Global Cotton Price Keeps On Rising

September 20, Zhengzhou Commodity Exchange cotton Futures jump high open, one breath across the 20000 yuan per ton level, and then sealed in the limit board. Cotton futures on the New York Futures Exchange hit a 15 year high over the weekend. Cotton is hot all over the world, and the price is high. Market participants pointed out that cotton producing countries are expected to reduce production, new cotton listing is delayed, and Tight supply and demand Such as push up cotton prices continue to rise

International: new high

Dong Shuzhi, general manager of the R & D Department of Jinshi futures, said in an interview with the reporter of international financial news: "domestic cotton futures The price is affected by domestic and foreign factors. At present, the global cotton inventory is at a historical low, and the supply and demand are tight. The cotton price in the international market has reached a new high, which has driven the domestic price. "

Last week, New York Futures Exchange cotton futures rose 7.6%, fund buying enthusiasm. On Friday, the most actively traded December contract also surged 2.46 cents to 98.22 cents a pound, the highest closing price since 1995.

Due to the weather, many cotton producing countries are expected to reduce their production. The floods in Pakistan have reduced cotton production by 17%, and the wet weather in China has also damaged cotton growth. At present, the global cotton supply is tight. It is estimated that the cotton supply will drop to 45.44 million bales by the end of 2010 / 2011, which is the lowest level in nearly 16 years. According to the latest report of the U.S. Department of agriculture, the ending inventory fell to 9.892 million tons, and the ratio of inventory consumption at the end of the period dropped to 37.7%, a new low in 15 years.

Market analysts believe that international cotton prices will be high consolidation in the future. Brown, head of Keith brown, said cotton prices could climb to $1 a pound, but there could be a period of consolidation after that. Brokers Flanagan trading believes that the resistance level of cotton contract in December is 99.15 cents and 1 dollar per pound, and the support level is 98.20 and 97.45 cents per pound.

Domestic: full line limit

Affected by the high international cotton price, Zhengzhou Commodity Exchange rose and closed on September 20.

Dong Shuzhi pointed out: "the current market is generally expected to reduce cotton production in 2010 / 2011." Guantong futures analyst Ma Yuanyuan pointed out: "now Zheng Mian's main contract is 1105 contract, which represents the new year's cotton. Zheng Mian's rise is mainly based on the domestic market's tight supply and demand of new cotton at the listing stage."

Ma Yuanyuan also pointed out: "the weather in the main cotton producing areas of Hebei, Shandong and Xinjiang is not good. In the early stage, the yield is predicted to be greatly reduced by 20% to 30%. Of course, the key to the final conclusion is that the growth period of cotton can not be predicted

Since September, some new cotton has been gradually listed, but the market price has not dropped because of the new cotton listing, but the longer and higher. "On the one hand, due to excessive rainfall, the centralized listing time of new cotton was delayed; on the other hand, the quality of the cotton that was first put on the market was not good, the cotton could not be pollinated due to continuous rainfall, the flower buds and bolls fell off seriously, and the cotton peach was hit by rain before its growth, and the cotton peach was small and had high water content, which could not meet the requirements of enterprise procurement. In addition, the old cotton inventory is nearly exhausted and the new cotton listing is delayed. The market is in a period of green and yellow, and the supply shortage is still obvious. " Dong Shuzhi said.

Ma Yuanyuan told reporters that the demand for cotton last year was 10.35 million tons, and this year's demand will increase by about 200000 tons. "Since last year, the operation and sales of cotton downstream cotton textile enterprises have been good, and the clothing industry has continued to warm up."

Price: high consolidation

"In the short term, there will be no big changes in market fundamentals for the time being." Ma Yuanyuan pointed out that "although the price of Zheng cotton has been rising and exceeded 20000 yuan per ton, the price reflects the basic situation and is still within a reasonable range."

The Standing Council of cotton growers next year pointed out that the increase of cotton area and cotton price is conducive to the stability of cotton supply and demand in China.

However, the process of cotton price rising is also a process of risk accumulation. China Cotton Association pointed out that high cotton price means to bring high risk to cotton enterprises and textile enterprises. There are still many uncertain factors in the late stage of new cotton market.

"High cotton prices have been changing the industrial chain of cotton textile industry. With the rise of cotton prices, the prices of cotton yarn and grey cloth will also rise, and textile and clothing enterprises will face higher costs. However, due to the huge profits of the clothing industry, it can be squeezed, and the impact on terminal consumption is still small. However, if the price of cotton continues to rise, it is bound to affect the profit model of clothing enterprises, break the high profit of the industry, inhibit terminal consumption, and thus affect the demand for raw materials of textile and service enterprises Dong Shuzhi said.

However, analysts believe that the current Zheng cotton price support is still relatively strong, short-term cotton prices will remain high. Dong Shuzhi predicted that Zheng cotton would fluctuate between 19000 and 21000 yuan per ton.

Ma Yuanyuan said that the tight supply and demand pattern at home and abroad is beneficial to cotton prices. From the technical point of view, Zheng cotton futures is still in a steady upward channel.

However, market participants have reminded that new cotton will be listed in a centralized way in October, when the price of cotton may fall, investors will not chase short in the callback for the time being, and it is appropriate to reduce the position step by step to control the risk after getting the profit order.