800 Thousand Tons Of Quasi Tax Quota Added To The Cotton Spinning Industry.

In April 12th, the NDRC issued a quota of 800 thousand tons of cotton import quota in 2019. On the 15 day, Zheng cotton futures rose sharply, opening at 15990, rising 135, closing 16120, rising 215, and the spot market was driven by a small margin. But the next day futures rose.

Why did Zheng cotton begin to rise after April? According to long Zhong information, there are several reasons:

1. With the issuance of 800 thousand tons sliding tax, the impact of the state-owned cotton mill on the market will be weakened in the coming period. Therefore, it is expected that some enterprises waiting for dumping will turn to the domestic spot market for procurement and support the price in the short term.

Two, from domestic inventory, the stock of reserve cotton has dropped to about 2 million 700 thousand tons officially approved, and the probability of large-scale dumping is not large.

Three, the recent large-scale planting in the territory has been opened. Most cotton planting areas or varying degrees of decline, are lower than the previous prediction.

Four, last week, ICE cotton rose sharply, up 0.84, closing at 78.85 cents / pound, and ICE cotton continued to rise due to various factors. If the external market rises sharply, it may also drive domestic prices up. Zheng cotton main company continued to rise, rising 265, to 15905.

Five, the increase of this wave of hundreds of points may also be a positive potential for the positive development of Sino US trade negotiations.

Six, from the commodity market, agricultural products are in the value depressions, and some agricultural products, including cotton, become the option of multi fund allocation.

However, most of the futures funds are short-term behavior driven by news. With the news digest, the focus of market attention has once again returned to the basic influence of quotas on cotton and cotton spinning.

First of all, the main purpose of this quasi tax quota issuance is to reduce the price difference between domestic and foreign cotton, support the price of foreign cotton, and at the same time make domestic cotton prices not rise substantially, helping enterprises to make a smooth transition. Secondly, it solves the demand of high quality cotton for spinning enterprises, and helps to maintain the sustainable development of textile industry in the long run. Therefore, the quota will not impact domestic cotton market, but also help export enterprises to do well in operation.

According to the current cotton spot market situation, because of Zheng cotton's short-term upward drive, as of today, the price of intra regional quotas increased by 100 yuan / ton except Changji, and the rest areas remained unchanged. In terms of the post spinning links, most of the spun plants are stocked with stock, and the actual price rises are limited. Therefore, the general intention of stocking the raw materials is generally low, and the overall order of downstream weaving is generally. Therefore, cotton and cotton spinning are showing a state of being bland.