It is understood that since late December, the daily cotton processing volume in Xinjiang has fallen below 40,000 tons, and has continued to be between 35,000 and 38,000 tons. Among them, the processing growth rate of the cotton areas in northern Xinjiang has continued to slow down, and the cotton areas in southern Xinjiang have continued to slow down due to recent weather conditions. The situation has improved, the “war against the epidemic” has been won, and the processing volume has remained stable or even rebounded slightly. According to statistics, as of December 20, Xinjiang has processed a total of 4.5541 million tons of lint cotton in 2020/21 (including 2.7169 million tons of lint cotton in the autonomous region and 1.8372 million tons of lint in the Xinjiang Corps), a significant increase compared with the same period in 2019/20. Judging from the survey of enterprises in Xinjiang, as the CF2105 contract exceeded 15,000 yuan/ton, the hedging, basis difference, and fixed-price sales of ginneries accelerated, and the transfer of resources to traders, futures companies, and cotton textile mills accelerated. The main contract of Zheng cotton has exceeded 14,700 yuan/ton, which has basically covered the comprehensive cost of machine-picked cotton in Xinjiang in the regulatory warehouse, stimulating ginners to do their own hedging or place orders and sell at fixed prices. In addition, favorable factors such as the epidemic in Xinjiang being effectively controlled, cotton road freight rates have stopped rising and the price difference between cotton inside and outside Xinjiang has reached 500-700 yuan/ton, pushing cotton companies and traders in Xinjiang to ship to inland warehouses, while railway transportation remains stable.
Based on the feedback from ginning mills in Aksu, Bachu, Kuitun and other places, a few companies have short-term liquidity needs due to factors such as large-scale reluctance to sell, low purchase volume, and high lint costs, and most companies have limited financial pressure. Cotton seed prices continue to be high in 2020/21, and most ginners sell cotton seeds while processing, recovering funds in time to prepare for repayment; second, Xinjiang cotton purchase loans in 2020/21 are not only sufficient, but also have a larger interest rate than in previous years The magnitude has been reduced, and the financial cost pressure of cotton companies is controllable; thirdly, since December, the lint cotton pledge financing business in Xinjiang has also been relatively active. Some large companies and traders have launched “warehouse receipts” to ease the cash flow pressure of ginners and cotton companies in Xinjiang. Fourth, as the CF2105 contract exceeded 15,000 yuan/ton, some ginning factories in Xinjiang sold high-quality lint cotton with high grade and large premiums through various methods such as basis price difference, fixed price, hedging, etc., accelerating The return of funds has alleviated cash flow pressure in December and January to a certain extent. </p
