Supply Pressure Increased Domestic Cotton Prices Fell, Half A Year Down 23%

From the March high point, cotton prices in China dropped from 17600 yuan to 13600 yuan, and 23% in the past six months.

China's policy of raising the export tax rebates for textiles and clothing does not seem to activate the enthusiasm of the cotton market in the short term.

Recently, domestic cotton prices have been innovating low in the face of inventory pressure.

Analysts said that the downward trend of cotton breaking position has been clear, investors should pay attention to avoid risks.

Cotton futures fell again in Zhengzhou yesterday.

After the main contract of 0901 opened 65 yuan at a price of 13850 yuan / ton, the concussion went down to 13665 yuan / ton at the end of the month, which was 250 yuan or 1.8% lower than the previous settlement price.

Moreover, the volume of the contract also increased by more than 3 times compared with the previous day, increasing to 12 thousand and 700 hands, and the position increased by 1354 to 22 thousand and 900.

Traders said that spot consumption was sluggish, and a large backlog of stock was in the hands of traders and producers. Therefore, spot enterprises had strong desire to maintain value through futures.

In addition, the market empty side also borrows the policy of the country to raise the tax rebate of textile and clothing export, and put pressure on the high level, showing that the market sentiment is very strong.

Since August 1st this year, the state has raised the export rebate rate of some textiles and clothing from 11% to 13%.

This may bring some breathing space to the cotton industry which is on the brink of collapse. However, falling cotton prices indicate that market demand has not really started yet.

According to statistics, since the new export tax rebate policy, domestic cotton prices have plummeted by more than 5%.

Moreover, from the March high point, the domestic cotton price dropped from 17600 yuan to 13600 yuan at present, and 23% in the half year.

Cotton prices fell from 92.86 cents to 68.45 cents in the same period, or 26%.

Analysts believe that by the adverse effects of RMB appreciation and rising inflation, domestic cotton textile and garment enterprises have difficulty in running, which has greatly weakened the market demand for cotton.

According to the July forecast report of the US Department of agriculture (USDA), China's cotton output will remain unchanged at 7 million 729 thousand tons in the second half of the year, but the consumption will be reduced by 220 thousand tons to 11 million 757 thousand tons, the import volume will be 2 million 939 thousand tons, less than 3 million tons and the futures stock of 3 million 579 thousand tons compared with the June forecast.

In addition, pressure from supply is increasing.

According to analysts, Xinjiang cotton is affected by the 400 yuan / ton pportation subsidy policy. Xinjiang cotton has been pported in large quantities in recent days, and the warehouse in the mainland is full.

At the same time, cotton enterprises are also under the pressure of the agricultural development bank to urge loans, and actively reduce sales prices. The sales price of Xinjiang cotton has generally declined by around 100 yuan.