Yesterday afternoon, the National Development and Reform Commission announced the national policy to improve the cotton target price in Xinjiang. In order to implement the spirit of the 2020 Central Document No. 1, with the approval of the State Council, the cotton target price policy will be improved in Xinjiang starting from 2020. The target price level will be per The price per ton is 18,600 yuan, which is evaluated every three years. The target price level is adjusted as appropriate based on the evaluation results.
Recently, large fluctuations in cotton futures spot prices at home and abroad have attracted market attention. Zheng cotton futures prices It rose from the bottom on March 24, hit the daily limit at the end of March 25, and continued to oscillate higher on March 26. While the majority of investors are struggling to predict how cotton will perform today, the cotton target price of 18,600 yuan per ton will once again remain unchanged for three years. What will be the opening trend of Zheng Mian today?
The state improves Xinjiang cotton target price policy
From 2017 to 2019, the country deepened the cotton target price reform in Xinjiang, and the cotton target price determined within three years was 18,600 yuan/ton. Judging from the effects of the cotton target price policy implemented in Xinjiang over the past three years, the reform results have continued to show. While ensuring the income of cotton growers, the role of market mechanisms has been further brought into play, which has effectively promoted the structural reform of the agricultural supply side and the entire Xinjiang cotton industry. Chain development has played an important role in promoting the stable economic and social development of Xinjiang. Therefore, in order to implement the spirit of the No. 1 Central Document in 2020, with the approval of the State Council, the cotton target price policy will be improved in Xinjiang from 2020. The target price level is 18,600 yuan per ton, and will be evaluated every three years. The target will be adjusted based on the evaluation results as appropriate. price level.
Currently, Xinjiang and the mainland cotton-producing areas are in the critical period of spring sowing. The expected level of cotton prices will definitely determine farmers’ intention to plant cotton. Coupled with the role of the COVID-19 epidemic, At this time, the majority of cotton farmers have no bottom in their hearts. The country’s timely announcement and improvement of Xinjiang’s cotton target price policy is a reassurance for cotton farmers. At least my country’s cotton planting area will not decline significantly in the new year.
Wu Faxin, chief strategy officer of Shanghai Yarnbao Technology Co., Ltd., told the Futures Daily reporter that cotton is an important strategic material, and the issue of clothing and feeding our country’s 1.4 billion people must be controlled by us in China. In our own hands, we cannot be choked by foreign suppliers at the “critical moment”. Therefore, we continue to use “subsidy” methods to encourage farmers to grow cotton and maintain the basic cotton planting area in the main cotton-producing areas, which will help stabilize and protecting our country’s “cotton security.”
“Judging from the price of 18,600 yuan/ton, it is the same as the price of the previous three years. It has a positive effect on stabilizing the continuity of cotton prices and also gives a positive The signal is that the reform of my country’s cotton price system will follow the characteristics of my country’s market and embark on a path with “Chinese characteristics” that is in line with its own conditions.” Wu Faxin said that it can be expected that due to the country’s intervention to stabilize output and prices, the future of cotton prices in the next three years will be The cotton market supply is expected to be sufficient and price fluctuations are expected to stabilize, which will play a positive role in the balanced development of the upstream and downstream cotton industries. It is only hoped that the quality of cotton will be further improved based on the pilot projects in the first three years to meet the needs of downstream spinning mills for the production of high-end textiles.
Wu Faxin believes that in the actual operation of the “subsidy” policy, another key is the payment of “subsidy money” to cotton farmers, which needs to be more efficient and convenient to facilitate various aspects of cotton farmers. expenditure is required, so as to create a virtuous cycle for the entire cotton industry. Judging from the timing and content of the introduction of this cotton “subsidy” policy, this year’s “subsidy policy” may cause oscillations in market prices in the short term, but in the long term, it will definitely be beneficial to my country’s cotton industry and “cotton” – Long-term stability and sound and healthy development of the upstream and downstream industrial chain of “Textile”.
What are the key factors that determine the rise and fall of cotton prices?
“The main 2005 contract price of Zheng cotton closed at about 10,650 yuan/ton yesterday, which is a difference of about 8,000 yuan/ton compared with the Xinjiang cotton target price of 18,600 yuan/ton. Today The price of cotton futures is not allowed to rise at the opening price?” After the national policy of improving the target price of Xinjiang cotton was announced, many investors who did not fully understand the operating mechanism of my country’s cotton market put forward their own opinions. In fact, the state’s policy of improving Xinjiang’s cotton target price is mainly related to cotton farmers, but has a relatively small direct impact on cotton prices. The target price is mainly to protect the income of cotton farmers from falling. It has little to do with the rise and fall of cotton market prices, but it will affect market psychology.
Some analysts believe that after cotton prices drop to historically low prices, it is definitely inappropriate to pursue a large number of shorts. There are two main reasons:
First, the cotton downstream industry has encountered unprecedented difficulties, and demand is unlikely to improve in the short term. The main reason is that the spread of the new coronavirus epidemic in the country has caused orders from downstream industry enterprises to instantly “wipe out”. Wu Faxin told reporters that according to statistics from relevant market agencies, as of March 26, the national cotton textile comprehensive operating rate was around 52.97%, down 2.18 percentage points from the previous month. For air-jet looms, the average operating rate was 55.24%, down 2 percentage points from the previous month. Weaving factories in various places have expressed their opinions to varying degrees, and have received notices from customers about postponement.Some companies are considering switching to the domestic trade market. If there are still no signs of improvement in the future, they will consider suspending production in a disadvantageous environment. In terms of circular knitting machines, the average operating rate was 50.69%, down 1.87 percentage points from the previous month. Due to the increasing financial pressure due to unsalable inventory of finished products, load reductions and holidays may increase in the later period.
Recently, as the COVID-19 epidemic continues to spread abroad, foreign trade companies or industries such as my country’s clothing exports have encountered many problems. During research in areas where textile companies are concentrated, such as Shandong, Jiangsu and Zhejiang, you can hear news about order cancellations, order suspensions and other unfavorable business operations everywhere. Some business leaders believe that if the COVID-19 epidemic is not over by June, I don’t know how many businesses will be unable to survive by then. At present, the biggest problem faced by domestic garment factories, yarn factories, fabric factories, etc. has changed from “worry about resuming work” to “worry about orders.”
It is understood that as Europe and the United States have become the hardest hit areas by the new coronavirus epidemic, my country’s foreign trade market has undergone a 180-degree change. From January to February, the COVID-19 epidemic in my country was severe and many factories were unable to produce. At this time, overseas customers were urgently pressing for orders. Now that the European and American consumer markets are heading towards a downturn, customers with demand have become cautious and have canceled or postponed orders from March to June. It is still difficult to judge the market situation after June.
Information released by the China Cotton Association shows that since March, the new coronavirus pneumonia epidemic has been contained in our country, but it has accelerated its spread around the world, with epidemics in Italy, Germany, the United States and other countries The increasingly serious situation has escalated market uneasiness and caused financial market turmoil. As the control level of foreign countries continues to strengthen and the epidemic panic continues to intensify, foreign textile orders in my country have been canceled in large numbers, disrupting the production rhythm of the entire industry that has just resumed. Some companies believe that the current lockdown measures in many countries may cause unnecessary panic among some foreign consumer groups about our products, and express concerns about future export trade. Regarding this situation, we must realize that the epidemic is temporary and phased. It will not change the general trend of high-quality development of our country’s economy, nor will it change the trend of high-quality development of our country’s foreign trade. The industry must strengthen its confidence and grasp the situation during the crisis. development opportunities.
It is also understood that considering the current development trend of the global new coronavirus epidemic, especially the high risk of imported epidemics from overseas, the 127th Spring Canton Fair will not be held as scheduled on April 15. . Next, Guangdong will comprehensively assess the epidemic situation and actively make suggestions to relevant national departments.
In addition, the United States’ heavy unemployment data soared to a record nearly five times. Last night, the much-anticipated initial jobless claims data was released. The number of people filing for unemployment benefits in the United States in the week of March 21 was 3.283 million, compared with expectations of 1.7 million and the previous value of 281,000. This is the first time in history that millions of initial jobless claims data have appeared, which is almost equivalent to 2% of the employed population in the United States. The previous record was 695,000 during the 1982 world economic crisis. This data also far exceeds the 667,000 during the financial crisis. . This week, the number of unemployed people in the United States has reached 9.7 times the peak of the 1987 stock market crash, 6.9 times the peak during the Internet bubble, and 4.9 times the peak during the 2008 financial crisis.
Second, in the long run, there is a supply gap in my country’s cotton market, which will cause domestic cotton prices to be closely linked to international market trends. The recent sharp and continued decline of US cotton has also caused domestic cotton prices to decline. An important reason why cotton prices once fell to the limit. Investors need to pay attention to changes in the international cotton market from time to time.
The General Administration of Customs of my country issued the “Announcement on Adjusting the Supervision Methods of Imported Cotton” yesterday. In order to further promote the reform of “delegating power, delegating power, delegating power, delegating power, delegating power and optimizing services”, further improving the port business environment, and enhancing the level of trade facilitation, the General Administration of Customs decided to optimize the quality inspection and supervision methods of imported cotton. The relevant matters are now announced as follows: First, the current sampling inspection of imported cotton by the customs on a batch-by-batch basis will be adjusted to be implemented based on the application of the enterprise; when necessary, the customs can implement supervision and inspection. Second, the imported cotton consignee or agent who needs the customs to issue a cotton quality certificate applies to the customs. After the imported cotton passes on-site inspection and quarantine, the customs will conduct on-site sampling, laboratory testing, and issue a quality certificate. Third, if the imported cotton consignee or agent does not require the customs to issue a cotton quality certificate, the customs will directly release the imported cotton after passing on-site inspection and quarantine. Effective from April 5, 2020. </p
