Zheng Cotton Will Show An Overall Trend Of Rising And Falling.

There's still a week to go. commodity market The 2011 trading year will be welcomed. Since the start of the November 26th rally, ICE cotton has risen by nearly 28%, but the domestic cotton index has only risen 9.8% in the same period.

The author believes that although the central bank suddenly announced that the second increase in interest rates could lead to Zheng cotton's continued shake up last Saturday, after the adjustment of the digestion, the rebound trend of Zheng cotton's future market can still be expected.

First, import costs continue to rise.

The US Department of agriculture's latest cotton export sales report released last Thursday showed that in the week ending December 16th, the US 2010/2011 sold 314800 cotton net sales, of which 144700 were sold to China, accounting for nearly 46%. According to the latest price estimate, the cost price of China's imported cotton is 177.73 cents / pound, the conversion price of 1% tariff is 29934 yuan / ton, the conversion price of sliding tax is 30284 yuan / ton, and the national cotton electronic matching market in December 24th only closed at 27700 yuan / ton, the price difference is very big. China is a large textile country. In recent years, the demand for textile cotton has remained stable at more than 10 million tons. In April last week, the China Cotton Association raised its cotton production forecast to 6 million 650 thousand tons in the last week's report, which was estimated at 6 million 630 thousand tons last month. The revised estimate is 2.1% less than that of last year. The gap between supply and demand of cotton in China is gradually widening. It is necessary to import cotton from some countries such as the United States and India. The rise in import cost will certainly support domestic cotton prices. At present, domestic and foreign cotton prices are upside down, unless ICE cotton can quickly return to the descending channel, otherwise, Zheng cotton's market rebound can be expected.

Two, raising interest rates to accelerate the influx of hot money

The central bank announced on the evening of 25 evening that it raised the benchmark interest rate for RMB deposits and loans of financial institutions by 0.25 percentage points since December 26th, and this time the interest rate hike was earlier than expected. The benchmark interest rate for the 1 year deposit and loan after the interest rate increase is 2.75%, which is nearly 10 times higher than the benchmark interest rate of 0.25% in the United States and Japan. The high interest margin plus the steady pace of RMB appreciation will accelerate the pace of hot money entering China. The latest data from the central bank showed that foreign exchange accounted for 319 billion 600 million yuan in November, which was significantly lower than the high level of 530 billion 100 million yuan last month, and slightly lower than the previous market expectations. However, compared with historical data, the foreign exchange account of about 300000000000 yuan is still in a high position, reflecting the trend of large inflow of foreign funds in the near future. In November, China's trade surplus and FDI were US $22 billion 900 million and US $9 billion 704 million respectively, excluding the two parts in the foreign exchange account. The inexplicable capital inflow was about 100 billion yuan, showing that the recent hot money inflow is still rapid. It is widely believed that the central bank will continue to have 2 to 3 increases in interest rates next year to curb inflation expectations, and the influx of hot money next year will be more positive. In the case of excess liquidity in the country, plus the hot money from overseas, domestic commodities, including cotton, will surely be sought after by the capital.

Three. CPI High inflation will continue.

In November, China's consumer price (CPI) rose by 5.1% over the same period, and renewed the record for the year. This is the highest increase in CPI in 28 months since the 6.3% rise in July 2008. Among them, food prices rose 11.7%, an increase of 2% over the same period last year. Experts said that China's economy has actually been in the vortex of high inflation. The era of high inflation has arrived. In the next one or two years, high inflation will continue to accompany China's economic development. China is expected to maintain high inflation level in 2011. In the latest position of the government, the national development and Reform Commission said that the target of economic growth in 2011 will be around 8%, and the target of CPI increase is about 4%. It is evident that the government has realized that the era of high inflation is inevitable. We must accept this fact and take immediate action to deal with it. In the global environment of maintaining loose monetary policy, some commodity prices have been soaring all the time, which has put pressure on China's price situation. At the same time, the expectation of high inflation has also increased the purchasing cost and price pressure of enterprises. In the case of high inflation can not be effectively suppressed, relying on the government's administrative intervention in market prices is undoubtedly seeking help.

Four, the textile industry has a good momentum.

Despite the adverse factors such as the sharp rise in the cost of cotton yarn prices, China's textile industry has achieved good results in 2010 with the help of governments at all levels. According to the statistics of National Bureau of statistics, the yarn production in China in 2010 November was 2 million 467 thousand tons, an increase of 9.8% over the same period last year. From 1 to November, the total yarn production reached 24 million 856 thousand tons, an increase of 14.8% over the same period last year. In November, the output of grey fabric in China was 6 billion 350 million meters, up 23.1% over the same period last year, and the total output of grey fabric in 1 November November reached 60 billion 450 million meters, up by 19.2% over the same period last year. China's textile industry has recovered rapidly after the financial crisis, and exports have maintained strong growth. According to customs statistics, in the first 11 months of 2010, China's total exports of textiles and clothing amounted to US $186 billion 624 million, an increase of 24.18% over the same period last year. Cotton in China Chemical fiber textile The market for processing industry has developed well. In 2010 1, November, the total investment reached 85 billion 92 million yuan (more than 5 million yuan fixed assets investment projects), up 21.90% compared to the same period, and the growth rate increased by 10.65% compared with the 2009 level (11.25%). The textile industry's strong export recovery and rapid investment increase will continue to maintain high demand for China's textile cotton in the future, supporting the trend of the cotton market.

To sum up, China's textile industry is still relatively large cotton, domestic cotton supply in short supply, in the cotton supply and demand gap gradually increased, the cost of imported cotton continues to climb, domestic inflation is high, even if the price of short-term callback finishing, but in the long term, zhengmian will overall appear easy to rise or fall.