Cotton Price Should Run In A Reasonable Range

 

Cotton futures become

 

Enterprise transaction pricing reference

 

"Cotton futures was officially listed on June 1, 2004. Before listing, China's cotton related enterprises felt very passive when doing import and export trade with foreign businessmen, because they all set prices according to ICE Futures plus basis difference. At the same time, after 2000, China's cotton trade to the market, but the transaction pricing is lack of reference and guidance tools He Xiyu introduced to reporters of China Securities Journal.

 

He Xiyu said, in 2004 cotton futures listed between 2010, I think or ignorant period. Because cotton futures was a new thing when it was listed on the Zhengshang stock exchange. In addition, the cotton business was basically operated exclusively by the supply and marketing cooperatives a long time ago. Because the enterprises in the society dealt more with farmers and were relatively simple, cotton futures were not fully used during this period.

 

"After August 2010, affected by the financial crisis and the contradiction between supply and demand in the market, cotton futures hit a record high again and again. In 2011, it reached a peak of 34870 yuan / ton, which brought great shock to the whole industry." He Xiyu recalled.

 

Since then, in order to protect the interests of farmers, the state has introduced a three-year policy of collection and storage, because the state's purchase price is well formulated, leading to the inactive futures market, which has continued until 2014.

 

"From 2015 to 2017, I think it is the post harvest storage era of cotton futures, which is more like a groping period. Before that, the cotton futures pricing area of Zhengshang exchange was based on the mainland, with Xinjiang as a discount. Around 2017, Xinjiang's cotton resources accounted for about 80% of the country's total, and Zheng Shangri adjusted the base price zone of cotton futures pricing to Xinjiang. " He Xiyu said.

 

According to statistics, this year, there are 1342 cotton production lines in Xinjiang, and the processing capacity has reached 10 million tons. There are 813 production lines under construction, with the operating rate of 61%, and the processing capacity of more than 8 million tons, which is more than 60% of Xinjiang's expected total output.

 

He Xiyu said that in 2019, cotton futures began to be active. Under the influence of macro environment such as trade friction at that time, many cotton related enterprises were involved in financial derivatives such as futures or options, so as to realize the importance of risk aversion.

 

Help production enterprises

 

And the development of consumer Enterprises

 

"At present, our cotton futures should be the stabilizer of production enterprises, but also the vane of consumer enterprises, and is expected to become a booster for the steady development of enterprises and ballast stones for consumer enterprises to seize the market." He Xiyu concluded.

 

What is the stabilizer? He said: there are many market processing enterprises and import and export trade enterprises through the futures market to avoid risks and stabilize operation; What is the wind vane is that many purchasing enterprises such as textile production judge the price of cotton market through the futures market, as well as the expectation of future market price, so as to control the rhythm of purchase and sale.

 

What is the booster? He Xiyu gives an example. Besides the futures market, China cotton group has also carried out more refined services. One cotton textile enterprise picked up the goods at the time of delivery. Due to the scattered distribution points and possible differences in quality, China cotton group took advantage of the advantages of the real enterprise and took over all the parts of the goods that could not be used by textile enterprises or had high cost, Directly pick out the goods needed by the above-mentioned cotton textile enterprises from the spot to meet the real demand of the cotton spinning enterprises, thus boosting the market activity.

 

What is ballast stone? He Xiyu said that as long as cotton consumer enterprises find the right order price and the right opportunity in the futures market, they can lock in the cost of enterprises and realize stable income. In fact, textile enterprises hope that the cotton futures price is relatively stable. On the basis of small fluctuations, the focus can fluctuate upward slowly. The biggest fear is the ups and downs, which has a great impact on textile production.

 

"Cotton futures are the early listed varieties in the futures market. They have become more and more mature and stable, and there are fewer and fewer opportunities for speculation, which forces many financial capital to enter into the market opportunities to seek the special financial attributes of cotton futures. The intervention of capital will promote enterprise inventory management in an orderly manner, and relieve the pressure of enterprise working capital by means of pledge and replacement He said.

 

Among them, warehouse receipt is an important tool for cotton enterprises to carry out goods pledge and financing. According to the data, in 2020, the amount of financing of cotton related enterprises through the over-the-counter business platform warehouse receipt of zhengshangsuo is as high as 6.6 billion yuan, ranking the first in the existing varieties of financing quota of Zhengzhou commercial exchange, effectively alleviating bank credit risk.

 

Cotton in China

 

It has strong international competitiveness

 

Relevant data show that China is the world's largest cotton consumer and the second largest cotton producer, and more than 87% of China's cotton is produced in Xinjiang. Represented by Xinjiang cotton, high-quality Chinese cotton has strong international competitiveness.

 

"We should have confidence in China's textile enterprises. We can't do without clothing, food, housing and transportation. I personally believe that cotton, a natural fiber, will gradually move towards high-end in people's life in the future. In addition, it also has environmental protection properties, which can be weathered or burned safely without causing environmental pollution. " He Xiyu said.

 

He said that from the perspective of carbon neutrality, there are obvious differences between chemical fiber and natural fiber. Chemical fiber has to bear the cost of carbon emission, while natural cotton has no restriction. For cotton planting enterprises, there will be more carbon emission indicators, which is a piece of value-added.

 

For the development of cotton industry in the future, he Xiyu suggested to strengthen the guidance and control in many aspects, such as standardized management of processing enterprises, agricultural production mode and agricultural production management, and cotton planting variety management; We should promote the reform of Xinjiang production and Construction Corps in a healthy and orderly way, effectively guide and moderately intervene, explore the mode conducive to the high-quality and long-term development of Xinjiang production and construction corps cotton industry, and ensure to release the system advantages and development vitality of XPCC; To drive and lead the high-quality development of the domestic cotton industry, effectively guide the cotton production, variety cultivation, regional planting and other aspects at the national policy level, so as to avoid repeating the situation that the local cotton industry was once scattered and miscellaneous; Overall consideration should be given to the relationship between current interests and long-term development in the reform, so as to drive and lead the high-quality development of domestic cotton industry.

 

He mentioned that in the process of implementing the "belt and road" strategy, it is necessary to strengthen the cooperation between domestic cotton textiles and countries along the belt and road, further enhance the export capacity of domestic textiles, and strive to reduce the adverse impact of the current international environment on the domestic cotton industry.

 

Finally, he Xiyu proposed that the cotton enterprises in the industry should consider from the perspective of sustainable development of the cotton industry, rationally purchase and operate, standardize production management and fine product processing, jointly strictly control the quality of cotton, guide each link, and strive to improve the quality of cotton. Relevant traders, asset management companies and other participants should participate in standardized, rational operation, scientific guidance, and jointly promote the high-quality development of China's cotton industry.