Cotton stocks continue to reduce consumption increase
May 21, 2019
In February 2012, after the Spring Festival, the domestic cotton market continued its slight upward trend before the holiday season. The prices of the yarn and cloth in the lower reaches also picked up significantly. As for the current round of rally, the policy of purchasing and storing cotton was not neglected. The policy of receiving and storing cotton has formed a strong support for the domestic cotton price and indirectly led the international cotton price to run at a relatively high level. Before the end of the policy of purchasing and storing cotton, the domestic cotton price is expected to maintain a strong and steady trend. The continuity of purchasing and storage policies will help to reduce the cotton supply fluctuation in the next fiscal year. After the policy of purchasing and storage is completed, with the supply still relatively adequate and the downstream demand weak, there is a downward trend in cotton prices pressure. Market Review - Foreign cotton prices fell slightly Domestic and foreign spreads continue to widen Since late January, due to the expected decrease in cotton demand, US cotton production expected increase and the index fund rollover and other factors, the decline in the price of imported cotton, domestic and international cotton spread widens. February 13, ICE Cotton futures contract settled at 91.52 cents / lb, down 36.5%. The international cotton index (M) was 102.9 cents / lb, down 42.3% from the previous year. According to the 1% tariff, the import cost of RMB is 16,698 yuan / ton, lower than the domestic market price of 2,850 yuan / According to sliding standard tax calculation, the RMB import cost of 17107 yuan / ton, lower than the domestic market price of 2441 yuan / ton, the chain expanded 440 yuan / ton. Domestically, with the promotion of purchasing and purchasing policies, the bullish sentiment in the domestic market has been strengthened. The domestic cotton prices have continued to rise after the Spring Festival. Since mid-January, the China Cotton Composite Price Index and the National Raw Food Purchase Price Index have risen slightly. As of February 13, 2012, China's cotton composite price index was 149.77, up 1.6% from the previous month. The national purchasing price index of raw grains was 138.4, up 0.75% from the previous month. The China Cotton Composite Price Index was 11.37 percentage points higher than the purchase price index of raw grain, up 1.36 percentage points from the previous month. January 2012, China's cotton imports fell. According to statistics from the General Administration of Customs, China imported 326,000 tons of cotton in January, a decrease of 464,000 tons or 58.7% from the previous month; a year-on-year decrease of 65,000 tons or 16.6%; from September 2011 to January 2012, China's total Imported cotton reached 2 million tons, an increase of 724,000 tons over the same period of last year, an increase of 56.7%. Market Analysis - Consumption of cotton stocks continue to decrease January 2012, the United States, United States PMI and other data rebounded slightly, showing signs of good, but the global economy is still facing many challenges, the outlook is worrying. The first half of this year, Italy, Greece, Spain and other euro-zone government debt have matured in order to repay their debts, the government or will implement austerity policies, triggering market turmoil, the consumer demand outlook will be even more bleak. The International Monetary Fund believes that the global financial situation is in deep crisis. In 2012, the euro zone will fall into a mild recession and will affect other regions, including the United States, emerging markets and developing countries. The IMF predicts that the world economy will grow 3.3% this year, down 0.5 percentage points from the previous year and 0.7 percentage points from the September 2011 forecast. Affected by factors such as exports, insufficient consumer demand and tight monetary policy since 2011, the domestic enterprises have been in short supply of funds, production slowed down, the real estate market has cooled down, and the economic growth has gradually come down. The IMF forecasts in the "China Economic Outlook" that China's growth rate this year is 8.25%, down 1 percentage point from the previous year and down 0.8 percentage point from the September forecast last year. Adequate supply of cotton in the world A serious shortage of precipitation in California, the spring sowing challenges. According to foreign reports, the supply of irrigation water needed for spring sowing in central California was insufficient. The accumulated precipitation in the San Jiaojin area from October 2011 to January 2012 was only 254 millimeters, less than half of the normal level in the same period of last year. The cumulative rainfall for the year The amount is not the same period last year 1/3. California is likely to fall into the long-term water shortage. Affected by the lack of precipitation in January this year, more than 80% of the state is in a dry state. From the current situation, the amount of snowmelt in mountainous areas in spring will be the least in recent years. Cotton planting in the core cotton producing area of ​​California is facing threats. India's production forecast down. According to the latest forecast from the Indian Cotton Consultative Committee (CAB), India's cotton production this year was 5,865,000 tonnes, down 187,000 tonnes from the forecast due to lower cotton yields and new cotton listings last month than the same period last year. However, the volume of cotton exports in the current year was increased to 1,428,000 tons, an increase of 68,000 tons from the previous forecast due to the increase in demand for imports from China. As of the end of January this year, India has shipped a total of 748,000 tons of cotton for export. Pakistan's new cotton market volume far exceeded expectations. According to foreign reports, the second half of January this year, Pakistan's new cotton market volume of 133,000 tons, an increase of more than doubled. As of the end of January, the total number of new cottons in Pakistan this year reached 2,312,000 tons, an increase of 22.6% over the same period of last year, far exceeding the forecast. Australia flood retreat, cotton intact. According to foreign sources, with the retreat of heavy rains and floods, the cotton-producing areas in Australia have returned to a calm state and the damage to cotton fields is far below expectations. According to the report of the local authoritative agency, dry cotton fields in Australia benefit from the recent torrential rain even more than in previous years. Only 5% of irrigated fields have matured at the onset of heavy rains. Therefore, the impact of rainfall on the output and quality of Australian cotton Micro-final output will still exceed 1.13 million tons, far exceeding last year's 900,000 tons and setting another historic high. Brazil's cotton exports soared in January. In January 2012, Brazil's cotton exports surged 173.8% YoY to 52,700 tonnes, marking a substantial year-on-year increase for the seventh consecutive month. Although the peak of Brazilian cotton exports after the October of last year has passed, the January export volume is still the highest level in the same period of history. Domestic cotton storage resources still hold a lot of space. As of February 13, a total of 1,697 cotton processing enterprises nationwide processed cotton in accordance with the requirements of the cotton quality inspection system reform program and conducted a notarized inspection up to February 13, with a test volume of 4.749 million tons. Among the cotton-producing provinces and autonomous regions, the amount of inspection in Xinjiang is 3.186 million tons, accounting for 67% of the national inspection volume, of which 1.93 million tons are for local inspection and 1.256 million tons for corps. The inspection volume in the Mainland is 2.81 million tons. As of the end of December 2011, the average grade of cotton in public semesters this year was 3.09, of which Grade 2 accounted for 22.82% of the national public examinations, an increase of 18.21% over the previous year; Grade 3 accounted for 47.82%, an increase of 16 percentage points over the previous year ; Grade 1 to 4 accounted for 96.73%, up 19 percentage points over the previous year; Xinjiang's second grade cotton accounted for 31.47%, 25 points higher than the previous year; third grade accounted for 55.22%, 14 points higher than the previous year. According to the above data, a simple calculation shows that in the current year, the grade 4 cotton of the grade 4 to grade 4 is about 4.5 million tons, and there is still plenty of room for storage and storage of resources. Overall downturn in global demand Indian yarn production recovery. According to the latest forecast by the Indian Cotton Consultative Committee (CAB), due to the increase in yarn import demand in China, Sri Lanka, Bangladesh, Vietnam and Egypt, the domestic cotton consumption in this year was raised from 3.57 million tons to 3.67 million tons. In December 2011, the number of Indian yarn export registrations was 83,000 tonnes, up 8% sequentially. Due to the increase of foreign demand and the decrease of the output of Pakistani yarn, the export of cotton yarn in India is expected to maintain its strong growth in 2012. Pakistan's exports of yarn and clothing plunged in December last year. According to foreign reports, the export of Pakistani yarn and clothing dropped sharply in December last year under the influence of multiple pressures such as rising costs, tight energy supply and weak foreign demand. Month, Pakistan's yarn exports fell 22.9%. Yarn export prices dropped sharply with the price of cotton, but the average export price of the whole year was still substantially higher than that of the previous year. In 2011, the average export price of Pakistani yarns rose 28.6% YoY, while the export volume decreased 15.0% YoY to 457,000 tonnes . In the same month, Pakistani garment exports hit 10.3 million sets, down 31.8% from the same period of last year, while exports of knitted and woven garments decreased 37.6% and 6.7% respectively. Vietnam cotton imports plunge. Due to the large decline in textile exports, the cost of imported cotton yarn is lower than the purchase price of cotton, and the import of Vietnamese cotton plummeted. According to statistics from Vietnam's Statistical Bureau, in January this year, Vietnam imported 18,000 tons of cotton, down 51.4% from the same period of last year and showed a double-digit decline in the eighth consecutive month. If the price of imported yarn continues to be lower than that of cotton, Vietnamese cotton imports in the later period are likely to continue to decline. Difficult to improve domestic demand in the global economic situation is not good, the textile demand is difficult to fundamentally improved. After the Spring Festival, the prices of cotton yarn and cotton in China increased significantly. However, according to the survey of China Cotton Net, 72% of the enterprises think that the increase of the price of yarn and cloth after the holiday is driven by the rise of raw material prices and 52% of the companies bearish the orders of the first quarter , The current market confidence is still insufficient, there is room for domestic cotton demand continued to decline. Price increases inhibit consumption. In 2011, driven by a series of factors such as raw materials, labor and energy prices, the prices of terminal textiles and apparel increased significantly, which had a certain restraining effect on consumption and exports. Since 2011, the domestic clothing CPI almost straight up, while the consumption of textiles and clothing did not accelerate growth. National Bureau of Statistics data show that in 2011 clothing consumer prices rose 2.1% for the full year, while the decline of 1% in 2010, clothing, shoes, hats, knitwear retail sales in 2011 increased by 24.2%, 0.6 percentage points lower than in 2010. On the export side, the demand restraint brought by the rising price of textile products has become more apparent under the competition from many exporting countries. According to the data of the U.S. Department of Commerce, from January to November 2011, US textile and apparel imports increased by 9.25% over the same period of last year while imports decreased by 2.14% from a year earlier. Among them, the import volume from China increased by 6.2% over the same period of last year, while the import volume decreased by 2.47% from the same period of last year. Over the same period, the volume of imports from Vietnam, India and Indonesia increased by 14.82%, 10.64% and 14.43% respectively over the same period of last year while the volume of imports increased by 9.85%, 1.84% and 1.29% respectively. According to Chinese customs data, from January to December 2011, China's textile and garment exports increased by 20.1% over the same period of previous year and 4.5 percentage points lower than that of the same period of last year. In December 2011, the export growth of China's textile and apparel dropped to less than 10% year-on- The export of cotton textile and apparel increased by less than 3% over the same period of previous year, down 13.2% over the same period of last year, showing a clear downward trend. Cost rising trend is difficult to reverse. The trend of rising cost of China's textile industry is still continuing. In particular, the upward trend of labor cost is hard to reverse. The continuous improvement of wage level has gradually changed the former low-cost labor force. National Bureau of Statistics data show that due to rising wage levels of migrant workers, in 2011 the per capita wage income of rural residents rose 21.9%. Wage income accounted for the proportion of rural residents net income of 42.5%, an increase of 1.4 percentage points. Per capita wage income of urban residents increased by 12.4%. "Difficult for employment" is still a serious problem. According to a survey conducted by China Cotton Net, 85% of the textile enterprises report intense employment after the Spring Festival. Supported by the national purchasing and storage policy, the stable operation of China's cotton market has provided a reliable guarantee. However, at the same time, the domestic cotton price is pushed up higher than the foreign cotton price, which has made the domestic downstream cotton industry bear the cost of raw materials which is substantially higher than that of foreign counterparts. Raise the yarn, cloth, clothing and other industrial chain a series of product prices. Many enterprises have started to find another way out. Some enterprises are actively seeking investments in factories abroad in other countries such as Vietnam to reduce labor costs and raw material costs. Others have increased the import of raw materials and intermediate products to hedge their rising domestic costs. Market outlook - losing support for the downward pressure on the downward pressure on purchasing and storage policy this year will end by the end of March, the current domestic cotton prices near temporary storage price operation, the regulatory effect is more obvious. The next year's temporary storage price announced, the price is higher than this year, it can be said that the next year the level of cotton prices have some protection. The cotton market is very crucial from the close of purchasing and storage in March to the year before next. From the supply and demand situation, as of February 14, the current year's reserves have reached 2.544 million tons, exceeding the domestic cotton production this year, 1/3, in the last month of purchasing and storage policy, in order to avoid business risk after the end of the policy is expected Many companies will take the "pocketed" attitude, and actively deposited. Therefore, the domestic reserves received this year is expected to reach 3 million tons. It is expected that the market will not be tightened until the country releases the reserve-throwing policy and the market demand is relatively stable. However, based on the current data, it is speculated that under such circumstances, the cotton market can still achieve a relative balance in the future. According to the national cotton market monitoring system purchase and sales data, if the receipt and storage to reach 3 million tons, the supply of cotton and the amount of cotton import quota issued in the latter part of this year totaled 4.76 million tons. According to the current cotton consumption level of textile enterprises, The demand is roughly 4.68 million tons, the basic balance between supply and demand. According to the above data, if the receipts and receipts substantially exceed 3 million tons, the market supply may be slightly tightened in the current consumption level of cotton consumption. However, there is no shortage of cotton both at home and abroad. According to the ICAC production and sales forecast, in 2011/2012, with the exception of China, global cotton production will need 517 million tons. After the policy of purchasing and storing reserves has been completed, there is ample stockpile of reserve cotton and the country has strong market control ability. Issuance quotas and throwing-aside policies can be introduced at any time. In addition, the cotton market there is still a greater potential pressure this year, purchasing and storage policy after the end of the cotton price policy support, the downward pressure will gradually appear. First of all, compared with national cotton, imported cotton has strong competitiveness in terms of price. At present, the difference between domestic grade 3 cotton and imported cotton under the sliding standard tax is above 2,400 yuan / ton. Second, the cotton demand in the textile industry is weak and there is room for further compression. Such as tight supply of cotton or rising cotton prices, there are many ways for textile enterprises to reduce their cotton consumption, such as increasing the imports of intermediate products (cotton yarn, cotton cloth) and even the final products; increasing the amount of substitutes such as polyester staple fiber, Grade 3 cotton and polyester staple fiber price difference of 7300 yuan / ton, the use of alternative raw materials have a strong appeal to businesses; some businesses may seek to Southeast Asia and other lower-cost transfer. Thirdly, the output and quality of domestic cotton increased significantly as compared with the previous year. According to the above data, at present only the medium and high grade cotton at the level of the public security examination has exceeded the volume of 2 million tons of handicrafts. Therefore, a considerable amount of High-grade cotton. In February, the National Cotton Market Monitoring System made the following adjustments to the production and sales data: the domestic cotton consumption in 2011 was reduced to 86.96 million tons, a decrease of 180,000 tons; the import volume was increased to 4.21 million tons, an increase of 24,000 tons. After adjustment, domestic cotton ending stocks increased by 207,000 tons to 5.280 million tons this year, ending stocks consumption ratio was 60.6%, an increase of 3.6 percentage points from the previous month. In FY2012, the opening inventory increased 207,000 tons to 5.280 million tons correspondingly. The import volume was reduced by 81,000 tons to 2.91 million tons and the consumption decreased by 110,000 tons to 8.992 million tons. After adjustment, the inventory at the end of next year increased by 236,000 tons to 5,895,000 tons, ending inventory consumption ratio was 65.96%, an increase of 3.4 percentage points from the previous month.