This year’s first batch of central reserve cotton is coming to an end! There are still many variables in the later market
China Cotton Reserve Management Co., Ltd. recently issued an announcement stating that according to notifications from relevant national departments, the first batch of central reserve cotton rotation in 2022 will be due on November 11, 2022. The follow-up will be based on the needs of cotton market regulation and control. According to the new cotton acquisition situation, we will choose the opportunity to start the second batch of central reserve cotton rotation.
On July 13 this year, the first batch of central reserve cotton was launched, with a quantity of 300,000-500,000 tons. The purchase and storage price is the arithmetic average of the Chinese cotton price index and the national cotton price index. At that time, this provided certain support and boost to the continued decline in domestic cotton prices and sluggish market sentiment. However, domestic and foreign cotton prices continued to decline subsequently, and purchasing and stockpiling progressed tepidly.
It is understood that the market has previously reported that the first batch of central reserve cotton imports this year will stop. The market generally believes that the negative factors “boots have landed”, and domestic cotton prices have risen steadily.
“In fact, the early decline in cotton prices at home and abroad has a lot to do with sluggish demand. The purchase and storage of up to 500,000 tons will not have a major impact on cotton prices, let alone determine the rise or fall of cotton prices.” Yu Yu Yang Yong, general manager of An Cotton Trading Company, told the Futures Daily reporter that from the nature of the industry, cotton is a weak demand variety, and more time needs to be analyzed on the supply side to judge market price trends. If there are no problems on the cotton supply side, the excessively high cotton prices will definitely be unsustainable. The early decline in cotton prices has a lot to do with the increase in cotton production in the new season.
According to the reporter’s understanding, as of now, the domestic new cotton picking work has basically ended. lint processing and listing are at the peak period, but new cotton is sold, stored, and Public inspection, warehouse delivery, transportation and other links have been affected by the epidemic. It is difficult to effectively increase the amount of Xinjiang cotton entering the market, and it is also more difficult for mainland textile companies to purchase cotton raw materials. Market participants expect that there will still be many variables in the domestic and foreign cotton markets, and it is recommended that spot traders and futures traders enter the market with caution and pay attention to risk management and control.
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