Lint Price Quotation Bottoms Up, Farmland Contract Polarization

According to the survey, in recent days, ICE futures and Zhengzhou futures bottomed out, 2014/15 high grade cotton supply has been gradually tense, plus part of the southern Xinjiang cotton processing enterprises have been effectively relieved by the pressure of centralized selling, and the quotation of hand picked cotton in the southern Xinjiang is still at a steady state.

Quotations rebounded 100-200 yuan / ton, but whether cotton mills or operators can be recognized and purchased still need time to change space.

On the 23-24 th of March, the gross weight quotations of hand picked cotton at 3128 and 2128 (2129) grade in the southern Shandong, Henan, Hebei, Jiangsu and Zhejiang provinces were concentrated at 13800-14000 yuan / ton / ton, 14100-14200 yuan / ton, and the quotations of two grade cotton with "three silk" and "better quality" were priced at about 14300 yuan / ton, rebounding 50-100 yuan / ton compared with mid March.

However, the price of the 3128 class cotton picking warehouse in the mainland is still 12800-13200 yuan / ton, and cotton enterprises and traders also have the desire to raise their quotations in the short term.

According to rumor, a large textile enterprise in Shandong signed a contract to purchase 50 thousand tons of cotton harvester.

Recently,

In most villages and towns, the auction of land contracts started in full swing. Farmers reflected that the price of the package land was reduced by 100-200 yuan / mu compared with 2013 and 2014.

Outside (contract price is 700-800 yuan / mu), sand land and water inconvenient farmland appear racket. Farmers have higher enthusiasm for planting long staple cotton, spring wheat, red dates, tomato and spicy pepper.

Agricultural distributors in Akesu, Bachu, Shache and other places reflected that this year farmers' purchase of fertilizers, plastic films, seeds, pesticides and other credit problems were more serious than in previous years. Some dealers considered possible plans to suspend sales of agricultural products after taking back agricultural credits in 2014.

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Recently, Xinjiang issued the circular on conscientiously doing a good job in the reduction of planting area in Xinjiang.

As soon as the news came out, cotton and cotton spinning enterprises immediately attracted great attention.

Because Xinjiang's cotton output accounts for half of the total output of the country, if its production is greatly reduced, it will have an impact on the domestic cotton market.

For a long time, Xinjiang cotton has taken the first place in terms of planting area, total output and commodity allocation. The cotton planting reduction work led by the Xinjiang Autonomous Region government aims at scientifically guiding cotton farmers to gradually withdraw from the sub suitable cotton area, the risk cotton area and the low yield cotton area, which will lead to a significant decline in cotton production in China.

This time, Xinjiang reduced cotton planting area far beyond market expectations.

According to statistics, in 2015, Xinjiang issued a task decomposition index for 13 cotton planting prefectures. The plan was pferred from last year's 29 million 670 thousand mu to 25 million mu, and the scale reduced to 15.72%.

It is estimated that cotton production in Xinjiang reached 3 million 533 thousand tons in 2015/2016, a decrease of 767 thousand tons compared with the previous year and a decrease of 17.83%.

And according to the production survey results in January, according to the output of 3 million 533 thousand tons in Xinjiang and the 1 million 580 thousand tons of cotton output in the mainland, the total output of cotton in 2015/2016 is 5 million 113 thousand tons.

From the perspective of supply, the domestic cotton market will enter a tight supply state assuming that the state treasury stock does not sell in 2015/2016 and the quota of imported cotton does not increase.

However, the improvement of supply and demand led by Xinjiang's cotton reduction needs to be actively coordinated by the downstream consumption side.

Since the second half of last year, the operation environment of cotton enterprises and textile enterprises has been worse. Domestic and foreign cotton price difference has maintained a high level for a long time, making textile enterprises difficult to survive, especially small and medium-sized enterprises.

At present, the domestic cotton textile enterprises are generally under construction, and the profits of the spinning mill have not improved significantly, and the purchasing and replenishment will is not strong.

Although Xinjiang cotton's active production reduction can reduce the expected supply of domestic cotton and ease the contradiction between supply and demand, we still need to observe the pulling effect on cotton price. After all, the downstream textile enterprise's operating environment has not been able to improve, which has restrained the recovery of demand power.

Insiders pointed out that only with supply and demand at both ends, can cotton prices be effectively and steadily strengthened.