Cotton prices rise Cotton farmers' psychological price keeps rising and reluctant to sell cotton

Recently, the author interviewed and interviewed three major cotton producing areas in Changde, Yiyang, and Yueyang in Hunan, and combined with the situation provided by the Hunan Provincial Supply and Marketing Cooperatives, found that this year the province’s cotton planting area increased, overall production increased, quality improved, and the price was high. Operation, but there are also five issues that cannot be ignored in the acquisition.

The first is a large excess of processing capacity. At present, only Hunan province has 58 type balers, 58 200 type balers, and 500 to 600 small individual roll mills. Due to the high price of cotton this year, it is expected that the number of roller gins to be banned by the country will rebound sharply and the overall processing capacity will reach more than three times the actual demand.

Second, reluctant sellers of cotton farmers will prevail. According to the investigation, the current cotton farmers' expectation value for cotton prices is relatively high, which is generally above RMB 4/kg. Since the price of cotton has been on the rise since the previous year, cotton farmers continue to be bullish, and the psychological price continues to rise. In fact, the current cotton price is already at historically high levels. If the weather is fine in the later period and the cotton production is relatively large, the cotton price may fall back, and there is a big gap with the cotton farmers' expectation. The cotton farmers will appear to be reluctant to sell.

Third, the funding gap will increase significantly. This year, Hunan's total cotton output will reach more than 6 million, and the acquisition price will continue to rise. It is expected that the province will need about 7 billion yuan to purchase cotton, and the funding gap will increase significantly.

Fourth, the uncertainty of climate in the later period has increased. Due to the fact that Hunan's cotton planting this year is about 10 days later than in previous years, the growth period has been postponed. At present, cotton is dominated by autumn peaches, and there is basically no top peach. Therefore, the weather in the latter part will play a crucial role in cotton production. When the weather is fine in the later period, the cotton quality is good and the output is high; if continuous rainy weather occurs, the cotton quality and yield will be seriously affected.