Cotton Prices Will Gradually Move Upward In 2016/2017.

In 2015/2016, the domestic cotton market experienced a V trend, and the market sentiment changed from extreme pessimism to optimism.

We believe that from a cyclical point of view, the cotton prices in March 2016 and April were successfully built, and the new cotton cycle began to start.

Cotton prices will gradually move upward in 2016/2017, but in the face of market sentiment and expected change, the probability of unilateral trend in the cotton market will decrease, and the oscillation will be the main theme.

According to our research, the market expectations of 2016/2017 have changed significantly over the year 2015/2016, and the market pessimism has dissipated. The impulse of gilding enterprises to reduce goods in the early stage has slowed down the pressure of early cotton price decline, thus weakening the driving force of cotton price in the later stage.

Since 2000, from

The formation, development and decline of each cycle have undergone three complete cycles of rise and fall.

The first cycle is from November 2001 to November 2004.

The Internet bubble burst in 2001, and the global economic downturn superimposed on the US 9. 11 incident, accelerating the bottoming process of cotton prices.

In 2001, China joined the WTO. In 2003, cotton production and economic overheating pushed up cotton prices, resulting in high yield and falling prices of cotton in 2004.

The second cycle is from November 2004 to November 2008.

China's textiles in 2005

Quota restrictions have been lifted in countries and regions such as Europe and the United States, but trade disputes continue.

In 2005, cotton production was reduced, and the international economic crisis broke out in 2008 to accelerate the construction of cotton prices.

The third cycle is from November 2008 to March 2016.

This cycle is relatively special, and it can be considered as a historical market that can be met but not available. First, in 2009 and 2010, the production was reduced for two consecutive years. Two, the State Treasury basically saw the bottom. Three, Zheng merchants amended the registration rules for warehouse receipts in 2010, and four promoted cotton prices by many factors.

In 2011 - 2013, China has not restricted the temporary purchase and storage for three consecutive years, increasing the market demand, slowing down the pace of the global cotton price fall and prolonging the cycle time.

China's policy of withdrawing from temporary purchase and storage in 2014

Reform, cotton prices return to the market.

We believe that at the beginning of the new cycle, the bottom of cotton price has been established in March 2016 and April.

For the latter trend, if the cotton price goes up, we need macroeconomic factors, supply and demand, and other factors.

In macroeconomic terms, the current Chinese economy is in a structural adjustment period, and the relative excess capacity needs to be digested, and the new economic growth point is not yet mature.

In terms of supply and demand, the stock of state reserve cotton is still huge. The Chinese government has a strong ability to regulate and control. The cotton price in 2016/2017 has risen sharply and lacks a basis.

Cotton supply side: cotton prices in 2015/2016 fell first and then rose, and many gilding factories that had thrown ahead of time lost money or made little money, and the possibility of panic selling in 2016/2017 decreased.

Some ginning plants indicated that there was a plan to reserve a small quantity of high-quality cotton for sale during the storage period, thereby slowing down the downward pressure on cotton prices in the first half of the year.

Cotton demand side: in the year of 2015/2016, there was a strange phenomenon that cotton enterprises within the territory could be used without cotton.

In order to ensure the smooth operation of the production, the amount of cotton used by the textile enterprises in the new year to lock in the new year will increase in 2016/2017, thus slowing down the possible rise of cotton prices in the later stage.