Since the October holiday, due to the recovery of terminal demand in the entire industry, transfer orders from India and other countries have increased, coupled with market orders brought by foreign Thanksgiving and Christmas markets, the price of raw materials in the textile market has soared, and even It changes from a few days to a day to a few hours.
Among them, the high price of cotton has caused headaches for many small partners. During that period, the domestic cotton spot reached a high of 14,923 yuan/ton, an increase of more than 2,000 yuan compared with September 30.
Image source: Textile Market Index
Especially since the new cotton scale was opened, the overall purchase price of seed cotton has continued to rise. , as the competition for acquisitions intensified, a situation of “more monks and less rice” emerged. With the support of downstream orders, traders stepped up their stockpiling, and the price of seed cotton rose again.
However, cotton prices have recently changed from their previous upward trend and have shown a downward trend, and have been falling for several days in a row recently.
On the one hand, this is due to the reduction in end demand caused by the closure of many Christmas markets abroad. On the other hand, domestic subsidies for cotton have further increased.
Take my country’s Xinjiang region as an example. The target price subsidy standard for cotton from 2020 to 2022 is still 18,600 yuan/ton, and growers can still enjoy state subsidies.
However, due to the high price of seed cotton in 2020, it is expected that the new cotton planting area may increase slightly in 2021/22, with the area likely to be 43.11 million acres, a year-on-year increase of 0.56%; the output may be 5.75 million tons , a year-on-year increase of 0.21%.
It can be said that the biggest reason for the rise in cotton prices in 2020 is the global new crown epidemic. The surge in demand for home textile products has led to an imbalance between supply and demand, so cotton prices have risen. Coupled with some of the capital speculation behind it, cotton prices have Enter the “ceiling”.
However, with the self-regulation of the market, national macro control, decline in terminal demand and other factors, cotton prices have fallen rapidly in a short period of time, causing those bosses who have made money to fall into high inventory again. in trouble.
You must know that the price of cotton yarn is based on cotton. If the price of cotton falls, the price of yarn will go down. The linkage is very fast, so if the price of cotton falls, it means Cotton spinning mills will have a large amount of high-priced inventory, and even some strong buyers can renegotiate prices with sellers.
In other words, you see that the price of cotton has dropped now, right? You can’t charge according to the previous price. You have to charge me cheaper. This causes the cotton that was originally high-priced to earn a loss now. Sell.
Besides, due to the linkage between cotton prices and yarn prices, if the cotton price drops by 100 yuan/ton, the yarn may drop by 200 yuan/ton.
Moreover, different varieties and grades of yarn are affected by cotton price fluctuations to varying degrees. If it is mainly yarn with a count of less than 40, the negative impact will be greater.
In this way, although the cotton market demand is large, due to national policy subsidies, the development of new cotton planting areas, and the slowdown in international demand, cotton prices have been relatively low in a short period of time. Compared with the previous rise, it can be said that “the defeat is certain” and will remain in a relatively stable situation.
In addition, as the dust of the recent US election has settled, new policies will be introduced one after another, Sino-US relations and the situation after the epidemic will greatly affect the subsequent cotton price, but according to professional analysis, although it is not possible Predictable factors have increased, but it is difficult to see such a large increase as this year.
In this regard, we hope that those bosses with high inventories of cotton yarn can take advantage of the recent momentum of Double Eleven and Double Twelve to speed up destocking to avoid facing a greater economic blow. </p