Cotton Market Has Not Yet Responded Negatively To China'S Cotton Subsidy Policy.

< p > according to the news of New York on February 25th, analysts pointed out on Wednesday that the market did not react quickly to China's policy of adjusting a href= "//www.sjfzxm.com/news/index_q.asp" > Cotton Subsidy < /a >.

< /p >

< p > analysts say cotton prices have fluctuated within a narrow range in the past year, while the recent cotton futures prices have climbed to the upper end of the trading range.

< /p >

< p style= "text-align: center" > < img border= "0" align= "center" alt= "" src= "" /uploadimages/201402/27/20140227092848_sj.JPG "/" < > > "

In the past few years, US cotton production has been decreasing, which has led to a decline in inventory, which makes the market vulnerable to temporary supply difficulties. P

< /p >

P cotton plant in the southeastern United States has seen a shortage of supply, because the local cotton mill can only consume certain quality cotton, which is also the reason why New York's cotton futures price is rising.

< /p >

< p > the market is concerned about the cotton planting area in the United States this spring.

< /p >

< p > early prediction data show that China's cotton acreage will shrink by about 11% this year, which is equivalent to 3 million 500 thousand less cotton supply than in 2013-14, equivalent to 3% of the total cotton output in the world.

< /p >

< p > February 20th, the United States Department of agriculture in the annual Outlook Forum predicted that the 2014-15 cotton planting area increased by 1 million acres in the United States, or increased by 10% over the previous year, while the output estimate was increased by 23%. The yield per unit area was not good enough, and the cotton field abandoned rate will also remain high. If the weather conditions are normal, the output target of cotton will be achieved.

< /p >

< p > but the problem is that China holds large quantities of cotton stocks.

In the short term, the United States tends to have a tight supply of cotton, but new cotton output or increase.

< /p >

< p > the US Department of agriculture in February's supply and demand report reduced the cotton harvest in China by 1 million packages, which led to a 1 million reduction in the end of the year inventory estimate.

< /p >

< p > but China's current cotton inventory is still equivalent to 160% of domestic consumption.

< /p >

< p > but one thing or for sure is that China's cotton purchase and storage policy, which has lasted for three years, will end.

< /p >

In January 19th, the Chinese government announced that it would end the acquisition plan for cotton and soybean reserves and directly subsidize farmers after the price dropped to a specific level. P

< /p >

< p > the purpose of China's move is to encourage farmers to plant more a href= "//www.sjfzxm.com/news/index_c.asp" > cotton > /a > crops while making domestic prices conform to international prices.

< /p >

< p > at present, the new policy is being piloted in some areas, but whether it has the expected effect is still unknown.

< /p >

< p > before China announced the adjustment of the cotton purchase and storage policy, China's cotton imports from the United States had been significantly lower than the same period last year.

< /p >

Since the market year of < p > 2013-14, China has imported 1 million 722 thousand bales of cotton in the United States, down from 3 million 976 thousand in the same period last year.

< /p >

< p > the US Department of agriculture expects to import 11 million bales of cotton this year, down from 20 million 330 thousand last year.

< /p >

< p > so it is not difficult to explain why the market did not immediately react negatively when China announced that it would adjust the cotton purchase and storage plan in January 19th.

< /p >

< p > up to now, < a href= "//www.sjfzxm.com/news/index_s.asp" > market < /a > still ignore the news, but one day, China will sell huge quantities of cotton stock.

< /p >