National Direct Subsidy Policy Restraining Cotton Price Rise

This year, the government will implement direct subsidy policy in Xinjiang, the largest cotton producing area in China. This means that the national cotton purchase policy is about to complete its historical mission. The policy premium of domestic cotton prices no longer exists. Many a target= "_blank" href= "//www.sjfzxm.com/" > textile < /a > A target= "_blank" href= "P".

In addition, the huge stock of national reserves will lead to a long period of time for domestic cotton market to go stock. In the process, cotton prices will always be suppressed.

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< p > recently, domestic cotton prices fluctuated greatly, especially the price of Zheng cotton, which has dropped sharply for two consecutive trading days.

Among them, the main 1409 contract price last Friday's limit.

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< p > aiming at the setback of cotton price, the market is divided into different opinions and various speculation and rumors.

In fact, after the Xinhua news agency was authorized to issue this year's Central Document No. 1 in January 19th, the pattern of cotton market was bound to change significantly. The current surge in cotton prices is only a response to this.

Central document No.1 proposed that Xinjiang cotton target price subsidy pilot project should be launched this year (hereinafter referred to as direct subsidy).

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< p > up to now, the purchase and storage of cotton in 2013 has come to an end stage, and the supporting effect of policy favorable to cotton price has weakened.

At the same time, the market began to pay attention to the issue of how to implement the direct subsidy policy, and began to analyze the changes in the market price in the process of going out of stock.

In addition, the market is still actively exploring whether the price of cotton will overreact in the process of the resumption of market mechanism during the pition from "policy market" to "market market" in China.

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< p > "cotton price decline is inevitable, although the number of warehouse receipts in Zhengzhou cotton city is not large, but the period price is more often reflects the development trend of future prices."

Zhou Dalong, assistant general manager of Shandong Zibo business department, Lu Zheng futures, said he and his colleagues just completed the market investigation on the import of cotton market in Qingdao bonded area, cotton inventory in Shandong area, and production and sales of textile enterprises.

According to their understanding, this year, the government will implement direct subsidy policy in Xinjiang, the largest cotton producing area in China. This means that the national cotton purchase policy is about to complete its historical mission, and the domestic cotton price policy premium will no longer exist. Many textile and garment enterprises expect cotton prices to decline.

The huge inventory will lead to a long period of time for domestic cotton market to go stock. In the process, cotton prices will be suppressed all the time.

At the same time, the reaction force of the policy adjustment will be fully revealed, and the possibility of excessive cotton price decline will not be ruled out.

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< p > 2011, the State Reserve acquired 3 million 130 thousand tons of cotton, accounting for 47% of the total output of the country.

In 2012, the State Reserve acquired 6 million 500 thousand tons of cotton, accounting for 90% of the total output of the country.

As of February 27th this year, 2013 cotton production has accumulated more than 6 million tons of storage.

Zhou Dalong analysis, regardless of the annual number of imported cotton, according to the national cotton daily sale of twenty thousand tons to calculate (except holidays), the current state reserve stocks can still meet the domestic demand by the end of 2015, even if the domestic cotton harvest this year, the market will not be tight supply, not to mention the textile products sales are relatively low.

It is understood that since the end of February, domestic cotton yarn and yarn prices have generally declined, many textile enterprises have insufficient orders, and imported cotton and imported cotton yarn prices are low, and the same phenomenon of sluggish sales, the domestic cotton market demand is more weak.

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< p > March, after the introduction of the direct subsidy rules, the domestic cotton and cotton yarn prices are difficult to rise. However, the implementation of direct subsidy policy and the storage of cotton stocks will also be the pricing power of cotton market. The cotton price will be determined by the market in the future, and the cotton and cotton textile industry will usher in a new round of washing.

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