The cotton market seems to be ushering in a new turning point

Since the climate conditions in 2016 were basically conducive to cotton growth, cotton production increased significantly compared with 2015. At the beginning of the new year, the cotton market seems to be ushering in a new turn. In the coming time, everyone will follow the editor to take a look at the detailed information.

ICE futures prices, which were stable a year ago, immediately jumped after New Year’s Day, kicking off a new round of rise. While the New Year’s Eve haze makes the New Year’s sky not clear, the “cotton market haze” that has been plagued by China’s high inventory for many years is gradually dissipating. Judging from the current situation, China’s cotton production and consumption will not increase significantly, so cotton imports are likely to increase on the current basis. If China’s imports really expand, other countries will have to increase production to meet China’s demand. In addition to yields, planting area may also increase, so cotton prices will need to rise.

Last week, the annual American Cotton Producing Region Conference was held in the United States, and a lot of positive and optimistic sentiments were revealed at the meeting. In American terms, although China’s inventory is still high, last year’s reserve cotton inventory was quickly digested. If Xinjiang’s fabric production goes as planned, it may not take too long for U.S. cotton production to make a comeback, and the market will be revitalized. With new vitality, there is great hope for U.S. cotton exports in the future, which is worth looking forward to.

According to a new survey by American Cotton Farmers magazine, the intended cotton planting area in the United States in 2017 was 10.88 million acres, a year-on-year increase of 8%. This will be a situation that has not been seen for American cotton for a long time. Jody Compish, vice president of the National Cotton Congress (NCC), said at the meeting that the main reason for the expansion of cotton planting in the United States is that cotton has a more advantageous price comparison with soybeans and corn. At present, with the exception of Georgia, which is dominated by peanut cultivation, competing crops have almost no advantage in other cotton-producing areas. In addition, the bumper cotton harvest in the United States in 2016, ideal cotton prices, and good returns from cotton planting are also important factors.

Berry Watson, CEO of U.S. Cotton Company, said that the current price of chemical fibers and other man-made fibers is still far lower than that of cotton. Young people aged 25-34 in the United States are the main consumers, and they have already consumed The focus has shifted from work clothes to electronic products, and even when buying clothes, they tend to prefer light and chemical fiber casual work clothes. However, there are signs that it is becoming a trend for consumers to buy back cotton-containing products, which will be particularly beneficial to cotton production in the long term.

It is also understood that in order to ensure the current harvest volume, Punjab Province has issued regulations restricting cotton farmers from planting new flowers before April 15. The government further explained that the “ban” is to allow cotton farmers to learn to sow in season and obtain better returns. Sowing new flowers early may increase their likelihood of being attacked by pests.

Dr. Meyer, an analyst at the U.S. Department of Agriculture’s Economic Research Office, said at the meeting that cotton prices must remain strong enough in the next few months while maintaining an advantage over competing crops. There may be many changes in the cotton market in the next few years, and changes in U.S. cotton planting intentions this year will make the market prospects clearer. He said that China’s cotton reserve inventory may drop to more than 4 million tons by 2020, when supply and demand will enter a new balance point, and the key to the problem is when China’s cotton reserve inventory will reach a relatively balanced state, China’s cotton Will production increase, consumption increase, imports increase, or a combination of the above issues.

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