New Cotton Market Near, Cotton Enterprises Clearance Resistance

Half a month later, the domestic cotton market is about to enter the new year, cotton as a quarter of processing, the use of important agricultural products, its production and marketing seasonal characteristics are obvious. With the new cotton coming into the market in September, both cotton producers and traders have begun to take stock of existing stocks and funds to ensure the steady development of the new year's work.

Recently, some traders feedback that in order to prepare sufficient funds for the operation of new cotton, they have started to clear the warehouse. Although the demand of most textile enterprises is not high, they still try to increase the amount of digestion. According to the grade and quantity of cotton used by the buyer, some enterprises select the matching resources as far as possible, and strive to achieve the goal through the forms of seeking the old customers in the direction, packing and transferring the profits.

At present, there are still some enterprises that have completed inventory clearance according to the quantity of nearly 10000 tons. A small proportion of enterprises have completed the inventory clearance. Most of them have maintained a small amount of inventory in order to avoid risks because of the great price fluctuation in the past two years. From the perspective of spot holding index, the remaining spot in 2019 / 20 is Xinjiang cotton, with length of 28-29 and strength of 26-27. The basis range is 700-1000 yuan / ton (mainland Treasury, CF2009 contract).

According to the survey of textile enterprises, it is still difficult to smoothly ship cotton yarn in the near future, and since June, the price of some varieties of cotton yarn has been greatly reduced. At present, the high price of lint raw materials is hard to accept. Therefore, it is difficult for the textile enterprises to go to the warehouse and the cotton enterprises to clear the warehouse, which has become an important "dilemma" restricting the smooth digestion of lint.

Although the road of selling cotton is extremely difficult, some cotton merchants said that they have made some progress in handling inventory through grading promotion and arbitrage. The new year is about to start, both textile enterprises and traders will continue to focus on new cotton, and with the post epidemic period, the market gradually recovered, full of expectations for the future recovery. Some enterprises also said that the long-term recovery of cotton market is a big probability event, so from the perspective of spot value-added, as long as the funds are sufficient, they are not very eager to sell.