Cotton: Consumption Downturn Will Continue

On the 4 day, the Cotton Subsidy Policy of 9 provinces in the mainland finally fell to dust. The subsidy standard was 2000 yuan / ton, and the enthusiasm of cotton growers in the mainland of China is expected to increase substantially. This will directly increase the supply of cotton market and form pressure on Zheng cotton.

　　 Textile consumption is still not optimistic.

According to WIND's latest statistics, in September 2014, the added value of textile industry increased by 5.3% over the same period last year, slowing by 0.4 percentage points from the previous month. Looking back on the trend of China's textile industry added value in the past three years, the trend has been downward since the beginning of 2012, but gradually slowed down from the decline in the growth rate.

according to Customs According to data from the General Administration, in September 2014, China's textile and clothing exports amounted to US $28 billion 550 million, an increase of 7.4% over the same period last year, down 1.49 percentage points from the previous month. The growth rate of the textile industry was -6.49%, down 7.1 percentage points from the previous month. From 1 to September 2014, the total export volume of textiles and clothing in China increased by US $221 billion 930 million, an increase of 5.92% over the same period last year, and the growth rate dropped 6.03 percentage points over the same period last year.

　　 Narrowing of domestic and foreign cotton prices

In the year of 2014/2015, because of the implementation of direct subsidy policy, the price of zhengmian shifted downward obviously, and the difference between domestic and foreign cotton prices was narrowed again, especially the price difference under sliding tax. According to statistics, as of November 5th, the price difference between home and abroad under the sliding tax is 982 yuan / ton, 1% tariff quota. A discount The price difference is 3307 yuan / ton.

Under the guidance of China's cotton import quota tightening policy, it is expected that the cotton price difference will continue to narrow at the later stage and will restrict the running range of the cotton price.

　　 High inventory restricts uplink of cotton prices

According to the latest global cotton supply and demand data from the US Department of agriculture (USDA), the supply volume of the global cotton market in will be further narrowed than that in 2013/2014, and the supply and demand will change in a favorable direction. However, the overall supply is still oversupply, with an excess of 1 million 239 thousand tons, far below the 2 million 436 thousand tons in 2013/2014. However, global inventory data in 2014/2015 increased steeply all the way, even if China's inventory data were available. Eliminate The expected final inventory and inventory consumption data for 2014/2015 will remain high.

In China, according to the data predicted by USDA, the supply and demand pattern of cotton in 2014/2015 is still showing an excess supply pattern, but the surplus has narrowed down from 2 million 694 thousand tons in 2013/2014 to a shortage of 109 thousand tons. In terms of end inventory, although 2014/2015 has been reduced by 120 thousand tons over the previous year, it is still a huge volume of 13 million 533 thousand tons, far exceeding cotton consumption in one year. Based on the data of China's cotton reserves in recent years, China's cotton reserve stock is estimated at 9 million 376 thousand tons, which is enough to meet the cotton consumption demand in 2014/2015. Therefore, high inventory will continue to restrict the uplink of China's cotton price operation.

It is expected that new cotton will be listed in large quantities in November, and the supply will increase significantly.