According to the British "Financial Times" reported on March 9, despite the fact that many cotton buyers around the world are deterred by record high Khmer prices, an important demand force has joined the market: China's national cotton reserves.
Although Indian cotton export bans topped the media headlines on Monday, the more important role of the cotton market in the past 12 months has been China. China’s official cotton reserve stocks have steadily accumulated millions of tons, accounting for 15% of the global projected demand this year.
The Chinese government’s large-scale procurement plan has brought trouble to India, the world’s second-largest cotton exporter, and the country’s factories have to pay higher and higher prices in order to obtain raw materials. Under pressure from the domestic textile industry, the Indian government announced the ban on cotton exports on Monday. This is the second time India has made such a decision since 2010.
Almost exactly one year ago, the cotton price of the ICE Futures US, headquartered in New York, climbed to an all-time high of 2.27 pounds per pound. Before the price of cotton rose to the highest point in history, with the world's largest cotton consumer country, China, and the demand for cotton from various countries' textile mills seemingly endlessly increasing, the record cotton price finally crushed the market, and Asian textile mills unanimously canceled. Production orders. But then, the Chinese government entered the market. Not only does China import a large amount of cotton, it is itself the world’s largest cotton producer.
In April 2011, the Chinese government announced a plan to purchase cotton to supplement its national reserves. As long as the cotton price is below 19,800 yuan per ton (about 1.42 US dollars per pound), it will be acquired.
The plan will be implemented until March 2012, which does not impose a cap on the amount of cotton purchased.
As a result, China's purchasing and storage officials actively launched the acquisition. Since mid-2011, the global cotton price has been below the trigger price. According to the US Department of Agriculture (USDA) estimates, China’s purchasing and storage officials have purchased 11.4 million bales of cotton from domestic farms, and the number of foreign cotton farmers has also been acquired. 5 million packages. This acquisition amount is equivalent to 15% of the global projected consumption of the current crop year.
Although the income of cotton growers, including China, has increased, China's storage plan has caused alarm in the industry and the affected areas are not limited to India.
Last month, the U.S. Department of Agriculture stated in its prediction: “The competition caused by China’s purchasing and storage activities has pushed up the world cotton price and hindered the ability of the global textile industry to purchase cotton for textiles.â€
The International Cotton Advisory Committee (ICAC) is an intergovernmental organization based in Washington. The organization pays close attention to China’s purchase and storage practices. “China’s acquisition of cotton to increase national reserves has supported the world cotton price,†said Terry Townsend, executive director of ICAC. “Economic activities always have advantages and disadvantages. Any action that keeps cotton prices above the equilibrium level will weaken cotton’s share of global fiber consumption.â€
The size of the cotton market is relatively small, with a weighting of only 1.2% in the benchmark index S&P GSCI. However, due in part to the ups and downs of cotton prices last year, cotton also had a certain influence. Glencore, the world's largest commodities trading company, blamed losses on cotton trading when it announced that its trading profits had declined on Monday.
According to the ICAC, since the 1990s, China has started to collect cotton intermittently, but occasionally it will sell off. Since the level of China's cotton reserves is uncertain, traders have to draw a question mark when trying to judge the trend of cotton prices.
Andy Ryan, a cotton broker at FCStone in Nashville, United States, said: “Although the current cotton consumption in the industrial sector is relatively weak and the inventory level is generally higher than it was a few years ago, China’s cotton reserves have such a The fact that big purchasing power has changed the game landscape."
On March 5, the news that India banned the export of cotton came out. The price of cotton rose by 4 cents to 92.23 cents per pound, which rose to a one-day cap. In the US ** office on the New York Intercontinental Exchange, the price of cotton ** calculated based on the continuously traded options market also rose above 94 cents.
A key issue for wholesalers, consumers, and traders is whether India’s cotton export ban plus China’s acquisition will lay a similar trend for the market in 2010-11.
At least for now, all parties agree that it will not. The US Department of Agriculture predicts that, unlike the two years ago, the global cotton inventory is expected to increase for the third consecutive year this year. With the exception of the United States, cotton production has increased.
The U.S. Department of Agriculture said that the demand for cotton has also dropped for the second consecutive year, with a drop of 4% this year. The high price of cotton caused consumers to accidentally find that the clothes on polyester fabrics are also very comfortable. In addition, China's cotton purchase and storage plan may help its cotton cultivation to recover after two years of stagnation. The U.S. Department of Agriculture said: “The increase in cotton production prices in 2010, coupled with favorable weather conditions, is expected to result in a recovery in China’s cotton production.â€
Perhaps the most affected by India’s ban on cotton exports may be India’s reputation as a reliable supplier, and Chinese buyers who now have to purchase cotton elsewhere.
“China has suffered a lot,†said Jordan Lea, chairman of Eastern Trading, an American cotton merchant that exports cotton to Asia. "In their import plans, a large part of the plan was originally from India."
Although Indian cotton export bans topped the media headlines on Monday, the more important role of the cotton market in the past 12 months has been China. China’s official cotton reserve stocks have steadily accumulated millions of tons, accounting for 15% of the global projected demand this year.
The Chinese government’s large-scale procurement plan has brought trouble to India, the world’s second-largest cotton exporter, and the country’s factories have to pay higher and higher prices in order to obtain raw materials. Under pressure from the domestic textile industry, the Indian government announced the ban on cotton exports on Monday. This is the second time India has made such a decision since 2010.
Almost exactly one year ago, the cotton price of the ICE Futures US, headquartered in New York, climbed to an all-time high of 2.27 pounds per pound. Before the price of cotton rose to the highest point in history, with the world's largest cotton consumer country, China, and the demand for cotton from various countries' textile mills seemingly endlessly increasing, the record cotton price finally crushed the market, and Asian textile mills unanimously canceled. Production orders. But then, the Chinese government entered the market. Not only does China import a large amount of cotton, it is itself the world’s largest cotton producer.
In April 2011, the Chinese government announced a plan to purchase cotton to supplement its national reserves. As long as the cotton price is below 19,800 yuan per ton (about 1.42 US dollars per pound), it will be acquired.
The plan will be implemented until March 2012, which does not impose a cap on the amount of cotton purchased.
As a result, China's purchasing and storage officials actively launched the acquisition. Since mid-2011, the global cotton price has been below the trigger price. According to the US Department of Agriculture (USDA) estimates, China’s purchasing and storage officials have purchased 11.4 million bales of cotton from domestic farms, and the number of foreign cotton farmers has also been acquired. 5 million packages. This acquisition amount is equivalent to 15% of the global projected consumption of the current crop year.
Although the income of cotton growers, including China, has increased, China's storage plan has caused alarm in the industry and the affected areas are not limited to India.
Last month, the U.S. Department of Agriculture stated in its prediction: “The competition caused by China’s purchasing and storage activities has pushed up the world cotton price and hindered the ability of the global textile industry to purchase cotton for textiles.â€
The International Cotton Advisory Committee (ICAC) is an intergovernmental organization based in Washington. The organization pays close attention to China’s purchase and storage practices. “China’s acquisition of cotton to increase national reserves has supported the world cotton price,†said Terry Townsend, executive director of ICAC. “Economic activities always have advantages and disadvantages. Any action that keeps cotton prices above the equilibrium level will weaken cotton’s share of global fiber consumption.â€
The size of the cotton market is relatively small, with a weighting of only 1.2% in the benchmark index S&P GSCI. However, due in part to the ups and downs of cotton prices last year, cotton also had a certain influence. Glencore, the world's largest commodities trading company, blamed losses on cotton trading when it announced that its trading profits had declined on Monday.
According to the ICAC, since the 1990s, China has started to collect cotton intermittently, but occasionally it will sell off. Since the level of China's cotton reserves is uncertain, traders have to draw a question mark when trying to judge the trend of cotton prices.
Andy Ryan, a cotton broker at FCStone in Nashville, United States, said: “Although the current cotton consumption in the industrial sector is relatively weak and the inventory level is generally higher than it was a few years ago, China’s cotton reserves have such a The fact that big purchasing power has changed the game landscape."
On March 5, the news that India banned the export of cotton came out. The price of cotton rose by 4 cents to 92.23 cents per pound, which rose to a one-day cap. In the US ** office on the New York Intercontinental Exchange, the price of cotton ** calculated based on the continuously traded options market also rose above 94 cents.
A key issue for wholesalers, consumers, and traders is whether India’s cotton export ban plus China’s acquisition will lay a similar trend for the market in 2010-11.
At least for now, all parties agree that it will not. The US Department of Agriculture predicts that, unlike the two years ago, the global cotton inventory is expected to increase for the third consecutive year this year. With the exception of the United States, cotton production has increased.
The U.S. Department of Agriculture said that the demand for cotton has also dropped for the second consecutive year, with a drop of 4% this year. The high price of cotton caused consumers to accidentally find that the clothes on polyester fabrics are also very comfortable. In addition, China's cotton purchase and storage plan may help its cotton cultivation to recover after two years of stagnation. The U.S. Department of Agriculture said: “The increase in cotton production prices in 2010, coupled with favorable weather conditions, is expected to result in a recovery in China’s cotton production.â€
Perhaps the most affected by India’s ban on cotton exports may be India’s reputation as a reliable supplier, and Chinese buyers who now have to purchase cotton elsewhere.
“China has suffered a lot,†said Jordan Lea, chairman of Eastern Trading, an American cotton merchant that exports cotton to Asia. "In their import plans, a large part of the plan was originally from India."