Zheng Cotton Futures Do Not Panic.

Since the beginning of the new year, Zheng cotton futures have not been shocked. The main 1505 contract is hovering around the 13000 yuan / ton line, waiting for directions. Although the US and China's cotton planting intentions both declined this year, the expected increase in production is a strong support for cotton prices. However, in the face of the weak cotton demand in the lower reaches of the country, the uplink of cotton prices still lacks enough courage.

In the past 5 years, the continuous decline of international cotton prices has made the cotton growers of the world fall to freezing point. According to Bloomberg survey, the willingness of US cotton growers to plant cotton is significantly lower this year. It is estimated that the US cotton planting area will be reduced to 9 million 730 thousand acres. According to the China Cotton Association in January this year, the 12 provinces of the mainland and Xinjiang According to the survey results of 2760 cotton farmers in 310 counties (cities and regiments), the cotton growers who will reduce cotton planting area in this year account for 59.65%. Among them, cotton farmers in the the Yellow River River Basin and the Yangtze River Valley are expected to reduce their planting intentions by 42.21% and 41.87% respectively in 2015 because of low cotton prices, low yield and increased labor costs. The planting intention in Xinjiang cotton region will also be reduced by 11.5%, and the average planting intention in the whole country will be reduced by about 25.4%. It is estimated that the cotton planting area in 2015 will be reduced by 11 million 725 thousand and 600 mu from 59 million 20 thousand mu in 2014 to 47 million 294 thousand and 400 mu, with a drop of 19.87%.

Apart from the sharp decline in cotton planting area and output in China and the United States this year, the cotton planting area in India will also decrease. According to the February production and demand forecast released by the International Cotton Advisory Committee (ICAC), it is estimated that the global cotton planting area in February will be reduced by about 6%, to 31 million 600 thousand hectares. If we calculate the global average yield per kilogram of 777 kg / HA in the past 5 years, the world's cotton output will be 24 million 600 thousand tons, down 6% from the same period last year, the lowest level since 2009/2010.

international cotton The Advisory Committee expects global cotton consumption in 2015/2016 to be 24 million 700 thousand tonnes, up 2% over the same period last year. This will be the first time that cotton consumption has exceeded production in the past 5 years. Although the gap between supply and demand is only about 100 thousand tons, it is still a drop in the bucket compared with China's huge cotton inventories, but it is expected to end this year's domestic cotton market's continuously rising inventory consumption ratio, and the situation of oversupply is expected to improve. At home Cotton market It is expected that the new cotton sales will be guaranteed before the sale of national cotton reserves and the liberalization of imported cotton will be carried out. Therefore, under the background of global cotton production reduction, domestic cotton market supply pressure will be reduced.

In the medium to long term, the pattern of oversupply of cotton market will gradually shift, which will help cotton prices rise steadily. But before the Spring Festival, the cotton price will continue to be consolidated by the downstream demand side. According to the author's understanding, because of the long holiday approaching, domestic textile enterprises are stepping into the light period before the Spring Festival, and the production rate continues to increase. The overall average operating rate has dropped to below 50%. In the context of the lack of terminal demand, cotton prices are likely to fall, and sales will continue to shrink. Most manufacturers will choose to close their businesses ten days before the Spring Festival. Therefore, the demand for cotton market remains weak before the recovery.

On the whole, holiday factors will continue to interfere with the cotton market in the short term, and the demand side is difficult to improve significantly. However, the supply and demand situation of the annual overall good trend has laid the foundation for the cotton market. It is estimated that the cotton price center of the middle term is expected to move upward. After the Spring Festival, the centralized replenishment of cotton enterprises will promote the rebound of cotton prices to a certain extent.