Hot money fell for cotton prices in Jiangsu cotton companies

From July 25th to 26th, the cotton price quoted by Yancheng, a major cotton producing area in Jiangsu Province, fell to 20,000. The 2011 new cotton collection and storage price of 19,800,000 yuan, which has been introduced by the neighboring countries, is higher than the highest price of 34,000 yuan per ton this year. It has fallen by more than 14,000 yuan.

The price of cotton that jumped up and down caused cotton farmers to be hurt. Dachang City, West Town, West Town, Jiuyuan village cotton farmers Zhou Jun to find out about the town, seed cotton purchase price is only 9 yuan per kilogram, the price can not make money. I heard that the price of new cotton may be even lower. Looking at the cotton on the top of the field, he felt extremely uncomfortable. Last year, the price was good, Zhou Changjun made 7 million acres of cotton, 1,500 yuan per mu of cotton. Not this year, the rainy season was over and the current price was chilling. He said: "This year, the cost of 1,000 yuan per mu will come out. Seed cotton will only make a profit if it sells for 10-12 yuan per kilogram. Now, under the current price situation, many people do not plan to grow cotton."

The days involved in cotton companies are also sad. Lianyungang New Suyu Cotton Storage & Transportation Co., Ltd. is the designated delivery warehouse for the national cotton trading market. Li Weizheng, the company's business vice president, told reporters that this year's cotton market is unstable and the price changes are large. At present, the company’s inventory is more than 10,000 tons. Stable, the company's inventory is generally maintained at two or three thousand tons, "never been as much as it is now. August will be sold out of inventory of cotton, otherwise, new cotton listed cotton sold more than ten thousand tons is still stressful First, I will not know what to do in the second half of the year.” According to him, the days of the small cotton traders are even more sad. The stock is 500 tons, and the capital that is pressed is 10 million. “Even if it is a discount of 78 million yuan, for the small The cotton trader is also a very big figure. If it does not, it will only go bankrupt."

Will the days of cotton textile companies be better? Jiangsu Hongmao Textile Co., Ltd. is a spinning enterprise and assistant general manager Pan Jiaqi said that since last year, the price of cotton has skyrocketed and companies have eaten in large quantities. Lint cotton purchased at RMB 32,600 per ton and RMB 26,000 respectively has formed up to More than 160 tons of inventory. At present, the price of cotton yarn is only 28,000 yuan per ton, and the processing cost per ton is 7,000 yuan. "A loss of one ton per ton has been processed, and the company is already in a semi-discontinued state."

According to the Cotton Association of Jiangsu Province, the normal inventory of cotton yarn companies should generally be about 15 days, but at present, many companies have reached 25 days of inventory; cotton companies have a normal inventory of 30 days, and now stocks 50 days. Acquisitions, ginning, cotton yarns, cotton cloth, and garments have an additional 10 days of inventory in each link, and 5 links are 50 days. "According to the current daily inventory of 30,000 tons, 50 days is 1.5 million tons." A large number of stocks occupy the textile company's liquidity, coupled with the current credit tightening, the company is facing the risk of capital chain fracture. In the face of such a situation, most enterprises can only make a decision of “seeing and walking”.

On July 25, the Provincial Cotton Association held a seminar on the 2011 cotton situation in Nantong. At the meeting, Gong Wenlong, director of the Information Center of China Reserve Cotton Management Corporation, suggested that the rise in cotton prices in the second half of the year is unlikely and the probability of decline is rather large. From the perspective of supply and demand, the situation of cotton production this year is better than expected, and the production situation of major cotton producing countries in the world is better. According to statistics of the National Cotton Market Monitoring System, the global cotton surplus (excluding China) is 5.1 million tons. It is estimated that this year China's cotton production will be 7.39 million tons and consumption will be 9.93 million tons, with a deficit of 2.54 million tons, which is lower than the global cotton savings. Judging from the trend of commodity prices, the current price of cotton remains at a high level compared with domestic agricultural product prices, and there is still room for decline. In addition, the situation of production and sales of downstream companies is not optimistic, and the demand for upstream industrial raw cotton is likely to be suppressed.

However, the cotton market is not calm. Pan Honghui, deputy general manager of Suzhou Business Department of Dongwu ** Co., Ltd. introduced that on July 15th, the hand-holding capacity of cotton in the Zhengzhou ** market reached 570,000 hands, which jumped to 636,000 hands on the 18th, increasing the number of positions in a day by 11 %. Only one day later, on July 19 Zheng Mianchuang held the highest amount of hands, reaching 818,000 hands. He believes that the ultra-high cotton ** position has exceeded the spot size of cotton, is very abnormal, there should be large-scale capital in the cotton market, brewing new speculation node.

It is understood that the price of cotton has remained moderately volatile during the period from the financial crisis of 2004 to 2008. The financial crisis hit a trough. In September last year, it returned to the pre-crisis level. Afterwards, it went all the way from 17,000 yuan per ton to 34,200 yuan in early November last year. Before this, domestic agricultural product prices have risen, and only cotton is at a price drop. A lot of hot money waiting in the wings. There are indications that there has been a lot of involvement in hot money in October 2009, including many inflows of funds that have nothing to do with cotton or cotton yarn. Faced with the current lot of hot money around the cotton "turn", Gong Wenlong jokingly said: "Audi is open to enter, open out what is not known."

Hot money speculation itself has extremely high risks. Companies or individuals involved in speculation are responsible for their own profits and losses. It is extremely unfair for cotton farmers to be involved, often earning more losses. How to protect the interests of cotton farmers? A cotton trader who has engaged in the cotton trade for more than 20 years has introduced that in the United States, the farmers' association will sign an agreement with the government prior to planting. The agreement will specify the basic planting area and the subsidy yield. The government will use the direct subsidy rate of 6.67 cents per pound, subsidy area, and subsidies. The volume of yield per unit gives direct subsidies to cotton farmers for cotton farmers to buy seed fertilizers and pay for harvesters. Until cotton is listed, if the sum of the direct subsidy and the market price is lower than the national minimum protection price of 72.40 cents/lb, the cotton farmers can also receive the subsidy for the difference. This largely guarantees the enthusiasm of planting cotton farmers and helps stabilize cotton prices.

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