Increasing the impact of reserve cotton rotation out of the foreign cotton market

It is reported that the China National Reserve Cotton Management Corporation recently issued the 'Notice on Issuing the Sixth Batch of National Reserve Cotton Rotation Plan for 2016/2017'. The notice pointed out that the sixth batch of outbound public inspection plans was 414,000 tons, not only for reserves. Xinjiang Cotton and all storage units are directly affiliated to China Cotton Storage. In late July, it is believed that the relevant departments have already arranged the rotation of Xinjiang cotton reserves in August in advance. Even if the reserves of Xinjiang cotton of 10,000 to 12,000 tons per day are listed, the originally planned rotation of Xinjiang cotton in August will not be less than 240,000. Tons, a sudden increase of 410,000 tons, what is the purpose?　　 From the perspective of public inspection progress and warehouse pressure, how long will it take for the re-inspection of 410,000 tons of reserve cotton? Probably it will be a long and slender process. It is expected to start from late July to the end of September. It will be rolled out during public inspection. Once the percentage of transactions in reserve cotton exceeds 70% for three consecutive trading days, the relevant departments will have the confidence to control cotton prices. So what impact will the increase of 410,000 tons of Xinjiang cotton wheel output have on textile enterprises and traders contracting to purchase foreign cotton?　　 First, the replenishment of raw materials for textile enterprises has slowed down, and the wait-and-see mood has risen. Since mid-June, due to concerns about the fierce bidding of reserve cotton from July to August and the centralized replenishment of textile enterprises, the price of cotton has risen sharply. Some textile enterprises and traders with cotton import quotas within 1% tariff have inquired about prices and waited for opportunities to fix Purchase Australian cotton, American cotton, West African cotton, and Uganda cotton. However, with the announcement of the China National Reserve Cotton Corporation, the voice of buyers has been significantly weakened, and some firm contracts have been temporarily suspended due to insufficient purchase funds or slow collection of gauze sales.　　Second, cotton prices are facing greater pressure of correction. On the one hand, the current price of port bonded, spot Australian cotton, and C/A customs clearance is higher than that of Xinjiang cotton in 2017/18, and the reserve Xinjiang cotton is 1,000-2,000 yuan/ton, and the textile enterprises’ ability to bear it is limited; on the other hand, from 2015/ In 2016, the direct result of the extension of the reserve cotton rotation for one month is that the cotton market price has fallen by more than 2,000 yuan/ton. Therefore, there are many views that cotton prices will see an inflection point, and textile companies are waiting for the opportunity for domestic cotton prices to dive.　　 Third, the cotton supply in the market has improved significantly, and the relationship between supply and demand may change. According to customs statistics, my country’s cotton imports have exceeded 900,000 tons from September 2016 to June 2017. In addition, some cotton importing companies and textile companies have overdrafted quotas in advance, and the available quotas for August-September are not sufficient. , But the release of at least 650,000 tons (410,000 tons + 240,000 tons) of reserve Xinjiang cotton is expected to completely change the supply pattern of high-quality cotton.　　Fourth, it is conducive to the smooth operation of the cotton and textile industries, and avoids injury to workers and farmers. Timely increase in Xinjiang cotton storage is conducive to protecting the interests of farmers, stocking high-quality domestic or foreign cotton for textile enterprises, and ensuring the healthy development of the entire industry. At the same time, alleviating the demand for cotton used by textile enterprises is conducive to enhancing the competitiveness of cotton yarn, grey cloth and clothing in the international market. Article Keywords: 　 Reserve Cotton