Direct Subsidy Related Details Have Been Announced. Cotton Price Marketization Still Needs Time.

In 2014, one of the biggest changes in domestic a href= "//www.sjfzxm.com/news/index_c.asp" > Cotton City < /a > was Xinjiang pilot cotton direct subsidy, and related details have been announced recently. "P"

According to the Xinjiang production and Construction Corps, it is basically determined to be 380 yuan / mu of cotton direct subsidy.

This year, Central Document No. 1 decided to break the old pricing system of some agricultural products and establish a new pricing system. The cotton direct subsidy policy is a step from the administrative pricing to the market pricing.

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Part P cotton farmers may be disappointed with subsidies for 380 yuan / mu.

Compared with the cost of 2000 yuan / mu cotton planting, it seems to be relatively limited.

But I think the subsidy is reasonable.

The subsidy of 380 yuan / mu will reduce the cost of cotton farmers by about 20%, and even if the difference between the inside and outside cotton prices of the current 4000 yuan / ton is totally gone, the domestic a href= "//www.sjfzxm.com/news/index_c.asp" > cotton price < /a > falls by about 20%.

Moreover, the price difference between 4000 yuan / ton of cotton at home and abroad will not be achieved overnight. It may take a long time.

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< p > although the domestic cotton market is facing many changes in 2014, in the short term, the policies that affect the domestic cotton market will still dominate the market in the short term.

First of all, the collection and storage will continue: the cotton reserve after the holiday will continue in February 7th and will be extended until August 2014. The national cotton purchase and storage will start again in February 17th and will continue until the end of March.

The second is the new cotton import policy which is closely related to the foreign cotton market. The quota and sliding tax are basically determined. Even though the latter may change, the short term should not change.

Therefore, these policies will still dominate the domestic market at least in the next few months.

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< p > < a href= "//www.sjfzxm.com/news/index_c.asp" > China Cotton Association < /a > statistics. In 2013, the total output of cotton in China was 6 million 770 thousand tons, down 12.5% compared to the same period last year. According to customs statistics, the cotton imports in China dropped 19.2% in the same period last year.

Although domestic cotton output and imports have decreased substantially compared to the same period last year, cotton supply is still not a problem, because China's cotton stocks are as high as 13 million tons, accounting for about 60% of global cotton stocks.

Huge inventory will ensure adequate supply of China's cotton market, but at the same time, it will bring continuous pressure on cotton prices.

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< p > at the same time, downstream textile industry is sluggish, demand is weak and it is difficult to improve significantly.

Due to the reduction of foreign orders, the rise of labor costs, the appreciation of the renminbi and the large difference between domestic and foreign cotton prices, China's textile industry faces many severe challenges and will continue.

In addition, the need to pay attention is that in the current production of serious excess of chemical fiber production, prices continue to slump, chemical fiber to replace or further enhance cotton, will further affect the overall demand for cotton.

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Above all, cotton direct subsidy is of far-reaching significance to China's cotton market, and will gradually change the current cotton market system and pattern. Many problems that plagued the domestic cotton market will gradually get the answer before P.

However, the solution of the problem will not happen overnight. For the futures market, Zheng cotton's main 1405 contract will still be mainly affected by policy factors, even in September.

As for the contracts and new listing contracts after September, due to relatively low prices, there seems to be relatively limited operation space at present.

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