China'S Policy Of Purchasing And Storage Is Difficult To Support Global Cotton Prices

In the past year, China

The policy has supported the domestic and foreign cotton prices.

However, with the new cotton year's global high yield and the textile industry's sluggish demand, a large number of domestic cotton have chosen domestic storage, resulting in an increase in the number of storage and storage of cotton reserves, and the shortage of storage capacity is more prominent.

In this regard, the International Cotton Advisory Committee warned that China's cotton purchase and storage policy in 2012/2013 could not continue to provide support for global cotton prices.

From the beginning of the new cotton market in September, the international cotton prices remained relatively stable in the first two months, while the Cotlook A index fluctuated at 84 cents, but the trend in September was downward.

In the same period, China's domestic cotton prices remained stable, but the overall trend was upward.

Contrary to the price trend of the two, it may indicate the trend of price in the later stage.

In the new cotton year, China's domestic cotton prices will be supported by purchasing and storage, while in other countries of the world, inventory pressures and weak demand may force prices down.

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According to the latest global cotton production and demand forecast issued by the Advisory Committee (ICAC) in October, although China's purchasing and storage policy supports domestic and foreign cotton prices in 2011/2012, it may not provide support for global cotton prices this year.

At present, China's stock of reserve cotton has reached 4 million 600 thousand tons, and this year may continue to rise.

In September, China accumulated a total of 383 thousand tons of new cotton and sold 466 thousand tons of Chen cotton at below market prices.

Later, China may continue to throw away its reserves in similar ways, so cotton imports will drop sharply.

The International Cotton Advisory Committee predicts that China's cotton imports this year will be 2 million 500 thousand tons, less than half of the previous year.

The prediction that reserve cotton stocks continue to rise has been answered in the National Cotton Conference held yesterday.

According to the requirements of the national development and Reform Commission, the current storage cotton company has laid out nearly 4 million tons of storage capacity for the purpose of storing and storing, and demanded that the reserves increase faster in the later stage. We should continue to do everything possible to tap the potential of social warehouses, and build simple open-air storage facilities in areas where storage capacity is insufficient, so as to ensure the smooth operation of open storage and storage.

Although China's cotton purchasing and storage policy in 2012/2013 is difficult to provide support for global cotton prices, the international cotton advisory committee also believes that the global cotton prices are hard to fall sharply.

This report indicates that China's cotton will continue to be imported this year, which will make China's domestic and international cotton prices not go too far.

In January 2013, China will issue a 894 thousand ton 1% tariff quota on schedule. If the price difference is allowed at home and abroad, China will import foreign cotton at 40% tariff.

The Chinese government may allow imports of cotton in the form of processing trade.

In addition, the decrease of planting area in the southern hemisphere and the decrease of planting area in the northern hemisphere by the end of this year will provide some support for the international cotton price.

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The impact of the decline is that cotton production outside China is expected to be 18 million 600 thousand tonnes this year, down 6% from the same period last year, but the end of the global inventory (excluding China) is estimated at 9 million tons, up 16% from the same period last year, and is still at a relatively loose supply stage.