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Recent Cotton Situation And The Impact Of China'S Cotton Purchase And Storage Policy

2013/6/4 15:14:00 139

by "China a href=" //www.sjfzxm.com/ "target=" _blank "> textile < /a > Industrial Federation" 2013 China International Cotton Textile Conference and China International Textile raw material Market Conference ", held in Nanjing, Jiangsu Province on June 3-4.

Mr. Chen Tao, chairman of Louis Da fir China, delivered a speech on cotton trends and operations.

Chen Tao: now, we are talking about cotton today. More importantly, we talk about China's current policy of collecting and storing. The first stage, we all said a lot of views and opinions. The actual entanglement is not everyone here, nor is it just the government. In fact, the international market is also very concerned about this, as we all know.

Just now I sat there and I reflected on it. What did they do in the international market? I have two examples to make a reference.

first, we want to learn from the United States direct subsidy, in fact, their direct subsidy is very simple and complex.

What is simple? He subsidizes a price difference. If the international market or the current spot market is lower than the lowest subsidy price set by the government, then the difference will come into being.

However, we should pay attention to several complex problems arising from this. First, this is a subsidy determined by law and can not be changed artificially easily.

Second, his price is often far below the spot market price, not higher than that.

Third, the price is determined weekly, not one year from beginning to end.

Fourth, after the price is fixed, cotton growers, cotton merchants and enterprises will have the right to participate. It is an intangible asset that can be traded.

For example, the minimum price of normal price subsidy is 79 cents. When the market is 60 cents, and 70 cents, the difference is nine cents or fifteen cents, so we can all trade in the market judgement. Of course, the most primitive one who gets the subsidy must be the farmer, because he can get a subsidy from the government above the market.

But we know that the subsidy price he decides is only 79 cents. Our current price is much higher than the price within one or two years and two or three years, so there is no subsidy.

So until this year, there is no price subsidy for all agriculture in the United States. He can have interest subsidies, subsidies for water and electricity, subsidies from all sides, but that is a small part. The biggest price subsidy does not exist today.

his subsidy is also settled according to the per pound per pound, not according to the land. What if the cotton production is on the land? He can get the insurance company to get the insurance premium. At this time, the government has no responsibility, because he has got the money he should get and got it in the insurance company.

Only if you grow the cotton, there will be a subsidy per pound, whatever the quality standard.

He is marked according to every pound, every packet, and each package, and can only be registered once. There can not be two duplicate packages. This is a public information that can be found on the computer. You took a cotton subsidy today in the government. It is impossible to move to the third house later, and then get the subsidy. Impossible, the subsidy has been impossible to repeat.

This is public information. Anyone can check it out.

P, another example, India and India began collecting and storing this year. The reason is very simple. When I was in the harvest season, when a large number of cotton was listed, the market did not have enough funds to take over the cotton. The farmers were under great pressure and the market price was very low. He put out a policy this year and started collecting and storing, but his premise was very clear. How much I bought and sold in this year must be thrown back to the market to meet the market supply, not to squeeze the market. After I have collected cotton by myself, you can only buy from me at last, you can only buy from me, I want to pay less, how much money do you want to give me, or how much money do you give me?

That's not the case. He must throw the cotton back at the market price, or no one will buy it, because his premise is that he can choose to go to the international market at will. When you have a competitive price, I will be interested in buying your cotton when you sell it, otherwise you will not sell it.

indeed, over the past two or three years, our international and domestic participants in textile related enterprises have been highly concerned about China's cotton purchase and storage policy. In fact, many people do not believe that the government's strength and discourse power are quite strong under the circumstances of breaking glasses. It has not only grasped the lifeline of China's cotton market, but also greatly controlled the price of the international market.

This is unprecedented, and we can never have seen it in history.

Did we collect and store in the past?

But in our history, the highest number of storage and storage is around 4 million tons, and our price is not so high. But when it comes to this price, it is also a tangled matter.

All our agricultural products, except cotton, have gone up three times in price in the past two or three years.

After 10 years, soybeans, wheat and corn have doubled three times. Cotton prices are the cheapest and least expensive this year, no matter domestic or international markets.

Our domestic grain prices have risen by about 10% a year, and cotton has not gone up so much.

Why did cotton appear again now very puzzled and entangled, there is no way to find a way out of the predicament.

In fact, there are two problem nodes. First, the cost of cotton planting in China is too high, far higher than the average level in the international market.

The average in the United States is about 80 Fen, about 40 Fen in India. If we are 19800, that is 118 cents, how much higher, you can figure out.

So this is a very puzzling problem. It is a big problem that farmers will not grow cotton in the future.

We do not know how much money we need to make up for the following subsidies, which is also a big problem.

Besides, there is no better way to do this except for direct subsidy. But we need to sit down and study very well. It's not so simple.

second questions, we are not the same as grain. How much grain do you go up? We digest it domestically. The rice sold in Japan is sold for one hundred yuan per Jin.

But we cotton is two heads away, we must compete with other countries in the world, so it is not like all kinds of food varieties can be digested at home, so we can not be as much food as we want, and there is a problem that the international market does not accept.

we can see that in the past a long time, the world's cotton consumption is constantly rising, but so far this year, especially China's cotton consumption has been occupying the world market share at a high speed.

But after 10 years, especially in 11 or 12 years, since the policy of purchasing and storage is higher than the average price of the international market, our consumption has dropped by more than 20% after the global cotton consumption has dropped 8%. This shows that our purchasing and storage policy is problematic.

At the same time, we see chemical fiber, in 95 years only 1 million 100 thousand tons of output, to 12 years to 12 million tons, 13 years believe that it will reach 14 million tons, so now everyone here, in your vicinity a lot of PX, PTV and other various chemical plants, this is one of the reasons.

Less than P, 10 years ago, the profiteering of the chemical fiber industry led to the emergence of many new factories.

In the short period of time, we became the largest producer of chemical fibres in the world.

At the same time, our cotton ratio dropped from 55% to 42%, and this trend is constantly declining.

The output of chemical fiber in the world is basically stable. Only China is increasing substantially, and the rate of increase is more rapid in the past two or three years.

There are some voice in this area, and there are some data to support it.

At the same time, we see that the proportion of cotton consumption is decreasing rapidly.

However, there is also a phenomenon that we see in 10 years, when we cotton to more than two yuan, not only a large number of chemical fiber substitutes appeared in China.

And globally, from a consumer perspective, they have begun to accept more chemical fibers and other non cotton products when there is no way to choose.

Now the world's consumption of cotton is declining, but other chemical fiber products are growing rapidly, including many denim, traditionally denim is one hundred percent cotton, but now is not the case. Even a lot of time, denim has basically no cotton, so long as the price is right, there is still a market for it.

At the same time, we have a regrettable phenomenon. When the share of cotton in China continues to decline, the market around us is increasing rapidly, especially in India, which is mainly in the subcontinent, including India, Bangladesh and Pakistan. The consumption of three countries has surpassed that of China.

In the past, from 2000 to 10, the world's cotton consumption increased by 5 million tons. Most of the growth came from China.

But recently, from 10 to early 13, our cotton consumption has dropped by about 3000000 tons in just over two years, and most of them are expected by the surrounding India, and even the United States has begun to increase cotton consumption, including Turkey's main cotton producing countries.

This is the situation we are seeing now. China's consumption is falling rapidly. Other countries are constantly pulling away our share.

there is another phenomenon. Our massive reduction in cotton consumption does not mean that there is so much less demand for cotton, mainly because our cotton imports are increasing substantially.

On one occasion, when the NDRC communicated with us, he said that he did not see so many cotton and cotton yarn imported into China. Even though our cotton price was so high, the price difference was so great, but he needed time.

What does time mean? In the past traditional production processes, he also had to satisfy his downstream needs. His cloth and < a href= "//www.sjfzxm.com/" target= "_blank" > clothing < /a > demand could not suddenly stop all downstream and sell the yarn to China.

But the trend is very clear. We have seen a lot of cotton yarn continuously increasing in quantity and flowing into China.

The result is that cotton consumption in the world, including the United States, is increasing, and only China is decreasing.

China's decline is 5%, and our proportion is not large, but the absolute value is not small.

It seems that although the policy of purchasing and storing is not too high in agricultural products, it is too high in our cotton textile industry.

Historically speaking, cotton has only gone through two times when it exceeds one hundred cents.

We set the purchase price at the second time, which led to a distortion of the whole cotton industry. This may be a bit of an exaggeration.

But it is clear that all of them are reflected. Over the past two years, the victims and the beneficiaries are very clear.

To put it simply, I still maintain the four sentence I said before. In the medium to long term, our purchasing and storage policy is conducive to the textile industry in the international market and increases their share.

Short term look at all cotton farmers who are good for the international market, and they get the high price they should not get.

Looking back at the domestic market, we can see that farmers benefit little from the short-term view, because they may benefit more from planting other products, so we can see that the area has not increased.

At such a high price, they still choose to grow other agricultural products instead of cotton.

The most tragic and sad thing is the textile industry. Especially when the manufacturing industry is not very prosperous, we have been artificially suppressed by weaving such a heavy weight and distorted market.

So, there are a few things that can really make your home come out and earn very little on cotton spinning, but most of them are very difficult.

briefly on our market.

Just now, the premise of the market is our national policy. In fact, there are many aspects of the policy.

At present, the world's cotton is generally oversupply, but the supply exceeds demand. Nearly 60% of the inventory is in China, so when we look at the market, one is the global view, and the other is the global supply and demand relationship excluding China's supply and demand relationship.

The conclusion is that cotton is very abundant all over the world, because there are so many cotton in China.

In addition to China, cotton is also very tight because global inventories are basically at a very low price in the history.

So far, the US Department of agriculture figures show that the United States has already completed the number of sales that should be sold in 2013, 2 million 880 thousand packets, and its export figures will still have a process by the end of July, but we believe that there will be new sales by now till the end of July.

That is to say, the carry over inventory in the US will be much higher than that released by the US Department of agriculture in early May.

China's imports, in fact, have been raised by the US Department of agriculture, which is expected to be less than 3 million tons and has now been pferred to 3 million 970 thousand tons.

But we are still importing China for two reasons, one is a very high price difference, one is to break through customs, and 40% of the total tariff import volume is not expected at all.

Therefore, although this 40% import volume should be said to be millions of tons, this has not happened in history.

Under such circumstances, our import volume is larger than originally expected, although we have more cotton than anyone else, but those cotton have nothing to do with you.

I talked about the recent trend. In March, we saw that cotton had created 94 cents, because we all predicted that the world's cotton would be rich, but the international tension, the United States cotton was also tense, they were warehouse units at that time, there was basically no warehouse receipts, so it has been rising, rising in April, and by May, there were 500 thousand packages of warehouse receipts, the market gradually callback, now has broken 80 cents, is still sinking, because warehouse receipts have been increasing, but no one has taken the cotton, there is no market.

This cotton is the only cotton that the United States can register for the quality of its warehouses. Next, if the cotton has never been taken, the market will fall.

If someone takes it, the market will skyrocket, because there is no such quality of cotton when it wants to register the warehouse receipt. The capacity of warehouse receipt basically does not exist.

The following market is bound to be a volatile market.

But one thing, it will not fall below 75 cents, or below 75 cents. China can import large quantities of 40% tariffs, which is impossible for the international market to bear. Cotton has come to China, and we have to import large quantities of China. This is no way to bear it. This is a bottom line, and the possibility of breaking the bottom line is very small.

from this figure, we can see that the inventory of the US Department of agriculture has been declining. This is a very low figure in history. If we go down again, we can hardly imagine where the market will go.

In the 12 year so far, until the end of the year July, we still have to see that the volume of exports of the United States will be greater than that of the US government.

India cotton is now almost exported. He is still selling his own cotton reserves, so he has not procured to the Chinese market.

What kind of impact will China's reserve policy have on the next market? It's a quota of one to three, a quota of one to three. Now many people have not got it yet, but we know that this quota will be invalid before the end of the year.

Now there's a difference of three thousand yuan. If you don't need it, you are wasting a lot of resources. That's impossible.

So when will you use your quota to fix your import cotton at the later stage? This is the problem you must consider now. There is little time left.

The changes in US warehouse receipts have a great impact on the market. The us a href= "//www.sjfzxm.com/news/index_s.asp" > market < /a > accounted for a large proportion of technical components. The amount of funds invested and the amount of warehouse receipts is far from the scope of the fundamentals and the balance of supply and demand.