Us Adjust Cotton Stocks, China Will Reconsider Purchase And Storage Policy

The US Department of Agriculture issued a monthly report Wednesday, saying that by the end of the 2013/14 crop, the United States cotton Inventories will fall to their lowest level in three years, and the US Department of agriculture has lowered its US production forecast, which is lower than expected in the industry. The expected reduction is due to the huge demand for cotton imports in the world's largest textile market, and the tight global supply outside China. The US Department of agriculture also lowered its global inventory expectations for the July 2014 crop year, which still represents a record high, exceeding the industry's expectations. In this regard, the industry pointed out that domestic and foreign cotton prices continue to hang upside down, domestic cotton prices even higher than the price of international cotton yarn products, so that the cotton textile industry business difficulties intensified, the export market seriously frustrated, tight corporate capital chain will also drag on the pace of upgrading and transformation of enterprises.

The US Department of Agriculture said in its report this month that by the end of July 2014, the United States will hold 2 million 600 thousand bales of cotton (4 million 800 thousand packs), which will be the lowest level since the 2010/11 crop year. The US Department of Agriculture said Wednesday that the largest cotton exporter will produce 13 million 500 thousand bales of cotton next year, less than its forecast of 14 million packages in May. The US cotton spot market shows that it is based on official standards, net weights and mixed batches. The price of upland cotton is FOB motor vehicle delivery, including compression and brokerage costs. The price of American Pima cotton is FOB warehouse, including the cost of compression. Basic standard for Upland Cotton: chroma 41, mixed leaf chip grade 4, fiber 34 (1.05-1.07), micron value 3.5,3.6 and 4.4-4.9, strong 26.5-28.4 g / tex, uniformity 80.5- 81.4.

Cotton Cooperation Organization Cotton merchant The median figure predicted by analysts is about 14 million packs, while the US Department of agriculture is below the industry's expectations. Knight futures cotton expert Sharon Johnson said that the US cotton figures, especially the new cotton, are friendly, if not good. Next year, global inventories will reach 92 million 490 thousand packages, though the US Department of agriculture forecast a slight reduction of 92 million 740 thousand packages in May. The government forecast that the carry over inventory is larger than the 88 million 900 thousand package predicted by the industry. The US Department of Agriculture said that more than 2/3 of the global carry over inventory is expected to become part of China's inventory. By the end of July 2014, China's total inventory will reach 58 million 930 thousand packages. Since 2011, Beijing has implemented the purchasing and storage plan, which has a higher price than the global price, which is aimed at supporting farmers.

In recent years, China has said that it is reconsidering the policy of purchasing and storage, because China's textile mills are troubled by high priced cotton in China. Although domestic cotton supply is still adequate, many cotton spinning enterprises can only shrink from the high price of cotton at home and abroad. US cotton has been boosted by China's buying, and domestic cotton spot prices have continued to weaken, and the cotton price has been oscillating for a short period of time. Technically, the Zheng cotton 1401 contract was affected by the market shift, and the volume was increased by 20 thousand yuan / ton. The price reached a new high of nearly 2 months. But the head of the bulls is not firm enough, short term or oscillatory. Operation, in the 19800-20500 yuan / ton large interval of high and low suction.

Last year, cotton in China Spin The overall difficulties of enterprises are intensifying. Many enterprises are trying to make transformation and upgrading. They have made great efforts in technology, products and management, and have invested a lot. But transformation requires capital, and funds tied to high priced cotton are difficult for enterprises to transform. Although the textile industry has been affected, it has not been hurt. Therefore, both enterprises and government departments should establish confidence, strategic thinking and overall concept, and seek development in difficulties. At the recent China International Cotton Conference, Liu Xiaonan, deputy director of the national development and Reform Commission, said that the new cotton standard will be implemented in the new cotton year, and there will be new standards for the purchase and storage. The new price difference and pricing method will also be announced as soon as possible.