Due to weather reasons, both hand-picked and machine-picked cotton in Xinjiang in 2020/21 were put on the market about a week earlier than in the previous year. In mid-September, not only did the number of ginners open scales increase rapidly, but the phenomenon of rush to harvest and raise prices became more and more intense.
According to surveys, on September 22-23, 40% of clothes were picked apart in Kashgar, Aksu and other places The purchase price of cotton has generally risen to 6.3-6.5 yuan/kg (the purchase price of 42-43% linseed cotton in some ginners has reached 6.8 yuan/kg). At present, the open-scale price of a small amount of 40-unit cotton picked in Kuitun, Changji and other places in northern Xinjiang has reached 5.6-5.8 yuan/kg.
Cotton-related companies in Shandong, Henan, Jiangsu and other places have expressed that it is puzzling to purchase seed cotton at a price higher than expected by more than 0.50 yuan/kg, and the futures price is “upside down” “With the uncertainty of external markets and news, we have to postpone the signing of Xinjiang cotton warehouse receipts and quasi-warrants (basis procurement) for 2020/21, and the wait-and-see sentiment is heating up. Why is the opening price of seed cotton so high in 2020/21? The author believes that there are several main reasons:
First, in the past two years, Xinjiang’s cotton processing capacity has continued to grow, and the contradiction between insufficient cotton resources and excess processing capacity has become increasingly prominent.
Secondly, a few ginneries in Kashgar, Aksu and other places received orders for wadding (or civilian cotton) in August and September, driving up the price of seed cotton throughout Xinjiang. On the one hand, the purchase price given by cotton cotton customers is relatively good (the horse value is required to be above 5.0); on the other hand, the ginners are required to enter the warehouse and ship out of Xinjiang by truck before mid-October, so cotton companies can only “quick purchase, quick processing, Ship quickly” and “break through” mentality is strong. According to statistics, as of September 22, Xinjiang had processed a total of 7,900 tons of lint cotton in 2020/21, concentrated in Bachu, Maigaiti, Yuepu Lake and Aksu.
The third is the “radical” basis purchasing by cotton traders, which stimulates farmers and ginners to wait for the price. The U.S. government has shelved a broad ban on cotton products from China’s Xinjiang region, and concerns among cotton processing companies and traders have significantly eased. Since late August, purchasing personnel from mainland cotton trading and operating companies have set off to Xinjiang to negotiate basis purchases. Not only are ginners fully financed, but cotton traders are not afraid of high cotton prices, but are worried about not being able to purchase cotton.
Fourthly, due to the impact of epidemic prevention and control in Xinjiang cotton areas in 2020, there is a serious shortage of flower picking workers, and the picking, listing, and delivery period of seed cotton has been lengthened, resulting in a shortage of seed cotton resources and ginning. The contradiction of mismatched capabilities has become more prominent, and farmers have changed from passive to active. With all the equipment, workers, and funds in place, ginning factories joined the rush to harvest.
Fifth, the prices of cotton seeds and cotton byproducts will be relatively high in 2020, which will spread and dilute the pressure of rising lint costs to a certain extent. </p
