Cotton Purchase And Storage Is Confusing. Later Focus On Government Subsidies.

< p > with the announcement of the office of the national development and Reform Commission on the relaxation of cotton purchase and storage standards to protect the interests of cotton growers in December 23, 2013, the price of Zheng cotton rose day by day, of which the 1405 contract price of zhengmian main force has risen by 965 yuan / ton as of yesterday.

In the same period, domestic cotton spot markets, especially the cotton market in the Yangtze River Valley, were booming, and cotton prices also stabilized and picked up.

It is noteworthy that the government kept open and closed storage at 20400 yuan / ton, which led to the early speculation that the government will implement direct subsidy policy in cotton city this year, and this factor will affect the price of cotton.

< /p >

< p > in the season of new cotton concentrating last year, the situation of cotton quality declined in Hubei, Hunan and Jiangxi provinces affected by the weather. In order to ensure the smooth sale of cotton farmers in the disaster area, the relevant departments of the a href= "//www.sjfzxm.com/news/list.aspx ClassID=101112107105" > National Development and Reform Commission < /a > were studied and submitted to the State Council for approval, and the government adjusted the purchase standard of the above three national cotton reserves.

< /p >

< p > with the government relaxing the storage and storage standards of Hubei, Hunan and Jiangxi provinces, the seed cotton prices in the Yangtze River valley cotton region began to rise, and the purchase amount of cotton storage and storage enterprises increased.

Huang Shanghai, a researcher at the Yangtze futures agricultural product, told the futures daily that after the loosening of the storage standards, most of the cotton purchasing and storage enterprises increased the purchasing power, and many cotton related enterprises' purchasing enthusiasm was also promoted. The purchase price of seed cotton in the Yangtze River Basin cotton area and other domestic producing areas has been continuously raised. At present, the seed cotton resources in some areas have been insufficient. The purchase price of seed cotton with good quality in the Yangtze River Valley has reached 4.2 - 4.3 yuan / jin (37% to 38%, 12% of water), and the inferior seed cotton price is about 3.1 yuan / Jin.

< /p >

< p > aiming at the rise of cotton prices, especially the sharp rise in the price of Zheng cotton yesterday, Yu Lijuan, senior analyst at Jinshi futures cotton, believes that under the situation of oversupply of cotton and domestic markets both at home and abroad, the trend of cotton price operation is oscillating. The trend of Zheng cotton price is in the opposite direction. The main reason is that the government relaxed the standard of purchasing and storage and attracted the admission of buying funds. The 1405 position of zhengmian main contract has increased from more than 60 thousand hands in December 23rd last year to the current more than 80 thousand hand.

< /p >

< p > at present, the key point of market speculation is that there is a great disparity between the amount of warehouse receipts and positions held by Zheng cotton.

It is understood that due to the continuous high price for several years, the number of high-grade cotton available in domestic cotton market is limited, and the quantity of cotton suitable for registration of zhengmian warehouse receipt is even more limited. It is understood that there are only 154 pieces (about 3200 tons) of Zhenggang warehouse receipt.

"However, from the analysis of the supply and demand side of cotton market, market speculation is more difficult to sustain. After all, the sale of national cotton and cotton can meet the demand of the market, and the continued cotton futures will eventually fall back to the market fundamentals as the kite broken.

In addition, the 1% tariff of 894 thousand tons this year, less than a href= "//www.sjfzxm.com/news/list.aspx ClassID=101112107107" > cotton import quota < /a > has been issued. Some quota of processing trade type has also been issued. It is expected that the possibility of increasing the tax quota will be smaller in the late stage of the domestic cotton inventory. It is expected that the mode of reducing the quota and continuous processing trade quota will continue.

Yu Lijuan said.

< /p >

< p > Zhang Wenmin, general manager of the Cotton Industry Department of Wanda futures, looks at the fact that the government has relaxed the cotton storage and storage standards in some provinces of the Yangtze River Basin, and that the price of the cotton production area has been kept at a much higher price than the market price. The impact on the market is coming to an end. This is not the main factor determining the future cotton price trend in the future.

If we want to accurately predict the future cotton price trend, we must set aside the fog of collecting and storing in floating cotton market, and pay attention to how to make, when and how to make direct subsidy policy.

< /p >

< p > Xinhua News Agency recently announced that China will cancel the controversial soybean and cotton purchasing and storage mechanism, instead of directly subsidize farmers, and cotton farmers' direct subsidy policy will be released in March.

After the announcement, domestic cotton prices did not decline rapidly, and the impact of this negative factor on cotton market was soon overshadowed by the government's continuous high price collection and storage.

< /p >

< p > "recently, a number of ministries and committees organized cotton experts to conduct market research in the main cotton producing areas such as Xinjiang. This year, the possibility of cotton purchase and storage is changed to direct subsidy, and the policy moisture of domestic cotton prices will eventually be squeezed out."

According to Zhang Wenmin analysis, the current sale price of 10 cotton yarn imported from Guangzhou and other places in Pakistan is only 16800 yuan / ton, and the domestic storage of cotton by 20400 yuan / ton will definitely not work in the future. Once the policy of purchase and storage is changed, the policy will be worked out, and the implementation details will be announced. At that time, the domestic cotton price will go through a big policy process. Finally, the price of domestic cotton and < a href= "//www.sjfzxm.com/news/list.aspx ClassID=101112107102" > imported cotton < /a will converge. This will not only be beneficial to the development of the cotton industry, but also help the cotton textile enterprises to get out of the predicament, and also conducive to the rational allocation of market resources.

It is estimated that the cotton subsidy policy will be clear in the cotton growing season this spring. Cotton companies and investors should have a strategic investment vision and pay close attention to the relevant information on direct subsidy policy that may cause qualitative changes in the cotton market pattern.

< /p >

< p > Yu Lijuan thinks that the formulation and implementation of cotton direct subsidy policy has become the hot spot of cotton market this year.

In short, the implementation of direct subsidy policy can stabilize cotton farmers' income while reducing the cost of raw materials for cotton spinning enterprises and reducing the pressure of import shocks caused by the long-term "upside down" of cotton prices at home and abroad.

At the same time, the implementation of cotton direct subsidy policy means that cotton market in China will start to market regulation from the direct regulation of price by government administrative means.

< /p >

< p > at present, there are three main expectations for the implementation of cotton direct subsidy in the market: first, the subsidy is 200 yuan per mu for planting area; two is subsidized by output, and 0.5 to 0.8 yuan per kilogram of Cotton Subsidy; three is the collection and storage of the Cotton Subsidy and the pilot subsidy goes hand in hand, so as to safeguard the interests of cotton growers.

Yu Lijuan believes that no matter what kind of cotton subsidy way the government implements, investors should pay attention to two changes in the cotton market in the late stage: first, the increase and decrease of cotton planting area in the new year; two, whether the domestic cotton market can be completely divorced from policy intervention and complete the marketization after the direct subsidy policy is promulgated and implemented as expected, and how to complete the return of the high price difference between domestic and foreign cotton markets.

From the analysis of the current development trend of cotton market, under the background of up to 10 million tons of national cotton stocks, domestic cotton prices weaken and the cost of imported cotton is closer, but this process of return will be relatively slow.

< /p >