China's cotton production has been basically determined. Factors such as reduced production and poor quality have increased the cotton gap in the new year, and the pattern of cotton consumption in short supply and dependence on imports has not changed.
The huge gap between supply and demand, the rigid growth of consumption and the high purchase price of lint have limited the room for domestic cotton prices to fall.
The way of issuing cotton import quotas and the policy orientation of the country to adjust the textile industry structure have prevented the sharp rise of cotton prices in the past six months.
In the long run, the abolition of cotton export subsidies in the United States will increase the overall focus of international cotton prices and promote the stable rise of world cotton prices.
The long-term existence of textile trade friction will only have a short-term impact on cotton prices, but it will add fuel to the flames.
Part I: Trend review.
Throughout 2005, cotton can be described as the "star variety" of agricultural products this year, which not only embodies the characteristics of large fluctuations in cotton prices, but also makes many cotton spot enterprises have to re-examine the important position of futures market in their production and operation; In addition, with the increasingly active cotton futures trading, the domestic cotton futures market has developed healthily and steadily, and its linkage with international cotton prices has become stronger and stronger, further promoting the closer connection between the futures market and the spot market.
In 2005, the price of cotton fluctuated frequently and greatly. From June to May, 2005, the price of cotton rose by 3305 yuan/ton, or 26.03%. In a short period of three months from May to August, the price of cotton fell by 1, 865,438+0.5 yuan/ton, a decrease of 1.34%. As of the press release date, Zheng Mian finally got rid of the weakness that 400 yuan/ton plunged in just one week in early February, and began to fluctuate upward. Below, the author mainly analyzes the recent hot issues in the cotton market from the perspective of fundamental analysis, in order to provide investors with more rational reference.
Part II: Basic analysis.
1. The global cotton output is relatively high, but the pattern of supply and demand is basically balanced, and consumer demand will be the dominant factor in the trend of cotton prices.
According to the latest forecast of USDA, the global cotton output in 2005/06 reached 24.448 million tons, the second highest in history, while the consumption is expected to be 25.005 million tons, and the global supply-demand gap is about 600,000 tons, and the supply-demand pattern is basically balanced. Combined with the "demand-oriented" characteristics of agricultural product prices, the leading factor of cotton price trend in the first half of 2006 will be cotton consumption demand.
2. The cotton output in China has been basically determined. Factors such as reduced production and poor quality have increased the cotton gap in the new year, and the pattern of cotton consumption in short supply and dependence on imports has not changed.
According to the global cotton supply and demand report of ICAC (International Cotton Advisory Committee) in June 5438+February, the cotton output in China in 2005 was 5.8 million tons, 9% less than the previous year, and the consumption will reach 9 million tons, accounting for 37% of the global total. At the same time, according to domestic data, the domestic sown area decreased by 12.4% in 2005/06, and the final domestic cotton output was 5.5 million tons, which decreased by 13%. In addition, due to the continuous rainy season in some cotton-producing areas this year, the cotton production is reduced and the quality is poor. The gap between cotton supply and demand will be more than 3.2 million tons this year, more than double that of last year. It can be seen that China's cotton consumption pattern with insufficient output and dependence on imports has not changed.
3. The huge gap between supply and demand, the rigid growth of consumption and the high purchase price of lint have limited the space for domestic cotton prices to fall.
China's strong textile and garment production drives the rigid growth of domestic cotton consumption demand. 1998/99, the cotton consumption in China was 4.3 million tons; By 2004/05, China's consumption had increased to 8.2 million tons, with an annual growth rate of about 10% (see the figure below). At the same time, with the increasingly relaxed international trade environment, China's cotton consumption is still growing rapidly in 2005. According to statistics, during the period of1-1in 2005, China's accumulated spinning volume was12,705,900 tons, an increase of 2.88 million tons, or 29.4%.
In addition, the average purchase price of seed cotton this year is around 2.9 yuan, which keeps the cost of lint warehouse receipts above 14300; Even if there is a price difference of more than RMB 1000 at home and abroad in the early stage, based on the benchmark price of quota allocation method released on 12 15 (the sliding duties threshold for the first batch of 894,000 tons of imported cotton is 5%), the port delivery price of general trade imported cotton is about RMB 13000/ton, plus other expenses such as
Therefore, under the comprehensive effect of the above factors, the space for domestic cotton prices to fall will be very limited.
4. The way of issuing cotton import quotas and the policy orientation of the country to adjust the textile industry structure will prevent the cotton price from rising sharply in the past six months.
According to the method of issuing tariff quotas for imported cotton in 2005/2006, imported cotton quotas will be issued in batches according to supply and demand. The first batch of 894,000 tons of quotas was issued before 65438+February 3 1, accounting for 27.9% of the annual supply-demand gap. It can be seen that if the domestic cotton price rises sharply, there will be enough cotton to balance supply and demand. Of course, this is the cotton planting area and output next year.
In addition, the continuous use of sliding quasi-tariff and the increase in the basic price of imported cotton this year indicate that our government hopes to optimize and upgrade the industrial structure of domestic textile enterprises through the cotton price mechanism, and then develop more healthily. Therefore, under the premise that the fundamentals of cotton supply and demand have not changed much, cotton prices will fluctuate in the past six months but will not rise sharply.
5. In the long run, the elimination of cotton export subsidies in the United States will raise the focus of international cotton prices as a whole and promote the steady rise of world cotton prices.
In recent years, under the huge subsidy of the US government to domestic cotton farmers and cotton exports, the export volume of cheap American cotton with strong market competitiveness accounts for more than 40% of the world cotton trade volume, thus keeping the international cotton price at a low level for a long time. With the conclusion of the Sixth Ministerial Conference of the World Trade Organization, which closed in Hong Kong on February 6, 2008, developed countries will cancel the export subsidies for cotton in 2006 and agricultural products before the end of April 38, 2065. In the long run, this will help to enhance the overall price center of international cotton.
6. The long-term existence of textile trade friction will only have a short-term impact on cotton prices, but it will add fuel to the flames.
2005 was a tortuous year for the trade environment of textile industry. It can be predicted that major textile importing countries, such as Europe and America, will continue to impose import restrictions on China's textiles through anti-dumping and other trade protection measures, while enjoying China's cheap textiles, for the sake of protecting their own textile industry and maintaining regional employment and social stability.
At the same time, China has initially formed a product export pattern focusing on expanding domestic demand, ensuring the market share in the surrounding areas, and striving to expand the European and American markets. With the continuous upgrading and rationalization of China's cotton industrial structure, the impact of trade friction and other policy factors on cotton prices will be limited to the short term, but it will play a role in fueling the situation.
Part III: Conclusion.
To sum up, the author believes that in the case of high global cotton production but basically balanced supply and demand, due to the huge gap between supply and demand of cotton in China, the rigid growth of consumer demand and the high cost of cotton, the space for cotton prices to fall will be very limited. It is expected that in early 2006, before the world cotton planting area is finalized next year, driven by consumer demand, there will be a shocking upward pattern. In addition, in view of the allocation of cotton import quotas and the policy orientation of the country to adjust the textile industry structure, the probability of a sharp increase in domestic cotton prices is small without major changes in fundamentals, and it is expected that cotton prices will remain in the range of 14500 ~ 16500 yuan/ton.