In October, Zheng cotton prices surged sharply and then fell back, which also had a greater impact on the acquisition of new cotton this year. Especially when CF2101, the main product of Zheng cotton, hit a high of 15,300 yuan/ton in mid-October, seed cotton also hit the highest price since its launch this year. As some ginning companies have finished harvesting and are concerned about downstream demand, enthusiasm for harvesting new cotton has gradually declined, followed by a continued decline in seed cotton prices.
As we all know, the price of new cotton has continued to rise since its launch this year, causing the cost of cotton at the production end to be inverted with the actual market price. The pressure on cotton companies has increased and they have no intention of rushing to sell lint cotton. However, after entering November, some cotton companies began to sell some new cotton through resale and packaging. The reasons are mainly as follows:
First, the price of seed cotton has fallen, and the absolute cost of cotton companies has dropped. Recently, the price of hand-picked cotton in Aksu is 7.4-7.6 yuan/kg, and that of machine-picked cotton is 6.5-6.8 kg, down 0.5-0.7 yuan/kg from the October high. Although cottonseed has also declined, its price is still much higher than last year. . Therefore, the pressure on the cost side of ginning enterprises has decreased; secondly, the prices of Zheng cotton futures CF2101 and CF2105 have been inverted. As the futures price with price discovery function is at a discount in the far month, it has affected the confidence of some enterprises to bullish the forward market, and has also caused It is difficult to achieve futures selling hedging, and the strategy of risk transfer between contracts 1-5 has come to nothing. Cotton companies have appropriately disposed of some low-cost spot goods to reduce inventory and avoid market risks; third, the pace of downstream gauze spot transactions has been slowed down. Textile companies have been cautious in making inquiries, which has restricted the timely realization of cotton-related trading companies and processing companies, and the attitude of waiting for the price has changed. Fourth, under the influence of the US election and the development of the global epidemic, it is difficult for the market to make decisions on Chinese and even global cotton. An accurate assessment of the problems faced by the development of the textile industry, coupled with the global oversupply of cotton, is detrimental to the continued upward recovery of cotton prices. According to ICAC’s latest forecast, global cotton consumption will continue to be under pressure in 2020/21, and high inventories will restrain cotton price increases. </p
