Long-staple cotton: External market drag, cotton prices continue to fall

Recently, long-staple cottonseed cotton has the following characteristics: small quantity. Industry estimates indicate that as of the end of December, about 90% of long-staple cotton purchases had been completed, and cotton farmers have only sold sporadically recently. Based on the current progress, it is estimated that the acquisition will be completed in early January 2017; second, the quality has declined. Most of the cotton in the hands of remaining cotton farmers is blooming after frost or snow. It is not mature enough, has short fiber, low horse value and many impurities. According to reports from ginners, few companies are interested in newly harvested seed cotton when it is put on the market. Third, costs rise. On the 30th, the person in charge of a factory in Awati County said that at present, the price of long-staple cotton seeds is falling rapidly. On that day, the loading price was 2.37-2.38 yuan/kg, down 0.01 yuan/kg from yesterday. Since this week, the cumulative Down 0.05 yuan/kg. In addition, manufacturers need to add more labor to sort out long-staple cotton, such as picking “three yarns” and sorting, which increases the cost of long-staple cotton.

“Now we are harvesting more and losing more, so many companies have stopped harvesting.” On the 30th, the person in charge of a company in Avati said that the recent decline in long-staple cotton prices is due to various reasons. ：

　1. The external market has turned from strong to weak, and long-staple cotton has been affected. Recently, the price of fine velvet cotton has fluctuated greatly, with the spot market falling by 200-300 yuan/ton this week. Taking Xinjiang hand-picked cotton as an example, on the 30th, the prices of “Double 28” and “Double 29” in Shandong, Jiangsu and other places were 16,200-16,300 yuan/ton.

As of now, the price difference between long-staple cotton and fine-staple cotton is around 5,000 yuan/ton. It is understood that since this year, the price difference between long-staple cotton and fine-staple cotton has remained at 5,000-6,000 yuan/ton. Therefore, most long-staple cotton and fine-staple cotton resonate with the same wave. Fine-staple cotton fell, and long-staple cotton followed suit.

　2. Sufficient supply in the mainland market. As the export of fruits and chemical products from Xinjiang comes to an end, the export of cotton from Xinjiang is accelerating. According to feedback from many mainland companies, the supply of long-staple cotton in the mainland has been sufficient recently, and it can be obtained basically everywhere.

　3. The demand for combed high-count yarn is weak. Recently, the market for combed yarn has been weak. Fabric companies said that current orders are still mainly from old customers, and orders from old customers are also on a downward trend.

In summary, the long-staple cotton market is prone to falling but difficult to rise in the short term, but a sharp drop is unlikely. The main thing is cost support. At present, the basic cost of long-staple cotton is upside down, and companies are also more willing to raise prices.

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