After Xinjiang cotton went on the market in 2020, the price of seed cotton has also risen to around 8 yuan/kg. Since the operating profits of most ginning enterprises increased sharply last year, as the time for new cotton to go on the market this year is approaching, the market’s focus has gradually shifted from the growth of new cotton to the time and price of new cotton on the market.

According to a survey conducted by the China National Cotton Reserves Corporation Information Center, the sales of new cotton is expected to be delayed this year, but the overall situation is similar to last year. In terms of output, according to data from the National Cotton Market Monitoring System, the total output of new cotton in 2021 was 5.578 million tons, a year-on-year decrease of 6.3 percent, of which Xinjiang’s output was 5.017 million tons, a year-on-year decrease of 4.5 percent. It is also understood that Xinjiang’s ginning production capacity continues to increase this year. Since 2018, more than 130 new production lines have been added. The decrease in the supply of raw materials and the increase in enterprise demand will increase the price of new cotton.

 

A cotton farmer in Xinjiang said that due to bad weather such as wind disaster and low temperature, most cotton fields in the region have been reseeded this year, further raising the cost of local cotton planting. This year, the cost of land lease in Xinjiang is 1,000 yuan/mu-1,400 yuan/mu, the average cost of land lease increased by 300 yuan/mu-400 yuan/mu compared with last year, the fertilizer price is rising, the current urea price is 120 yuan/bag, more than twice as much as last year. The increase of cotton planting cost promoted the high price of seed cotton.

 

The person in charge of an enterprise in Shandong said that in the past years, when new cotton went on the market in Xinjiang, the price was getting higher and higher. However, due to the adverse weather this year, the output of new cotton was lower than the same period last year. In addition, the downstream consumption situation is better. The price of Xinjiang machine-picked cotton is more than 7.5 yuan/kg, and the converted lint cost is about 17,000 yuan/ton, and the price of hand-picked cotton is higher.

 

Currently, Xinjiang cotton grows well. With the recent rise in cotton and cotton yarn prices, the number of warehouse receipts in the Zhengzhou Cotton Exchange Market accelerated to decline, and the downstream enterprises showed wait-and-see attitude towards the soaring raw material prices. The person in charge of a textile company in Shandong said that due to the rapid increase in cotton prices in recent days, textile companies in Shandong and surrounding areas are increasingly feeling pressure from raw materials. In addition, with the stable launch of nearly ten thousand tons of cotton reserves every day, they slow down the purchase, leading to the volume of spot transactions continues to decline.

 

Meanwhile, with the arrival of Golden September Silver October, spinning enterprises will be better. the leaders of many textile companies in Shandong, Henan, and Anhui said, by foreign orders and domestic consumption gradually turn better and other factors, this year’s business is better, profits are higher than the same period last year. With the coming of the peak season, most enterprises expressed confidence in the future.