Xinjiang: Cotton from Xinjiang Production and Construction Corps is scarce and price remains at a high level

Mar 14, 2019  |  by CT
According to some cotton textile factories and intermediaries in Henan, Shandong and Jiangsu, there are a little Bingtuan cotton of 2017 and 2018 before the end of February. Most traders have indicated that they can undertake transportation on their behalf, but the cotton enterprises considered the long transportation time, the approaching delivery time of orders and the pressure of funds, they have no choice but to alleviate the contradiction between supply and demand by purchasing imported cotton or Zheng cotton warehouse receipts.

Two large cotton enterprises in Hebei and Henan indicated that the purchased Bingtuan cotton was in Xinjiang warehouse, and did not ship to the mainland warehouse in December-February. They could ship cotton out of Xinjiang by train, which was conducive to reducing transportation costs and transportation safety, while cotton traders were more inclined to sell in Xinjiang warehouse in order to reduce financial pressure and risk. On the other hand, the spot price of the Bingtuan cotton is higher 400-500 Yuan/ ton than that of the local cotton ginning plant, Zheng cotton CF1905 contract quotation price has little attraction to Bingtuan cotton enterprises and traders. They didn’t have the initiative to transfer or even deliver. In addition, the contract sales progress of high quality and high spinnability Bingtuan cotton is higher than that of Xinjiang local cotton. Traders have the idea of "selling at a higher price".
 
From the survey, on February 27-28, most of the cotton ginning plants and traders in Kuitun, Shihezi and other places in northern Xinjiang adopted the "CF1905 + basis spread" quotation, the "Shuang29" official quotation was 15450-15600 yuan/ton (containing about 2% cotton foreign matter), the "Shuang28" official quotation was 15300-15400 yuan/ton (breaking strength 28-29CN/tex), while the "Shuang28" manual cotton picking gross weight lifting quotation in southern Xinjiang remained stable at 15900-16000 yuan/ton (including 1.3% cotton foreign matter). Although CF1905 contract quotation price dropped from above 15,600 yuan/ton to near 15,200 yuan/ton, the cotton processing enterprises and traders were not willing to reduce the quotation price of high-grade cotton and their reluctance to sell has not abated. Several cotton enterprises in Xinjiang analyzed that although affected by the concentration of quotas and the use of large quantities at the end of February, the contracted imports of cotton increased dramatically, which had some impact on domestic cotton, they took into account the fact that Sino-U.S. trade negotiations continued to release positive news and the cumulative cost of cotton and other factors, and the sales of enterprises were mainly on the wait-and-see side.

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2019.12   

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