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Cotton Prices Fluctuate Upward &Nbsp; Textile Exports Increase Variables.

2010/7/1 8:51:00 22

The normal range of cotton price in the past has been no more than 13500-15500 yuan per ton. We believe that the bottom line of cotton price has been raised and will fluctuate within 15000-18000 yuan per ton.

Textile exports increase

Variable

In June 19th, the people's Bank of China announced the further reform of the RMB exchange rate formation mechanism and enhanced Renminbi.

exchange rate

Elasticity.

If the RMB appreciates more than 5%, the domestic cotton market will be double suppressed by the competitiveness of imported cotton and the decline of textile industry demand.

Statistics show that the export dependency ratio of China's cotton textile, wool textile and garment industry is 20%, 27% and 60% respectively.

If RMB appreciation is 1%, the operating profit of export products of cotton textile, wool textile and garment industry will drop by 15.96%, 8.4% and 10.3% respectively.

If we consider the degree of dependence on exports of every industry and RMB appreciation by 1%, the overall degree of damage to the cotton textile, wool textile and clothing industry will be 3.19%, 2.27% and 6.18%% respectively.

Short-term concerns

Regulation

information

At present, China's cotton 328 price index is 18360, a record high, mainly depends on the basic supply and demand of cotton, and the price stays high for a long time, which shows that domestic stock is in a tight state.

Therefore, the China Cotton Association made a statement in June 18th, referring to the relevant departments in actively coordinating Xinjiang cotton pport, will introduce relevant regulatory measures to meet textile demand, maintain market stability, and implement the smooth pition of cotton in the new and old year.

The market has once been rumoured that the country will throw 600 thousand tons of national cotton reserves in the near future, and the price of dumping is likely to be a price limit, which will have a big negative impact on cotton spot and near-term futures contracts, so investors need to pay close attention to this information.

In the short term, with the increase of the replenishment of textile enterprises, the tight supply situation of domestic cotton is more obvious, and spot cotton prices continue to rise.

Considering that cotton resources in the market are decreasing day by day, it is very difficult for cotton to break away from the high and high concussion zone.

The author believes that cotton throwing and foreign cotton quota policy is a key factor in the short term cotton market trend.