Purchase And Storage Price Becomes The Stage Support Of Zheng Cotton.

Up from July 8th cotton 1109 contract trading margin begins. Zheng cotton 1109 the contract has fallen more than 2000 points, and the 1109 contract is basically in line with the 1201 contract price. Zheng cotton main contract 1201 received a temporary support near 20800 yuan. The recent market still has great differences. Despite the sharp fall in market prices, Zheng cotton kept a high position. In July 6th, the 1201 contract added 122 thousand positions. In July 12th, there were still nearly 30 thousand hands in the 1201 contracts, and the positions reached the highest level in history.

There are three main reasons for choosing the 1201 cotton contract in Zhengzhou city. First, the macro policy is expected to be adjusted. It is believed that the loan will be released to SMEs in the second half of the year. Two, it is believed that the cotton temporary purchase and storage plan will initiate support for domestic cotton prices in the next year. The state needs to replenish its reserves to enhance its ability to regulate and control the market. The drop in cotton prices will be limited and the room for growth will be quite imaginative. Three, it is expected that cotton prices will rise significantly from the 30000 yuan to 20000 yuan.

The following is the key point of view of the next year's cotton price space from the perspective of consumption. Cotton price Down to 20000 yuan / ton, will continue to inhibit domestic cotton consumption next year.

First, the high cotton price transmission cycle is longer, and cotton consumption in 2011 is still affected by high cotton prices in 2010. In 2010, the acquisition cost of cotton in China was around 25000 yuan / ton (the average price of the new cotton was listed at about 6 yuan / kg), and the average cost of imported cotton was also around 25000 yuan / ton. When cotton prices continued to rise, textile enterprises could not receive orders with profit.

40% of China's textiles are exported, and half of the export orders come from developed countries and regions such as Europe, America and Japan. Clothing production cycle from raw material to terminal consumption, there is a conduction period of six months. The impact of the rise in cotton prices in September 2010 was mostly reflected in the consumption of clothing in March 2011. Cotton prices in the second half of 2010 are still above 25000 yuan / ton, and the inhibition of high cotton prices will continue to affect the end of 2011.

Secondly, the new mode of clothing retailers affects domestic cotton consumption. When global cotton prices were high in 2010, retailers adopted new strategies to deal with them. First, the clothing production area is close to the consumption area. Due to the fragmentation of orders. The scale advantage of Asia's manufacturing industry has weakened, and retailers have shifted their clothing production to the traditional Nordic region to meet the needs of consumers for less batch, multi style and fast consumption. Two is the retail network, through the network sales platform, with more preferential prices, clothing sales from department stores to direct sales to consumers, in order to reduce the cost of sales. The rise of Internet consumption has a higher demand for transport cycle, and also determines that clothing production is closer to consumption.

Although there are domestic temporary reserve plans to support cotton prices, clothing retailers will set order prices at lower cotton prices worldwide. At present, the long-term quotation of outer cotton is lower than the corresponding domestic contract price. If the domestic cotton price lacks superiority, it will urge textile enterprises to increase the import of foreign cotton or lead to the loss of textile orders.

Finally, the increase of chemical fiber production capacity and low price will lead to an increase in the substitution effect of chemical fiber and inhibit cotton consumption. Since the second half of 2011, the new capacity of PTA has been put into operation in China, and the situation that PTA is in short supply has been improved. The increase in cotton production also led to more space for production of viscose staple fibers using cotton lint as raw material. At present, the price of polyester staple fiber is 12600 yuan / ton, and the average price of viscose staple fiber is 18000 yuan / ton, which is 8600 yuan / ton lower than the current cotton price and 3100 yuan / ton respectively. The price difference makes the chemical fiber have great price advantage. In 2010, the substitution effect of chemical fiber was limited, mainly due to the limited supply of chemical fibers and the fact that textile and garment enterprises did not adjust the process in time. However, the supply of chemical fiber will be more relaxed in 2011. Unreasonable price differentials will also lead textile enterprises to adjust their technology.

On the whole, cotton prices of around 20000 yuan do not have absolute advantages. High cotton prices will stimulate the increase of cotton planting area in the next two years, and at the same time curb the excessive growth of cotton demand. If the new cotton weather is good for a long time, there will still be room for further decline in global cotton prices. Next year, domestic cotton prices will be more likely to oscillate around 20000 yuan / ton and about 3000 yuan under the support of purchasing and storage policy. Higher output and stable demand will lead cotton prices to gradually return to normal level in the next 1 to 3 years.