still exists, raw material procurement cautious.

Cotton enterprises in the early stage are not confident of cotton storage, and some enterprises continue to reduce spot quotes.

Three, the profit margins of textile enterprises are smaller than before.

As of April 19th, the difference between the pure cotton combed 32 yarn and the domestic grade 328 cotton was narrowed by 1085 yuan / ton.

"In view of the large proportion of industrial and commercial inventories this year and the constraint of cotton consumption by various factors, the supply and demand of China's cotton market is likely to be balanced from tight to tight."

Feng Mengxiao believes that overall, the weak market has not changed significantly.

At present, the yarn sales rate of textile enterprises is decreasing, the lowest level since September 2008, the stock ring ratio has increased, the highest level since March 2009, the sales rate of the cloth has been reduced, the inventory ring ratio has increased, the highest level since March 2010.

"In addition, it is worth noting that the pressure of capital turnover in small and medium-sized textile enterprises is increasing. From a related survey, 80% of textile enterprises reflect that funds are slightly nervous or extremely nervous.

However, the domestic high grade cotton supply situation is worth paying attention to, the market demand for higher cotton will only increase, and enterprises can appropriately increase the stock of higher cotton.

"The cotton market since 2010 can be regarded as the end of the crisis market.

The combination of multiple factors has created the current cotton market, and the global cotton market is ushering in a new pattern.

Feng Mengxiao warned that the global ultra loose monetary policy came to an end, the policy direction has tightened, commodity prices are facing re valuation, and the market will change from general rise to structural fluctuation.

Cotton as a hot market investment, the next stage of price increases need to be cautious observation.