Analysis: Can Xinjiang's cotton rebound at the bottom?

In the cotton industry chain, the state has a series of support policies for upstream cotton farmers, such as planting subsidies, subsidies for agricultural machinery, import quotas for downstream cotton textile enterprises, export tax rebates, and national reserve cotton injections. It seems that only cotton processing companies have always played a role. Do not love or dislike the role.

For the direction of the 2014/15 cotton market, cotton textile companies, cotton companies and some cotton enterprises are currently pessimistic. Some institutions even suggested that Xinjiang's cotton in 2015 will hardly see a high of 15,000 yuan per ton. The low point may be Under the break 12,000 yuan / ton. The author believes that after March 2015, the domestic cotton price in Xinjiang is likely to bottom out. At that time, the domestic and foreign markets will “hand in hand” to increase and promote the overall growth of cotton yarn and grey cloth. The reason why this is so is based on the following analysis:

I. Although the disadvantages of Xinjiang cotton with respect to Australian cotton and American cotton in terms of quality have increased slightly, the advantages in terms of price and supply have also improved. Xinjiang cotton will still be the cotton used by cotton textile enterprises in 2014/15. ***". In January and February of 2015, the number of US cotton arrived in Hong Kong was significantly lower than expected, and Qingdao, Zhangjiagang and other ports even had “one ticket difficult to get”. However, the price of US cotton from 16,000 to 16,400 yuan/ton was also lower than that of the mainland bank Xinjiang cotton 2129 The quotations of grades are higher than 1,500 yuan/ton, and the SM grades of Australian cotton are more than 3,000 yuan/ton of Xinjiang cotton. With such a high spread, it is impossible for textile spinning companies to make up for the problem. As of January 8, 2015, US cotton contracted exports have been completed at 87%. The contracted volume of Chinese buyers is approximately 415,000 tons, accounting for 22.57% of the US cotton export volume. The country issued 894,000 tons even in January-February 1 % Cotton import quotas within the tariffs, in order to import large quantities of US cotton also get high prices from the hands of cotton traders. What about Indian cotton? Due to a large number of state-owned cotton plugs and a total quota of 894,000 tons, even if the price of cotton in India is lower, the purchase of domestic textile companies will weigh a lot more. Moreover, there is a “minimum seed cotton acquisition” for Indian cotton. Toddotto is unlikely to make global buyers cheap. While a large number of 2014/15 Xinjiang cotton has been shipped to the mainland warehouse, the timeliness of supply is guaranteed. It is expected that the period of March-August will be the period when Xinjiang's cotton is “robbed” from imported cotton.

Second, the 2013/14, 2014/15 Chinese market continued to decline in cotton consumption capacity can not be questioned, but some organizations or investment departments proposed below 6 million or even 5.5 million tons of the author is not credulous, China's cotton textile industry like the stock market There will never be a shortage of funds, but only opportunities. It is understood that due to the sharp decline in cotton prices from November 2014 to January 2015 of 2,500-3,000 yuan per ton, many textile enterprises have achieved a spinning profit of over 2,000 yuan per ton, and the net profit per gray fabric is also 0.30- 0.50 yuan. Although the transaction prices of cotton yarns and grey fabrics have subsequently declined passively, and profits have been fully compressed, the benefits are still significantly better than the first two quarters of 2014. As long as there are orders for cotton yarns and grey cloths, profits are made. Therefore, the author's opinion is that the period from November 2014 to 2015 was In January of this year, the start-up situation of small and medium-sized textile enterprises not only did not deteriorate further but showed a rebound. China's cotton textile factories are clustered in relatively developed regions such as Guangdong, Jiangsu, Zhejiang, Shandong, Henan, Hebei and Hubei. If the large number of small and medium-sized cotton mills closes down, the number of unemployed and laid-off industrial workers will also be significant, at least until late January. There is not much coverage of this kind of report in various places. In addition, due to a sharp drop in crude oil, polyester staple fiber dropped to about 6,900 yuan/ton, which is equivalent to half of Xinjiang's secondary cotton price, and the proportion of textile companies “abandoning cotton polyester” has increased significantly. As we all know, the general transformation of the “refining cotton polyester” plant of a spinning mill takes a week to two weeks, and a certain amount of capital is required to be invested. In the case where the cotton yarn and polyester/cotton yarn market are unclear, only the pressure of raw materials and product inventory funds will be reduced. What is the proportion of cotton discarded polyester? Moreover, according to statistics released by the General Administration of Customs, in December 2014, China exported 9.956 billion U.S. dollars worth of textile yarns, fabrics, and products, an increase of 0.17% year-on-year, an increase of 2.17% from the previous month, and exports of clothing and clothing accessories of 15.92 billion U.S. dollars. A decrease of 2.09% means that there has been no significant increase in the export of polyester-cotton yarns, polyester-cotton fabrics, and other blended, chemical fiber products.

Third, global and China's sharp decline in cotton acreage in 2015 will become the subject of speculation by all parties. Concerns over the increase in demand for cotton in the supply of high-grade cotton and economic recovery in 2015/16 will intensify. Once weather conditions are present, cotton is likely to become a major commodity. The "emergency vanguard" has stopped falling and rebounded. According to statistics from relevant authorities, Australia's cotton planting area was halved in 2015, and its output was reduced to more than 400,000 tons, while US soybeans, corn and other benefits were significantly higher than those of cotton. Therefore, the cotton acreage is also expected to decline by 20-30%. The problem of selling cotton in India has been very prominent. In 2015, the farmers' planting intentions are not optimistic. According to the National Cotton Market Monitoring System nationwide survey of cotton plantation intentions, the country's intention to plant cotton was 54.089 million mu in 2015, a decrease of 9.151 million mu, a decrease of 14.5% year-on-year. Recently, relevant personnel of the Xinjiang Bingtuan stated that in the 2015/16 season, cotton output of the XPCC will be adjusted from 1.76 million tons in 2014 to about 1.2 million tons, a decrease of 31.8%, while in Aksu, Kashgar and other places in southern Xinjiang, red dates, fruits and corn, With the gradual expansion of wheat and other crop planting bases, cotton fields that are not suitable for cotton production will be released, and the area of ​​cotton planting will fall even more.

In summary, the author believes that in 2014/15, the processing capacity will be three or four times that of cotton, the state will fully withdraw from the temporary storage policy, and cotton textiles, clothing, and even the entire industry will fall into the “winter” market environment, and the cotton industry will return to “self-reliance and self-reliance”. "The ideological transition of supply and demand to lead the market needs a process. However, the challenges encountered by the cotton enterprises in Xinjiang and the frustrations encountered are only a phased process. The so-called “fall is not in place, and it cannot rise”, there is no place to die, and the cotton industry has no “turn of feng shui”. opportunity.