Market Analysis of Hubei Cotton Market in 2010

Since entering the 2010 cotton year, **, blending, throwing stocks, and spot cotton prices have all rushed upward. This has driven the price of seed cotton purchases to continue to climb. The cost of textile cotton continues to increase, the purchase and sales situation is extremely complicated, and the industrial risk chain is strained. The market has a strong wait-and-see mood. The cotton situation in Hubei Province has the following characteristics:

1, seed cotton points, poor grade, serious water content exceeded. Affected by factors such as climate and environment, the quality of cotton declined in 2010. The average grade in 2009 was 3.3, while in 2010, the main grade was weak grade 4, and the proportion of grade 3 cotton was relatively small. Grade 2 cotton was rare. In the previous period, the average clothing content in the province was 37% or less, water content was 17-18%, and some of them reached 25% or more, 13% higher than normal years, and more than 30% higher. With the arrival of the concentrated listing period of cotton, the quality has improved from the previous period.

2. The purchase price continued to rise, and the risk of cotton processing enterprises increased. Seed cotton acquisitions have opened higher and higher, with strong upward momentum. From the early September of 4.1 yuan / kg to the current 5.6-5.8 yuan / kg, individual areas also more than 6 yuan / kg, the province's average purchase price has been 5 yuan / kg, an increase of 67%. After the listing of Xinmian, the acquisition cost price has always been ahead of the ** contract price, and the spot price of cotton has risen ahead of the ** price, which is higher than the forward contract price of RMB 2000-3000/ton, and cotton acquisition and processing enterprises cannot achieve it. As a result of hedging, at the same time being affected by bad imports such as imported cotton to Hong Kong, national throwing storage, and textile enterprises' ability to bear, cotton acquisition and processing companies are at the cusp of prices, are extremely worried about the market outlook, and are in a dilemma in operating decisions, and are afraid to miss seasons and collect more fears. Purchase and sales prices are upside down.