Commodities have experienced a sharp correction recently, and cotton is no exception. All the gains in the past two weeks have been given back. Sometimes the market is like this. It rises step by step, but when it falls, it plummets. What is the reason for such drastic fluctuations in the market?
The author believes that the main reason is the epidemic. Currently, there are more than 90 million confirmed cases of COVID-19 in the world, including more than 22.54 million confirmed cases of COVID-19 in the United States, and more than 370,000 deaths. Not only is the foreign epidemic intensifying, but the domestic epidemic is also showing a trend of multiple outbreaks. Confirmed cases have appeared in Beijing, Hebei, and Heilongjiang, and Shijiazhuang has adopted city closure measures to prevent the spread of the virus. In addition, virus mutations have also raised questions about the efficacy of vaccines, leading to pessimistic market sentiment, and some profit-taking orders have also exacerbated the downward trend.
The author believes that the impact of the epidemic is temporary and will not last long. As the number of people vaccinated increases, the anti-epidemic effect will gradually appear. Of course, this will take enough time. Before the effect is significantly improved, a resurgence of the virus cannot be ruled out. . Therefore, the future rise in cotton prices will not be smooth sailing, but will continue to fluctuate repeatedly. As long as the global economy can get back on track, consumption will usher in explosive growth. Of course, the market will also have doubts. There will still be many negative effects in the future, and it remains to be seen whether consumption can recover as scheduled. In 2020, cotton prices rose from around 10,000 yuan/ton to about 15,600 yuan/ton amid people’s doubts. Only when there are differences will the market move. If the market agrees, there is no talk of rising without long and short opponents.
It is undeniable that 2021 will still be an extraordinary year. Before the world tightens monetary policy, and under the premise of increasingly strong inflation expectations, coupled with the recovery of consumption, cotton prices are very likely to continue to rise. There is specific room for growth. How big it is depends on the actual trend of the market. </p
