On March 1, China Cotton Reserve Company issued an announcement that according to the reserve cotton rotation rules, when the price difference between domestic and foreign cotton exceeds 800 yuan/ton for three consecutive days, Xinjiang cotton rotation will be suspended. When cotton prices at home and abroad resonate sharply downward, what impact will the suspension of cotton reserve rotation have on the cotton market?
It is understood that there are generally two views in the market regarding the suspension of Xinjiang cotton imports on Monday. One is that there is a lack of price support for purchasing and storage, and market psychological expectations will be hit; the other is that cotton prices are high internally and low externally. , will make the market judge that it will force the price of domestic cotton to fall and the price of foreign cotton to move closer. This means that the current cotton price still has room to fall, and even the decline is not small.
Those who support the above point of view believe that the suspension of Xinjiang cotton rotation will have a negative impact on ginners and traders whose sales are currently slowing down, because when the market price drops sharply, the purchase and storage price advantage appears, and the delivery volume There was a significant increase. After the purchase and storage was stopped, cotton spot resources were abundant, and the sales slowdown led to lower prices.
Of course, in addition to the negative impact, some people believe that it will have a positive impact on cotton downstream companies. The price difference between domestic and foreign cotton has expanded to more than 800 yuan/ton, the competitiveness of domestic cotton has weakened, and the cost of textile and clothing products has increased. Especially now that the demand for epidemic prevention and control is weak, cost control is even more important. When the price difference between domestic and foreign cotton exceeds an unreasonable range, stopping purchase and storage will avoid domestic price distortion, which will help keep domestic and foreign cotton prices within a reasonable range and enhance the international competitiveness of cotton spinning products.
Judging from today’s domestic and foreign futures market reflections, bulk commodities have rebounded, and cotton has also increased significantly. The global market’s panic over the epidemic has temporarily come to an end. The rebound rate of US cotton ICE is higher than that of Zheng cotton. The price difference will be narrowed. Pay attention to the subsequent trend of domestic and foreign cotton price differences and the potential impact on the market. </p
