Recently, the circle of friends of Xinjiang cotton farmers has caused quite a stir. The reason is that various media have pushed a message that the opening price of Xinjiang cotton this year may be 6.5 yuan/kg.
On August 23, cotton farmers in the Yangtze River Basin cotton area began to pick and sell cotton, and individual ginning companies have also opened scales to purchase. According to on-site feedback on the purchase situation, the opening prices in the mainland this year are lower than last year.
Wang Lisheng of the Xinjiang Office believes that the current price of cottonseed is 1.8 yuan/kg, and shipping to Shandong plus shipping costs 2,400 yuan/ton. During the same period, the price of cottonseed is more than 2.0yuan/kg. If the cottonseed market is sluggish, it will be difficult for the price of cottonseed to rise. , predicting that the price of Xinjiang seed cotton will be 6.5 yuan/kg this year is a high probability event. After all, there are still many uncertain factors in the market. In addition, companies are not optimistic about the future market, especially under the expectation of increased domestic and foreign cotton production, there is a strong bearish atmosphere, and the price of Zheng cotton continues to run weakly. Affected by this, the expectation of a year-on-year decline in the opening scale price of Xinjiang cotton is further strengthened.
As the industry’s predicted price of Xinjiang cotton in the new year, this is the purchase price recognized and hoped for by most companies. However, it is a price that makes cotton farmers who have worked hard for a year sad.
Analysts believe that based on current market conditions, cotton companies believe that 7.0 yuan/kg is the dividing line for whether they can carry out acquisitions. If the price reaches and exceeds this figure, companies are likely to take measures to stop harvesting.
First, let’s calculate it. If the company purchases seed cotton at a price of 7.0 yuan/kg (40% lint cent, cottonseed price is temporarily 1.8 yuan/kg), then the cost price of lint cotton will reach 15,854-16,354 yuan/ton (lint processing fee is 1,000-1,000 yuan/kg). Calculated at RMB 1,500/ton). Is this price high?
On August 23, the average transaction price of real estate cotton was 13,854 yuan/ton, and the average transaction price of Xinjiang cotton was 15,121 yuan/ton. The price difference between real estate cotton, Xinjiang cotton and the calculated new cotton was more than 700 yuan/ton.
Futures market
On August 24, the CF1709 contract price was approximately 15,300 yuan/ton, which basically represents the market spot price. The price of the main contract CF1801 is 15,200 yuan/ton, and the far-month contract price is lower than the near-month contract price, which indicates that everyone is bearish on the future. Zheng’s cotton quilt industry is called the weathervane of cotton price trends. In this case, the cost price of 15,800 yuan/ton does pose a great risk.
Foreign cotton market
The price of the main ICE futures contract fluctuates between 66-72 cents/pound, equivalent to 11,200-12,200 yuan/ton. Amid expectations of increased global production, the price of the ICE far-month contract is also lower than the front-month contract. According to data from the National Cotton Market Monitoring System, the US cotton M 1-3/32″ grade is quoted at China’s main port at 13,287 yuan/ton, and the SM 1-1/8″ grade at China’s main port is quoted at 13,536 yuan/ton. In the international spot futures As the market continues to weaken, the price of domestic cotton has been weak, making it difficult for Zheng Mian to survive alone.
Of course, in addition to the above “grey rhinoceros” factors, there are also “black swans”. Although the probability that cotton seeds determine the trend of cotton prices is very small, it may have an adverse impact on seed cotton prices. Last year, the purchase price of cotton seeds in Xinjiang was generally above 2.0 yuan/kg. At the peak of purchase, it reached 2.6-2.8 yuan/kg, while the current price is 1.8 yuan/kg. The current price of cottonseed in the mainland is 1.2 yuan/jin, while the price in the same period last year was 1.6 yuan/jin. The price gap between the two is not small.
It is not yet possible to accurately predict the extent to which cottonseed, which accounts for 60% of the weight of seed cotton, will affect the price of seed cotton. However, one thing is certain, as long as cottonseed prices continue to be depressed, the possibility of seed cotton being dragged down will increase.
A business owner who has been purchasing and processing in Xinjiang for many years said: “As long as the price is lower than 7.0 yuan/kg, I dare to buy. Once the price is higher than this, I dare not buy anymore. After all, the risk is too great.” As for this year’s acquisition market, So far, all parties can only give predictions based on the current market conditions and the acquisition situation in the same period last year. The specific opening price and acquisition price of new cotton this year are still more wait-and-see predictions.
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