Cotton is coming out, Tranquility and Zhiyuan treat reserve cotton
Correspondent from China Cotton Network: With the rotation of reserve cotton in 2016/2017, the transaction price, transaction quantity and the number of unsold auctions, etc., All have become topics of concern and hot discussion in the industry. In the exchanges with some leaders of cotton-using and cotton-operating enterprises, a basic consensus was reached that we should have a long-term attitude towards the rotation of cotton reserves.
The state is implementing market-oriented cotton operations, target price subsidy policies and rotation of cotton reserves, which not only achieves the “destocking” of cotton resources, but also ensures effective supply for cotton operations and fabric companies.
More than two years of practice have greatly eliminated the demand contradiction caused by resource supply in the cotton market, and also directly and effectively stabilized the cotton market price. We can fully understand that under the guidance of national macro policies, enterprises can choose what they need through market-based cotton transactions in the form of market transactions and based on their actual operating conditions, without worrying about resource shortages or shortages. Don’t be afraid of the price “roller coaster”. As the saying goes, days pass by and the market opens every day. Enterprises can completely organize production and operation activities in the standardized operation of round-robin transactions, so that the fluctuations and changes in the market are like the breeze blowing on the lake, which is a trading choice. Market-oriented performance in the market, trust can be adapted and accepted by most production and operation enterprises.
At the beginning of the cotton reserve rotation, the relevant departments announced a series of rotation transaction details. The quantity and time of the rotation seemed to give enterprises a “reassurance”, and enterprises did not have to worry about raw material issues at all. It is precisely because of such new policy arrangements that many companies have full confidence in the entire round, and are not worried about the “stretch” of resources, nor do they have to “go into battle naked” to compete for a piece of the pie. Recently, the reserve cotton rotation market has seen declining transaction prices, fluctuations in daily transactions, and even unsold auctions. After communicating with some people from textile companies, I am not surprised by these performances. From the overall situation, although the fabric market is not that tired, structural changes are still insufficient. At present, there are still some small and medium-sized textile enterprises whose raw materials are composed of mainland cotton produced in the previous year, cotton traded in the previous year, Xinjiang cotton, etc. Some of them have not yet been listed to compete for the 2016/2017 reserve cotton. These companies said that future corporate listings and auctions are inevitable, but only a matter of time. In the face of the market, enterprises will still live within their means, focus on price over quantity, and decide the direction of purchase based on comparative benefits. Therefore, cotton reserves, cotton stocks in the market, Xinjiang cotton, and imported cotton will be like commodities on display racks, providing a basis for enterprises. Take a look at the selection, the one with high quality and low price will naturally win!
Thirdly, under the adjustment of economic structure and development speed, the industry will not reproduce the “roller coaster” that fluctuates up and down.
Faced with the cotton market with multiple structures such as “2016/2017 cotton reserve rotation, market storage cotton, Xinjiang cotton, imported cotton”, today’s industry is more rational than hasty. Before the reserve cotton is released, the industry has been expecting and applauding it, but there is no price concern. Now, the transaction price of reserve cotton has changed significantly compared with that in early March, which shows that all supply and demand relationships in the market will be reflected calmly and realistically, and the market will eventually realize the true value of the commodity within a range trend in which interests are roughly balanced.
We can also look at the recent cotton futures, spot prices, Xinjiang cotton price trends, and the supply situation of cotton yarn and the entire fabric market. The entire cotton-related market is not enough to support the cotton price. Any factors that can cause ups and downs. Whether the textile market changes due to the cotton market, or the cotton market changes due to the textile market, everything depends on the evolution of supply and demand to realize the value realization of cotton, cotton yarn and then cotton textile products. The upward speed of the country and even the economy continues to expand. Under the situation of slowdown, it is already everyone’s aspiration to keep social and economic growth from going negative or reversing, and with millions of tons of reserve cotton resources for six months entering the market, cotton and textile companies can completely Climb high and look far, operate with concentration, and explore the market through more measures to tap potential and increase efficiency to capture the benefits that belong to the enterprise.
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