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Analysis And Prospect Of Cotton Situation In China

2020/11/2 13:11:00 0

Analysis Of Cotton Situation

On October 30, at the 2020 China Cotton Industry Development Summit Forum hosted by China Cotton Association, Wang Jianhong, deputy director of agricultural materials and cotton and hemp Bureau of all China Federation of supply and marketing cooperatives and vice president and Secretary General of China Cotton Association, delivered a speech entitled "analysis and Prospect of China's cotton situation".

He said that this year is a very special year. So far, our country has initially overcome the epidemic situation, and the economy has continued to improve. However, internationally, the epidemic is still spreading, the world economy is in deep recession, the external environment is very complex and severe, and the domestic economy is still digesting the adverse effects of the epidemic situation. Generally speaking, demand is slower than supply Consumption is slower than investment. The normalization of epidemic prevention and control is normal, the external environment is complex and severe, the domestic demand is insufficient, the safety risk of the industrial chain supply chain, the production and operation of enterprises are difficult, and the inventory is overstocked. The epidemic situation has added new variables to the world's three major changes in a century. The impact on the world economy is still further developing and evolving, especially the impact on China's cotton industry will continue.

He introduced the current situation of cotton. Generally speaking, the policy is stable, the production is stable, the import and demand are reduced, the cotton price fluctuates greatly, the supply and demand are basically balanced, and the industry is adjusted and recovered.

The industrial policy remained stable, and the macro-control was constantly improved. On the one hand, the production was stable. The cotton target price policy of 18600 yuan per ton was evaluated every three years to stabilize domestic cotton production in the next few years. The second is to de stock and reserve cotton rotation policy, which supports the domestic cotton price, ensures the cotton demand of textile enterprises, and adjusts the inventory structure. The third is to increase supply. The fourth is to reduce costs.

Since 2014, the cotton planting area in Xinjiang has been actively increased and the cotton planting area in Xinjiang has been fully stabilized. Affected by planting benefit and agricultural structure adjustment, the cotton planting area in other cotton areas decreased year by year. According to the survey of China Cotton Association, the cotton planting area in China will be 48.16 million mu in 2019, and 45.97 million mu in 2020, a year-on-year decrease of 4.54%. The area of Xinjiang is 36.66 million mu, accounting for 80% of the total.

In terms of output, the cotton output of China in 2019 / 20 will be 5.91 million tons, a year-on-year decrease of 3.4%. It is estimated that the national cotton output in 2020 / 21 will be 5.932 million tons, with a year-on-year increase of 0.44%, including 5.244 million tons in Xinjiang, a year-on-year increase of 4.1%, 396000 tons in the Yellow River Basin, a year-on-year decrease of 15.3%. Due to the impact of floods in the Yangtze River Basin, the output will drop greatly, which is 256000 tons, a year-on-year decrease of 28.9%.

Reserve cotton rotation enriches market resources. From July 1 to September 30, 2020, 2011-2013 annual reserve cotton will be rolled out. This round of reserved cotton meets the demand of domestic textile market, and the price advantage is large, which is welcomed by enterprises. As of September 30, the trading volume was 503000 tons, with a turnover rate of 99.9%, including 283000 tons of cotton in Xinjiang and 220000 tons of cotton in the mainland.

From the perspective of the current cotton reserve rotation mechanism, it is more in line with the market rules. From December 2, 2019 to March 31, 2020, 371600 tons of cotton were transferred into Xinjiang, with a transaction rate of 47%; among them, 359100 tons were traded in the mainland and 12500 tons were traded in Xinjiang, with an accumulated average transaction price of 13089 yuan / ton. In 2020, in order to strengthen the management of the central cotton reserve, further optimize the reserve structure and improve the quality of the reserve, it is decided to rotate some Xinjiang cotton from December 1, 2020 to March 31, 2021, with a total of about 500000 tons, and about 7000 tons of cotton are put up for auction every day.

From the perspective of cotton imports, China's cotton imports declined due to the factors such as abundant domestic cotton supply, declining demand and mutual tariff between China and the United States. Data from the General Administration of Customs: in 2019 / 20, China imported 1.602 million tons of cotton, down 21% year on year. In September 2020, China's cotton import volume was 210300 tons, with a month on month increase of 48.3% and a year-on-year increase of 152.5%. All five major source countries grew, with the United States accounting for 69%.

The change of import source structure is that the proportion of cotton import source countries will change in 2019 / 20, with Brazil accounting for the highest proportion of 35.44%, followed by the United States of America (34.90%) and Australia (11.09%). After the signing of the first stage economic and trade agreement between China and the United States, China promised to increase the import of agricultural products from the United States, and actively implemented the agreement. The quantity of cotton imported from the United States continued to rise.

In terms of textile consumption, textile consumption recovered slowly. In 2019, China's cotton consumption as a whole declined to 7.65 million tons, a year-on-year decrease of 5.2%. Since September 2020, the textile industry has shown a recovery growth trend, and the demand for cotton is also slowly picking up. China Cotton Association predicts that the national cotton consumption in 2020 / 21 will be 7.99 million tons, with a year-on-year increase of 4%.

From the perspective of domestic demand for textiles, in 2019, due to the sluggish domestic demand, the retail value of domestic clothing, shoes and hats, knitted textile products accumulated 1.21 trillion yuan, a year-on-year decrease of 11.71%. In particular, affected by the new crown epidemic, the sales volume decreased significantly. In August, it turned from negative to positive for the first time this year. In September, the sales volume reached 112.48 billion yuan, an increase of 8.3% year-on-year.

The output of yarn and cloth both decreased. In 2019, the national yarn output was 26.529 million tons, a year-on-year decrease of 10.99%; the cloth output was 40.1 billion meters, a year-on-year decrease of 21.83%; the chemical fiber output was 60.204 million tons, with a year-on-year increase of 9.31%. In September 2020, the yarn output was 2.459 million tons, a year-on-year decrease of 4.9%; the cloth output was 3.4 billion meters, a year-on-year decrease of 12.6%; the chemical fiber output was 5.417 million tons, with a year-on-year increase of 2.5%.

The decline of commercial inventory was relatively large, because the rotation of reserved cotton was delayed by two months compared with last year, and the rotation of some Xinjiang cotton, the commercial inventory at the end of the year continued to be lower than that of the same period of last year. At the end of 2019, the cotton inventory of China Commercial Association decreased by 2.455 million tons. In September 2020, the commercial inventory of cotton in China was about 2.093 million tons, with a year-on-year decrease of 110000 tons, and the industrial inventory of 659000 tons, a year-on-year decrease of 6.1%. Xinjiang cotton used by textile enterprises accounted for about 90% of the total cotton consumption.

The supply and demand of domestic cotton is basically balanced. Although the production of textile enterprises has a recovery growth, the demand for cotton is slowly rising. A large number of new cotton are on the market, and the supply and demand are basically balanced. We forecast that in 2020 / 21, the total cotton production in China will be 5.932 million tons, with a year-on-year increase of 0.44%; the import volume will be 1.98 million tons, with a year-on-year growth of 25.3%; and the consumption will be 7.99 million tons, with a year-on-year increase of 4%.

From the perspective of global cotton supply, the overall situation is loose. According to the latest supply and demand forecast report of USDA in October, the global total output is expected to be 25.315 million tons in 2020 / 21, and the consumption is 24.866 million tons, and the output is 449000 tons. The inventory consumption ratio is expected to be 88.6%, which is lower than that in 2019 / 20, but still at a high level in recent five years.

Cotton prices fluctuate greatly in 2019. Affected by trade friction between China and the United States, the outbreak of the new crown epidemic and other factors, the cotton price dropped significantly. Since April, the domestic economy has recovered steadily and cotton prices have risen steadily. Since the new year's cotton listing, the domestic cotton price has risen substantially, and the domestic cotton price trend is basically consistent with that in China.

In 2019, the average price of China's cotton price index was 15190 yuan / ton, a year-on-year decrease of 4.57%; the annual average price of main contract of Zheng cotton futures was 12453 yuan / ton, a year-on-year decrease of 15.24%. Since the new year's cotton listing, domestic cotton prices have risen sharply. As of October 29, China's cotton price index (3128b) was 14641 yuan / ton, an increase of 1933 yuan or 15.21% compared with the end of August; the main contract of Zhengzhou cotton futures reached 15305 yuan / ton, which fell back recently and closed at 14435 yuan / ton on the 29th, up 1306 yuan or 9.95% compared with the end of August.

The trend of international cotton price is basically consistent with that in China. The average price of cotook a index in 2019 / 20 is 71.3 cents / pound, down 13.44% year on year. The average annual settlement price of recent ice futures contracts was 62.1 cents / pound, down 13.77% year-on-year.

While the cotton price fluctuates greatly, the price difference between internal and external cotton fluctuates greatly. As of the end of August, the average price difference of internal and external cotton in 2019 is 181 yuan / ton, and the maximum price difference of internal cotton is 1066 yuan / ton when it is higher than that of external cotton, and it has been inverted several times.

Since the listing of new cotton this year, the purchase price of seed cotton has remained high. According to the survey of China Cotton Association, as of October 15, the national cotton picking progress was 63.2%, 13.17 percentage points higher than that of the previous year; the sales progress was 49.9%, 11.8 percentage points higher than that of the previous year; the average selling price was 6.39 yuan / kg, up 17% year-on-year. Among them, machine picking cotton began to be picked in large area at the end of September in Xinjiang. Due to the large increase of ginning plants and excess capacity, competition for purchase has occurred from time to time. Since the scale was opened, the price of hand picked cotton has risen from about 6.4 yuan / kg to 8.1 yuan / kg. The price of machine picked cotton has risen from 5.6 yuan / kg to 7.2 yuan / kg, both higher than last year's 2 yuan.

At the same time, the processing capacity of new cotton has also increased significantly. In September, the purchase of new cotton began in succession, and the purchase price, processing volume and public inspection quality indicators were higher than those in the same period last year. During the production period of Xinjiang, the weather conditions are good, the scales are opened early, the purchase price is high, and the cotton farmers sell actively; the processing enterprises in the mainland hold a cautious wait-and-see attitude. As of October 28, the total processing capacity of 400 cotton processing enterprises was about 1.6411 million tons, an increase of 23.35% year on year. As of the 22nd, the average purchase price of seed cotton was 6.57 yuan / kg, up 7.93% year on year.

Many people have reflected the cotton quality problem of Xinjiang production and Construction Corps this year. From the overall data, it is better than last year. According to the data of China fiber quality monitoring center as of September 30, 2020, the color grade, length grade and micronaire index of new cotton are better than last year.

Looking forward to the cotton market in 2020:

First, the domestic economy overcame the adverse effects of the epidemic and maintained a steady recovery trend. The main economic indicators continued to rise, and positive changes gradually increased. Under the new development pattern with the domestic major cycle as the main body and domestic and international dual cycles promoting each other, the basic trend of stable and good economy has not changed.

The National Development Commission will continue to improve the cotton import quota of 2.024 million tons and keep the cotton price stable by 2021 million tons.

In view of the current situation, he reminded everyone to guard against future business risks.

Finally, he said, China's cotton industry has scale advantages and strong self circulation ability, which is conducive to coping with the uncertainty of the external environment with its own development stability. By stimulating new growth momentum and creating new growth points and growth poles, we believe that under the new pattern, we will adhere to, jointly develop and innovate to achieve high-quality development of the cotton industry.


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