Public opinion cotton: bad cotton gathered in Zhengzhou

Cotton is currently protected by the purchase price of the State Reserve, which is for the purpose of increasing the enthusiasm of cotton farmers for planting and safeguarding the market supply demand for the new year. In the context of relatively loose supply and weaker external demand, the higher cotton price still depends on the effective start-up of domestic demand and the recovery of the global economy.

Premier Wen stressed that the policy on real estate control has not been relaxed, resulting in a rise in negative sentiment in the market and an overall plunging commodity market. The Indian government lifted the ban on cotton exports on March 12th, the US Department of Agriculture’s report on cotton supply and demand in March was bad, the domestic textile and apparel exports declined significantly in February, and other bad sales gathered. Although Zheng cotton has a support price of RMB 20,400/t, the market outlook Worrying.

The pattern of weak cotton remains unchanged In the first half of March, the cotton export policy of the country was changed overnight, exacerbating the volatility of the cotton market. Since the second half of 2011, the number of domestic cotton imports from India has increased significantly. India has surpassed the United States as the largest source of Chinese cotton imports. On March 12, the Indian government lifted the ban on cotton exports. Zheng Cotton then turned around and the main contract was suppressed by the moving average. In general, the pattern of Zheng cotton weakness remains unchanged.

Supply pressures highlighted the recent suppression of the cotton market. The US March supply and demand report significantly increased China's cotton ending stocks in 2011/2012 by 435,000 tons, imports increased by 327,000 tons, and consumption was lowered by 109,000 tons. Production forecast is maintained at 7.29 million tons. The supply and demand report was bearish, and the pressure of oversupply in the market further increased. At the same time, Morgan Stanley lowered its 2011/2012 cotton price estimate from US$1 per pound to 90 cents, mainly due to weak market demand. Zheng cotton oscillated upward since the end of last year, mainly due to the support of the purchase price of the State Reserve, and the new year's closing storage price increased by 600 yuan / ton, but also locked down the cotton price downside. However, in the context of apparent oversupply pressure, Zheng Cotton's upside is inhibited.

Decline in textile exports, weak growth in cotton The current market gradually entered the new cotton sowing period, the previous period the country increased the price of storage and storage to 20,400 yuan / ton, more to improve cotton farmers enthusiasm for cotton and protect the market for the next year the purpose of cotton. However, the decline in demand for domestic textile imports after the declining US debt and European debt economy is still in effect. According to customs data, in February, domestic exports of textiles and garments were approximately US$ 9.712 billion, which was a decrease of 7.01% year-on-year and a decrease of 54.87% compared with the previous quarter. The decline in textile and apparel exports has been significant, which has inhibited the downstream demand for cotton.

Although the reserve requirement ratio has been lowered again, and the market is expected to loosen monetary policy during the period of **, it is generally optimistic. At present, the fundamental factor that restrains the rise of cotton prices is the reduction of domestic and foreign market demand. Although domestic demand can be expanded through monetary policy adjustment and market stimulus, external demand is not directly affected by domestic monetary policy. Before and after the apparent improvement in domestic and foreign demand, although the purchase price of cotton in the State Reserve has been rising, but there is no basis for the surge. Once the goods market has a bad signal, the weak trend of cotton prices will still appear.

In summary, the ** forecast for economic growth this year is reduced to 7.5%, indicating that the focus of commodity prices will be reduced. Cotton is currently protected by the purchase price of the State Reserve, which is for the purpose of increasing the enthusiasm of cotton farmers for planting and safeguarding the market supply demand for the new year. In the context of more relaxed supply and weaker external demand, higher cotton prices still depend on the effective start-up of domestic demand and the recovery of the global economy. Under the pressure of short-term accumulation of negative factors at home and abroad, the outlook for Zheng cotton is worrying.