Cotton Market Trend and Analysis in 2016 Cotton Production Decline 26% Lead to Cotton Price Rise

Release time:

2020-05-27

From 2010 to the beginning of 2016, cotton prices fell from a high of 34879 yuan per ton to a low of 9890 yuan per ton, a drop of 70%. However, according to the reporter's understanding, since April this year, cotton futures prices have begun to rise sharply, from 10200 yuan per ton to 16185 yuan per ton, an increase of nearly 60%. With the high price of cotton futures, in stock prices have also risen by about 30%, and the cotton market, which has been in the doldrums for many years, has been sought after again. Seeing the cotton harvest is imminent, how will the increase in cotton prices affect the income of cotton farmers? In Wangjiazhuang Village, Binzhou City, Shandong Province, the soil and climate here are very suitable for the growth of cotton, so most of the local villagers are planting a large number of cotton, and farmers have been growing cotton for more than 30 years. At present, the cotton here is in the stage of flowering and peaches. Cotton farmer Wang Jianjun told reporters that in the next month and a half, as long as there is no continuous heavy rainfall or typhoon, there will be a bumper harvest of cotton this year. Wang Jianjun: I estimate that the output is more than 450kg (city kg). Even if it is managed well, it can even reach 500kg per mu of land. The reporter learned in the interview that at present, cotton can produce 450 jin per mu of land, compared with 350 jin per mu last year, the increase has reached 50%, and according to the current market situation, one jin can be sold to 3.5 yuan after listing. Wang Jianjun said that in this way, the harvest of 200 mu of cotton planted by his family this year should be considerable. Wang Jianjun: The cotton output of one mu of land is nearly 450 jin. If you calculate it, one mu of land may earn three hundred and five hundred yuan. When I can earn five hundred yuan per mu of land, I can earn about one hundred thousand yuan. Zheng Bo, a market analyst at Zhuochuang Information, told reporters that cotton prices have continued to be sluggish in recent years, and cotton farmers' willingness to plant has not been high. Last year, the price of cotton was only 2.5 yuan per catty. Due to bad weather and low yield per mu, the income per mu of cotton was less than 800 yuan. However, in terms of cost, if the land contract fee and the labor cost of agricultural materials are added, the cost alone will cost 1000 yuan. Even with the state subsidy of 150 yuan per mu, cotton farmers are still in a situation of losing money. Zheng Bo: Since May, the national cotton reserve has started to turn out. The market has relied on the national cotton reserve to fill the gap. Recently, driven by the rising of internal and external cotton and the rising reserve cotton sales reserve price, the domestic cotton price has been moving up continuously. As of July 27, the average domestic cotton price has risen to 15105 yuan/ton, up 19.53 percent from the previous month and 13.18 percent from the previous year. The sharp rise in raw materials has fully ignited the sentiment of spinning and weaving links in the middle and lower reaches. Pure cotton yarn has rebounded strongly and rarely jumped. According to Zhuochuang statistics, the national average price of 32 high-end combs was 22800 yuan/ton by the end of July, up 7.55 percent from the beginning of the month when the price rebounded by 1600 yuan/ton. In Binzhou, Shandong, many cotton farmers told reporters that because they lost money in planting cotton last year, the local cotton planting area has been greatly reduced this year. Cui Shaoxu, a cotton farmer in Bincheng District, Binzhou, Shandong Province, said he had switched to other crops. Cui Shaoxu: It's all down. Our village planted more than 4,000 mu last year, but less than 2,000 mu this year. He didn't want to spend that effort when he changed to wheat or corn. Sun Liwu, a market analyst at Zhuo Chuang Information, said that the planting area of cotton across the country is generally low this year. Taking Shandong as an example, the planting area has dropped by 26% compared with last year. Sun Liwu: In Shandong's main cotton producing area, we conducted a sample survey of 500 cotton farmers, then we finally calculated that in 2016, the cotton planting area in Shandong was about 4 million mu, down 26% from last year. From a national perspective, we finally calculated that in 2016, the national planting area was 42.66 million mu, down 14.4 from last year. Regarding the in stock price of cotton that will be listed on the market, Zheng Bo, a market analyst at Zhuochuang Information, predicts that although cotton prices are not supported by large demand, due to the supply gap, cotton prices still have room to rise in the short term. Zhuochuang predicted that the high cotton price makes the terminal purchase and sale tend to be cautious, and it is still difficult for the downstream to give the demand basis for the cotton price to soar, but the supply gap in the new year still gives the cotton price support, and the short-term cotton price is easy to rise but difficult to fall, but we need to pay attention to the policy to face the cotton price guidelines.

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