What is the impact of the Central No. 1 document on the price of cotton?

- Apr 11, 2017 -

February 1, the CPC Central Committee and the State Council recently issued a number of views on increasing reform and innovation to accelerate the construction of agricultural modernization, including the cotton industry's contents: 1, perfect grain, cotton, sugar and other important agricultural products import and export and tariff quota management, strict implementation of cotton sliding tax policy. To crack down on the smuggling of agricultural products; 2, summarize the Xinjiang cotton, northeast and Inner Mongolia soybean target price reform pilot experience, improve subsidies, reduce operating costs, ensure that the subsidy funds timely and full cash to farmers. Actively carry out agricultural product price insurance pilot. Reasonable determination of grain, cotton, sugar, meat and other important agricultural products reserves. and domestic cotton, cotton enterprises and foreign concern focused on the 2015-year Cotton direct-supplement policy adjustments, whether the country after March 2015, after another round of cotton, and 2015 except 894,000 tons of 1% tariffs on cotton import quota, whether additional sliding tariff cotton import quota. The author thinks, "The Central No. 1 document" is a outlines document, although the whole countryside is modernized construction, but cotton, cotton cotton farmer and kapok industry as the important branch of rural economy especially Xinjiang Cotton area), as part of the modernization construction, occupy the important position in the document.

At present, the stock of cotton storage in the country is "irrational" state, but the probability of the country's competition for sale in 2015 is not big. First, according to the current textile industry's consumption capacity, the market most of the 2014/15 year China's cotton consumption capacity will be less than 7.5 million tons (some radical research institutions think less than 6 million tons), while the country's storage of cotton inventory at 10 million tons, inventory consumption than close to 150%. Second, the relevant State departments clearly indicated that unless the domestic cotton supply tight, cotton prices have a breakthrough rise, otherwise in principle will not go abroad to reserve cotton, some cotton merchants and institutions think Xinjiang 3,128-level hand picking cotton costs at 14000 yuan/ton, the cotton market before the Spring Festival enters "a deadlock, difficult to stabilize" stage, so 2015 Xinjiang Cotton Price is lower than 15000 yuan/ton, the country of the possibility of cotton storage wheel is negligible, when cotton spot price higher than 15500 yuan/ ton even 16000 yuan/ton, even if the country turns out reserve cotton, its price is not too low. In addition, from the current market feedback, 2015 years of cotton planting area is a big decline seems to have become a foregone conclusion, to stabilize cotton planting area, competing for pricing power, the short-term in the future of the hope of cotton storage abroad is not small.


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