China'S Cotton Demand Is Big And Difficult. The "Three Echelon" Structure Of Cotton City Is Difficult To Change.

Affect China

There are two important factors, one is demand, the other is policy, and these two factors are not isolated.

The author believes that the "three Echelon" structure of China's cotton demand will continue to exist.

China's cotton demand is big and difficult.

Cotton demand actually began to accumulate at the end of 2010, and began to appear in the first quarter of 2011.

There are three factors that affect the commodity price of cotton, namely, supply, demand and money.

In the year of steady demand, supply shocks often become a major hype in the market, such as cotton in 2010.

Since 2012, the demand for cotton in China has been weak due to the shortage of terminal demand and the huge difference between inside and outside cotton prices.

The major difference between China's cotton market and the international cotton market lies in the strong influence of China's policy. However, the cotton regulation policy can only directly or indirectly affect the supply and demand of cotton in a certain period, but can not really change the long-term supply and demand relationship.

If the main contradictions are sorted, the slowdown in export targets and the demand in the context of China's policy regulation remain the biggest problem.

The bigger the problem, the more important it is.

Economic performance indicators.

From 1 to July, China accumulated textiles in 2012.

Exports amounted to US $137 billion 431 million 460 thousand, representing a year-on-year decrease of 0.3%.

In the first 7 months of 2009, 2010 and 2011, the total export volume of textiles and clothing grew by -1.9%, 22.9% and 25.6% respectively.

Compared to these figures, the cumulative growth rate of textile and clothing exports in -0.3% from 1 to July was at a level of crisis in 2012.

The problem of cotton demand in China is attributed to the decline in demand for terminal textiles caused by the slowdown in export targets and the weakening of external competitiveness caused by China's cotton policy and labor costs.

These two questions are very difficult.

The problem of economic growth in the EU, the United States, Japan and other economies is not resolved in the short term, and the repair of the poor cotton price depends largely on the change of cotton control policy. However, the cotton policy is faced with a dilemma of balancing the interests of the main bodies such as cotton growers and spinning enterprises.

Cotton policy and cotton price "three steps"

In the context of cotton demand, the author thinks that China's cotton control policy divides the cotton prices in the Chinese market into three levels, from low to high: the first level is the import cotton price, the second level is the circulation cotton price of the Chinese society, and the third level is China's reserve price.

The existence of price difference will promote the flow of cotton resources from the low price area to the high price area. If the trade is free market is effective, cross market arbitrage will pull the price to the same level.

The present situation is: there is a strong import quota policy for China's cotton between the first and the second levels, and there is a strong policy of purchasing and storing between the second and third levels.

High price and unlimited purchase and storage will gradually absorb high-quality resources from the second level to the State Reserve, and gradually increase the price difference between the circulation price of cotton in the small society and the first price, which is the so-called social cotton price will close to the reserve price.

The huge price difference between the first and the second levels makes the international cotton resources crazily flow to China, but the quota policy makes the pfer process fundamentally limited in quantity, and the visible hand makes the difference between the inside and outside cotton prices remain high.

The three order structure of China's cotton market price

In the downturn of global economic growth and the difficult problem of cotton demand in the long term, it is difficult to solve the three stage structure of cotton price in China market.

The cotton processors, which meet the requirements of storage and storage, assume the role of cotton porters between China's cotton social circulation price and purchase and storage prices, and the driving force for them is money and money. When the price difference is not enough to cover the cost, the pport power will no longer exist.

In this sense, before the global demand for cotton has obviously improved, though

During the period, the circulation price of cotton in China will close to the 20400 yuan / ton purchase and storage price under the influence of the purchase and storage policy.