2015/16 Cotton Prices Are Low Or High Before Domestic Cotton Supply Will Become Tense.

The high temperature in the southern part of Xinjiang affected the yield per unit area.

stay

Active reduction this year

Under the background of planting area, the final yield level of cotton will have an important impact on the domestic cotton supply and demand situation.

In Alar of Xinjiang and Awati of Akesu, it is understood that the high temperature in July has a greater impact on local cotton growth. This year, the yield per unit area may decrease to varying degrees.

Therefore, although many acquisition processing enterprises are cautious about this year's cotton prices, it is generally believed that they will be below 5.5 yuan / kg. However, some market participants believe that the cotton output in Xinjiang has dropped to below 4 million tons this year due to the unusual high temperature weather. 2015/2016 cotton annual domestic cotton price is showing a trend of low before and after high.

The output of cotton in the first division is the highest in all divisions, ranking second only to the eight division of agriculture.

"In the past few years, we have begun to adjust the industrial structure. At present, the cotton planting area accounts for nearly 2/3 of the total cultivated land in the whole division."

According to Li Cheng, general manager of cotton and hemp company of Nong Yi Shi, this year, Nong Yi division reduced cotton planting area by 200 thousand mu, mainly planting walnuts and interplanting cotton in it.

Last year, the division planted 2 million 200 thousand mu of cotton and more than 350 thousand tons of lint yield.

Output is expected to be around 310 thousand tons.

"Hot weather in from July 16th to 26th of this year is not seen for many years. Cotton sitting peach is affected. The top peach of a single plant is reduced by about 2, and the yield per unit area may be 5% - 10% lower than that of last year."

Li Cheng predicts.

High temperature weather

The concentration of Awati county has also had a great impact.

In the three harvest field of Awati's long harvest cotton field, cotton bolls on top of many cotton plants have withered and fallen.

Li Jingquan, general manager of Xinjiang Lu Tai Feng harvest cotton limited liability company, said that this year encountered extreme weather. The high temperature which lasted for about half a month seriously affected the cotton yield.

Because of the high humidity requirement for long staple cotton growth, the effect of high temperature on it is more serious than that of fine staple cotton, and the output is expected to drop by 30%.

Awati County deputy county magistrate Yi Jie said that in 2014 Awati County cotton planting area of 1 million 580 thousand mu, lint yield 180 thousand tons, of which 580 thousand tons of long staple cotton.

When the cotton planting in this county decreased by 120 thousand mu this year, the planting of long staple cotton increased to 1 million 150 thousand mu, but the yield per unit area would decrease compared with that of last year.

"Restricted by water resources, the cotton planting area in Awati will be reduced in the next few years, with a target of 1 million mu."

Dai Yi Jie said.

"The decline of cotton planting area in Xinjiang has become a reality this year. If the yield per unit area decreases again, the output of cotton in Xinjiang is likely to be below 4 million tons.

Without considering cotton throwing and storage factors, the domestic cotton supply gap will expand further than expected.

Analysts believe that this is likely to drive domestic cotton prices up in the later stage.

In addition, the quality of Xinjiang's cotton has improved this year, and the quality premium will eventually be reflected in the price.

Fu Haitang, a well-known futures investor who took part in the inspection, is also firmly optimistic about the cotton market.

"Cotton prices in the new year are expected to be low and high."

He believes that the reduction of domestic cotton planting area is a major trend. In the next few years, domestic cotton production may be higher than market expectations, and domestic cotton supply will become more intense.

At present, cotton prices are in the bottom area, and the space for continued decline is limited.