Who Is Behind The Huge Decline Of Cotton Price

Oil prices fell sharply in August, and cotton prices rose again. Overnight, a large area of the domestic futures market went green, and the price of cf2101, the main contract of cotton futures, fell to the low level of 12215 yuan / ton, returning to the price level of early July in the past two months. "One night back before the liberation" of the huge drop in the industry is difficult to accept, can not help but investigate the cause of its deep fall.

First of all, the huge decline in cotton futures prices is mainly caused by the superposition of crude oil and US stocks, which can be attributed to external drag factors. According to relevant analysis, the crude oil collapse is mainly due to the following reasons: first, crude oil consumption demand did not arrive as scheduled, and the fiscal stimulus bill could not be implemented, so Saudi Aramco lowered the oil price to Asian countries; second, the supply of OPEC countries is expected to recover in September, and the impact of Hurricane weather in the United States on crude oil production has passed, and the current number of drilling wells has rebounded; Third, the US stock market plummeted, and market sentiment was not conducive to risk assets.

In addition, the Sino US relations are constantly upgrading, and the news that the United States banned the import of cotton products from China's New Territories also hit the cotton market of Zheng. Some domestic and foreign trade enterprises reported that due to some unreasonable requirements of the United States, export orders for some raw materials of Xinjiang cotton had been affected, and the postponed and cancelled orders mainly came from the U.S. market.

A domestic foreign trade enterprise introduced that although the United States began to gradually increase the purchase of foreign cotton after showing signs of suppressing Xinjiang cotton in July, due to the limited quota, Xinjiang cotton is the main raw material of domestic textile enterprises, and some foreign trade enterprises have to temporarily give up some export orders with requirements for raw materials. On September 8, the General Administration of Customs released China's textile and clothing export data in August, of which the year-on-year change of clothing export in August was the first time since this year to turn from negative to positive. However, with the growing Sino US relations, it may be even more difficult for the newly rising foreign trade enterprises to maintain the growth of export orders.

September of the new year is a very unusual month. When new cotton is listed on the market, Zheng cotton falls sharply. The traditional "golden nine silver ten" peak season in the downstream of domestic textile industry fails to meet the expectation, and the price continues to fall in a state of Yin. The domestic textile and clothing market cycle will continue for a period of time. Multiple negative factors are shrouded in it, which puts a heavy pressure on the seed cotton price which has not yet been weighed generally.

At the end of August, the results of the survey on the opening price of seed cotton in the new year showed that the expected opening price of Xinjiang hand picked cotton was 5.2-5.8 yuan / kg, and that of machine picked cotton was 4.5-5.0 yuan / kg. If the market continues to decline, it is difficult to say whether the expected price can keep the income of cotton farmers, and whether the planting intention of cotton farmers will change in the next year deserves close attention.