Policy Adjustment Is The Focus Of Future Market

In order to improve the supply and demand pattern of the domestic cotton market and maintain the stable operation of cotton prices, five ministries and commissions, including the Development and Reform Commission and the Department of Finance of the Xinjiang Autonomous Region, jointly issued the Notice on Seriously Reducing Xinjiang's Planting Area (hereinafter referred to as the Notice). The Notice, to some extent, lowered the expectation of cotton production in the new year, and clearly proposed the goals for the new year Direct subsidy price It will be lower than last year, and guide cotton farmers to see the situation of the cotton market, reduce cotton planting and switch to other crops. In this regard, the decline of cotton planting area in Xinjiang in 2015 may be inevitable.

In addition, due to this year's mainland cotton Without the support of purchase and storage, the sales price dropped significantly compared with last year, and the enthusiasm of cotton farmers declined significantly. According to data, the cotton planting area in the mainland is expected to decline by more than one-third. Direct subsidy policy The degree of support will directly affect the planting intention of cotton farmers and the new cotton yield. At present, it is generally believed in the market that there are more than 10 million tons of cotton in the national reserve, which may be the consumption of domestic cotton for more than a year and a half. Therefore, whether the country will auction and store cotton after March is also the focus of the market.

The author believes that the selling of reserve cotton needs to meet the situation that domestic cotton is in short supply, so whether to sell or not to sell should depend on the progress of domestic cotton consumption, which will inevitably lead to the rise of cotton prices. If the current weak pattern is maintained, reserve cotton should wait quietly, but if an accident occurs, it is another matter.

To sum up, cotton procurement is not active at present, and the warming of downstream consumption remains to be observed. As the situation of oversupply still exists, there is no room for cotton prices to rise significantly. Similarly, due to the domestic cotton cost support and continuous consumption, under the circumstances that Xinjiang Production and Construction Corps cotton does not continue to reduce prices and the cotton prices in the mainland do not decline significantly, Zheng cotton prices generally maintain an oscillatory trend, and later pay attention to the impact of policies on cotton market expectations and changes in phased supply and demand.

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