On September 27, driven by the rise in US cotton, domestic cotton prices rose sharply, and the main contract price of Zheng cotton hit a new high. In order to stabilize the cotton market, relevant state departments emphasized that the cotton market has risen too fast and has deviated from fundamentals, and market risks are increasing. Measures such as the continued arrangement of the release of central reserve cotton will be taken at any time according to the needs of the situation.
According to textile raw material purchasers, this round of cotton price increases is not driven by consumption, but is caused by upstream cotton harvests. The overall cotton price in the market this year is higher than last year. In order to seize cotton resources, Xinjiang’s open scale prices continue to hit new highs, and the cost of new flowers has reached 20,000 yuan/ton. Xinjiang already has excess cotton processing capacity, and ginning companies have increased their acquisition plans this year, making cotton resources even more scarce. Some companies that processed about 5,000 tons of lint last year plan to increase the processing volume to 8,000 tons this year, intensifying competition in the acquisition market. However, behind the competition are the accumulating market risks.
It is understood that the quality of Xinjiang cotton this year is better than last year. The current “Double 29” cotton price has reached more than 19,000 yuan/ton, and the Brazilian cotton port transaction price is also 19,000 yuan/ton. tons, the prices of the two are almost the same, which provides support for short-term cotton prices. Whether the market outlook can be stable depends on consumption.
A representative of a domestic textile company believes that the harvest of seed cotton will reach its peak in October, when cotton prices will reach their highest point. At present, the company’s raw material inventory is 2 months old, and orders have been received in November. The demand for cotton is good. The time when enterprises will use a large amount of new flowers will be in November. By then, all cotton will be high-cost, and there are doubts about whether the spinning industry can support it. The company also has yarn mills in Vietnam. Affected by the epidemic, the operating rate has remained at around 80%. Many companies in North Vietnam have low operating rates. However, as the epidemic is gradually controlled, the operating rate of companies has gradually increased, and there are signs of orders returning. </p
