1. Current cotton price trends during the COVID-19 epidemic
Due to the concentration of the COVID-19 epidemic during the Spring Festival Affected by the outbreak, Zheng cotton once fell to the limit on February 3, 2020 (the first trading day after the Spring Festival), and fell to 12,580 yuan/ton on February 4, a decrease of 935 yuan/ton from before the Spring Festival. Zheng cotton fell by 6.9%. Later, with the implementation of the policy of increasing Xinjiang cotton rotation, Zheng cotton gradually rebounded and returned to stability. But the good times did not last long. Since late February, with the spread of the new coronavirus pneumonia epidemic around the world, cotton prices have fallen again.
2. Cotton market environment under the current epidemic
First, panic about the epidemic is rising. Starting from late February 2020, the number of global COVID-19 cases and countries affected by the epidemic continued to increase. Starting from the end of February, the number of new cases outside China began to exceed the number of new cases within China, with South Korea, Italy, Iran, and Japan The COVID-19 epidemic is rapidly expanding in various regions around the world. The World Health Organization has raised the risk assessment of the global spread and impact of COVID-19 to ‘very high’.”
Second, there is greater pressure to slow down economic growth. China in April 2019 The GDP growth rates in each quarter were 6.4%, 6.2%, 6.0%, and 6.0% respectively. Recently, the President of the International Monetary Fund (IMF) predicted that the new crown epidemic may reduce the global economic growth rate in 2020 by 0.1 percentage points, while the overall growth rate of the Chinese economy The annual growth rate will likely drop to 5.6%. As the COVID-19 epidemic spread around the world in late February, U.S. stocks fell off a cliff, further increasing the downward pressure on the global and Chinese economies.
Third, the trade environment is not optimistic about trade. Although China and the United States signed the first phase of the trade agreement on January 15, 2020, and the Sino-US trade friction briefly ceased, the current Sino-US trade friction has not yet ended. In the long term, the epidemic will not affect The trade policy trends of both sides will affect the trade environment. As the most active and largest foreign trade exporter, China’s textile and apparel exports will inevitably bear the first responsibility.
Fourth is Xinjiang’s cotton rotation policy It will have a positive effect on the market. In 2020, Xinjiang cotton imports will be launched for the first time six years after the temporary purchase and storage ended, which will alleviate the pressure on the domestic spot market to a certain extent. The new crown epidemic suddenly struck, and relevant national ministries and commissions made timely policy adjustments and announced daily increases The quantity of cotton entering Xinjiang has increased from 7,000 tons/day to 18,000 tons/day, which has played a positive role in preventing the spread of panic in the cotton spinning industry chain. Compared with other commodities, the cotton market is supported by purchasing and storage, and the room for decline is relatively limited.
3. Periodic pressure on cotton prices is still relatively high
Although the SARS epidemic in 2003 and the current COVID-19 epidemic occurred at the same time, Similar, but the impact of this year’s COVID-19 epidemic is relatively greater than that of SARS. The World Health Organization has raised the risk assessment of the spread and impact of COVID-19 on a global scale to “very high.” The current epidemic is occurring in an already fragile economy and The trade environment is adding insult to injury to the consumer market, and the impact on cotton demand prospects cannot be ignored. If the global epidemic continues to spread, the global economy and trade will be impacted, and the periodic downward pressure on cotton prices will still be relatively large. As for today’s cotton textile companies, In other words, the core is how to face uncertainty, respond to discontinuous market environments, turn challenges into opportunities, and survive the “cold winter”.
</p
