National policy adjustment

National policy adjustment

Since the beginning of this year, the price of cotton has been falling steadily. The main force of ICE cotton fell from 73.30 cents in early July to 64.53 cents on July 30, and fell by 8.77 cents during the month. The drop continued to hit an annual high. The US dollar quotation of the main port free zone was successively lowered. On the 30th, the quotations of US cotton EMOT SM, Indian cotton S-6 and West Africa cotton were lowered by 300-500 yuan/ton compared with the beginning of this month.

In this year's downward trend in cotton prices, cotton traders are still in the "winter". "Large losses and small losses." Mr. Huang, who does import and export trade in Qingdao, said that many times this year, cotton has not yet arrived in Hong Kong and it has already happened. For example, the current purchase price of New Australian cotton in Hong Kong is mostly 96-105 cents, but it can only sell 90-95 cents after arriving in Hong Kong. Compared to fine cotton, long-staple cotton lost more "terrorist." Mr. Huang said that at present, there are more than 720 tons of Xinjiang long-staple cotton in their warehouses. The current cost has reached 35,500 yuan/ton (137), but the current market price is 29,500 yuan/ton and the loss is up to 6,000 yuan/ton. It is understood that because the business is difficult to do, this year the port trading company withered, some people are still holding goods "struggle", and some companies have already done his job.

Market participants believe that the root cause of this year's poor trade in cotton is the adjustment of national policies. Firstly, the reserve price for throwing stocks was lowered from 18,000 yuan/ton to 17,250 yuan/ton in April, and the domestic cotton price has dropped sharply. Second, the policy of direct supplementation of cotton in Xinjiang, the market for the future cotton price estimates generally fell below 16,000 yuan / ton, the domestic cotton price again "collapse." As the saying goes, chances and risks always follow each other. Will traders in the next year usher in new opportunities?

"In theory, cotton sales are relatively easy to do, and prices may also be relatively strong." A trader said that the end of the August 31 round of throwing storage is expected to be a large number of new cotton in mid-October, at least 40-50 days of cotton supply "The open period" is an opportunity for traders. Coupled with the fact that textile companies generally maintain low inventory, demand is also expected to expand. However, this 40-50 days is a period of transition from the price of domestic cotton to the market price, which is full of uncertainty. During this period, the new and old cotton prices are to be completed and the new cotton price is expected to drop sharply, which is full of challenges for traders. As for how to operate after the dumping is completed, traders are tangled up.

It is understood that traders mainly have four different options. First, less inventory and careful operation. This is mainly a number of smaller companies, they said they are not stocked, there are customers to the goods to the market to find the goods, there is a difference to do it, to minimize risk. The second is to lock in customers and be careful about participation. Some large and medium-sized traders have relatively fixed customers. To guarantee the basic supply of customers, certain cotton must be stocked, but customers and products are locked in advance, and blind stocks are not included. The third is to seize the opportunity to gamble. Some of the more powerful traders think that opportunities are coming. They plan to expand their stocks and “fish for one” at the handover between the new and old years. Fourth, take a wait-and-see attitude or switch to Xinjiang’s acquisition.

The reporter believes that the alternating old and new years, the probability of a large drop in the price of cotton, for traders, controlling risk is more important than earning profits. Even if price increases due to tight supply within a short period of time, the duration will not be too long. Therefore, it is wise to empty the high-priced cotton stock before the beginning of September. In the next fiscal year, the country still strictly controls quotas, so for traders, operations must also be carried out with "quantitative quotas."

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