资讯 1 10 英文网 297 Monthly 590641 CNCotton Monthly Report (Dec) 2019-12-23 08:59:01 yangfang
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CNCotton Monthly Report (Dec)
2019-12-23

According to data of national cotton market monitoring system, China’s cotton output in 2019/20 was 5.843 million tons, a year-on-year decrease of 4.29%, and the consumption was 7.5889 million tons, a year-on-year decrease of 5.0%, the gap between output and demand was 1.7459 million tons, narrowing 137,400 tons compared to the previous year. After December, with the volume that northern hemisphere new cotton is sold in the market reaches a high level, consumption is weak, and supply and demand relationship is expected to balance loose in short term. 

  

The conduction momentum of the cotton textile industry chain is insufficient, and the continuous growth momentum of the cotton price is insufficient. After October 2019, the atmosphere that the optimistic expectations of Sino-US trade negotiations driving the cotton textile market recovers slightly, but the conduction of the industrial chain is not smooth, and sales of downstream textile market is obviously worse compared to the previous years. As of December 17, prices of Zhengzhou cotton futures rose by 10.14% compared to the beginning of October, lint spot prices rose by 5.32%, the growth rate of cotton yarn was only 0.62% and cotton cloth fell by 1.84%. Price difference between yarn cotton and yarn cloth narrows and enterprises’ profit decreases.  According to data from the National Bureau of Statistics, the total profit of textile enterprises above a certain scale in the January to October period fell by 6.4% year on year. It is close to the end of the year, enterprises increase their efforts to reduce yarn and cloth prices to refund. According to the survey of national cotton market monitoring system, at the beginning of the December, yarn production and sales ratio of the sampled investigated enterprises decreased by 0.8 percentage points month-on-month, and the inventory of pure cotton cloth was 13.3 days higher than the average level of the same period in the past three years. Textile enterprises slow down their purchase process. At the beginning of December, the proportion of enterprises preparing to purchase cotton declined by 4.9 percentage points month-on-month. In the later period, as the end of the year approaches, the spot market will begin to take holiday before the Spring Festival, and the futures market risk is still relatively large. As of December 17, 2019, Zhengzhou cotton main contract bilateral holdings were 718,800 and the number of warehouse receipts reached 967,500 tons, reaching the historical high value, and hedging companies should be aware of the risk of speculation in off-site funds. 

 

The year of 2019 is the last year for the implementation of the cotton target price in Xinjiang, China, it is unclear how the policy will be formulated, and cotton farmers are in a wait-and-see state. According to a preliminary survey by the national cotton market monitoring system, cotton planting area in Xinjiang is expected to reach 34.9266 million mu, down 1.1% compared to 2019, up 1.03% compared to 2018. In view of the support to cotton production from the subsidy policies of each major cotton producer country, the overall cotton planting intention in the next year is likely to be stable and slightly narrow, and the final cotton planting area will also be affected by the trend of cotton prices in the next stage.