Sino US Trade Frictions Escalate, Cotton Prices Fall, New Cotton Market Slows Down

Since late August, seed cotton has been harvested in Shandong, Hebei, Anhui and Hebei. The price of lint cotton has been continuously explored this year. Last week, sporadic enterprises began trial production, but on Friday night China issued a counter message to the United States to impose additional tariffs. The US stock market fell sharply. President Trump expressed dissatisfaction with Twitter, and announced that it would raise tariffs on about 550 billion US dollars in goods exported to China. Sino US trade friction further escalated, Zheng cotton main futures CF2001 contract, a new low, closing price of 12265 yuan / ton, or 3.84%, fell to the limit price 12240 yuan / ton, in addition, CF1909 contract also touched the limit position. The new cotton harvest has been shelved and the pace of listing has further slowed down.

Seeing that the new cotton price in the spot market has dropped, Hebei, Shandong and other companies have begun to suspend their purchase and wait for a further look. Processing enterprises stop harvesting. Some cotton farmers can only temporarily store the harvested cotton at home and wait for the cotton price to stabilize and sell again. In addition, Xinjiang has only cracked Turpan and Hami, and cotton farmers have not yet started picking. Although most of the cotton ginning enterprises have already completed the work of equipment maintenance, they are worried about the continuous decline of cotton prices. Domestic enterprises have also indicated that they will postpone the procurement of cotton. Now the most secure way is to wait and see the market go further. Therefore, the range of cotton harvest and processing postponed in the new year is also expanding. If the number of cotton seeds is increased, the selling pressure of cotton growers will also increase gradually. As for whether cotton prices are low or low, there is a big difference between them. However, according to the recent decline in lint spot prices, seed cotton purchase prices may continue to fall. It is still to be observed whether the concentration of listed cotton harvested in Xinjiang will be centralized.

New cotton market, supply pressure will continue to increase, and Chen cotton sales have also been a great impact, according to feedback from some textile enterprises in recent days, Xinjiang machine picked cotton mainstream trading price of 12400 yuan / ton, hand picked cotton 12900 yuan / ton, Zheng cotton today fell nearly 400 yuan / ton, low price spot is likely to open 12000 yuan / ton pass. Of course, the pressure of individual funds is bigger, and enterprises have already cut down their meat prices substantially below the market price.

As a result, cotton prices have fallen sharply again, and the impact on the cotton industry chain is expanding. To reduce operational risk is urgently needed to be solved. Passive coping can not fundamentally solve difficulties and adapt to market challenges, so as to achieve final victory.