The Ministry of Agriculture released the weekly cotton market report: national cotton fell, foreign cotton fell.

The Cotton Storage Information Center of the Ministry of Agriculture yesterday released China's cotton market weekly report for the third week of September (September 15-19), according to the weekly report: domestic cotton prices continued to fall, foreign cotton prices fell, and domestic cotton yarn prices continued to fall.

I. domestic cotton prices continue to fall

This week, Xinjiang target price subsidy policy rules were issued, which reflect the central government's determination to let the cotton market play a decisive role in the allocation of resources, and domestic cotton prices continue to fall. On September 19th, the average purchase price of grade 3 seed cotton in the mainland was 3.46 yuan / jin (14808 yuan / ton), up 0.05 yuan / jin or 1.5% over last week; the average purchase price in Xinjiang was 3.23 yuan / jin (13528 yuan / ton), down 0.32 yuan / jin from last week, down 9%. The average sales price of standard lint in the mainland was 16658 yuan / ton, down 131yuan / ton, or 0.8%, compared with last week, and 2627 yuan / ton, or 13.6%, compared with the same period last year. The average sales price of standard lint in Xinjiang was 16656 yuan / ton, down 131yuan / ton from last week, or 0.8%, and 2856 yuan / ton, or 14.6%, from the same period last week. The settlement price of Zhengzhou cotton futures in November was 14300 yuan / ton, down 400 yuan / ton, or 2.7%, compared with last week, and 6805 yuan / ton, or 33.9%, compared with the same period last year. The average contract price of electronic matchmaking transactions in the national cotton market in November was 14658 yuan / ton, up 2.3 yuan / ton, or 1.6%, from last week, and down 4833 yuan / ton, or 24.8%, from the same period last year.

II. Decline in international cotton prices

This week, the detailed rules of the target price subsidy policy in Xinjiang were issued, which highlighted the strong intention of the Chinese government to activate China's cotton market, and international cotton prices fell. On September 19, the October contract price of New York cotton futures settled at 65.99 cents / lb, down 4.6 cents / lb, or 6.5%, from last week. The international cotton index (M), which represents the average CIF price of imported cotton at China's main port, is calculated at 1% tariff, the import cost is 12190 yuan / ton, down 408 yuan / ton from last week, or 3.2%, lower than 4468 yuan / ton in the domestic market, and the price difference is 277 yuan / ton wider than last week. According to the sliding tax, the import cost of RMB is 13930 yuan / ton, down 1.8% from last week, lower than 2728 yuan / ton in the domestic market, and the price difference is 119 yuan / ton wider than last week.

III. Domestic cotton yarn prices continue to decline

This week, the domestic yarn, cloth market transactions are deserted, yarn prices continue to fall. On September 19th, 32 pure cotton carded yarns were quoted at 23950 yuan / ton, down 80 yuan / ton from the previous month, down 0.3% from the previous month, and 1865 yuan / ton, or 7.2%, from the same period last year; polyester staple fiber was quoted at 8720 yuan / ton, down 160 yuan / ton from the previous month, down 1.8%; down 1330 yuan / ton from the same period last year, down 13.2%.

IV. Analysis and prospect

International cotton prices may continue to decline. This week, the fed expects us GDP to grow by 2.0 per cent in 2014, down from 2.1 per cent in June. In the euro zone, the European Central Bank announced its first round of targeted long-term loan Program (TLTRO) of 82.6 billion euros, less than the market expectations of 100 billion-300 billion euros. Fundamentals, according to the United States Department of Agriculture (USDA): from September 5 to 11, 2014, the net signing of upland cotton exports in 2014 was 1.7 tons, a significant increase over the previous week and a 34% increase over the previous four-week average. The main buyers were Mexico, Turkey, El Salvador, India, Vietnam and China (1157 tons), and the main buyers were China, which cancelled 24000 tons of contracts. Us upland cotton export shipments were 23700 tons, up 25% from the previous week and 7% from the previous four-week average, mainly to China (5511 tons), Mexico, Vietnam, Turkey and South Korea. As of September 14, the picking rate of American cotton was 6%, an increase of 2 percentage points over the same period last year and 1 percentage point lower than the average level of the past five years. Recently, it has been reported that in the new year, the Chinese government tends to encourage textile enterprises to purchase and use domestic cotton, and will issue cotton import quotas for the new year strictly and cautiously. As a result, it is expected that international cotton prices will continue to decline.

Domestic cotton prices may continue to fall. This week, of the 70 new commercial housing (excluding affordable housing) in China's 70 large and medium-sized cities in August, 68 fell month-on-month, 1 was flat, and 1 rose. The highest increase is 0.2% and the lowest is a decline of 2.1%. Prices are down in 19 cities, flat in 3 and rising in 48. The highest increase is 6.4% and the lowest is a decline of 5.6%. The number of cities where prices fell month-on-month in August increased from 64 to 68, while the number of cities with a year-on-year decline jumped from 3 to 19. Fundamentals, Xinjiang cotton target price subsidy policy rules issued, the details reflect the central government's determination to let cotton return to the market, thus judging that domestic cotton prices may continue to decline.

Annex 1:

Price list of cotton and cotton yarn at home and abroad from 15 to 19 September 2014

Project

Unit

September nineteenth

Ring ratio

Year-on-year

Rise and fall ±

Amplitude ±%

Rise and fall ±

Amplitude ±%

National Cotton Price B Index (average price of standard lint in the mainland)

Yuan per ton

16658

-131

-0.78

-2627

-13.6

Average price of standard lint in Xinjiang

Yuan per ton

16656

-131

-0.78

-2856

-14.6

Settlement Price of Zheng Mian Futures CF1411 contract (Grade 3128B Cotton)

Yuan per ton

14300

-400

-2.72

-5785

-28.8

Yuan per ton

14658

two hundred and thirty three

1.62

-4833

-24.8

Average purchase price of grade 3 seed cotton in mainland white cotton

Yuan / jin

3.46

0.05

1.47

-1

-19.0

Yuan per ton

14219

-591

-3.99

-4508

-24.1

Average purchase price of Xinjiang white cotton grade 3 seed cotton

Yuan / jin

3.23

-0.32

-9.01

-1

-27.6

Yuan per ton

13528

-1272

-8.59

-5561

-29.1

International Cotton Index (M)

Cents per pound

76.25

-3

-3.32

-15

-16.8

Import cost of imported cotton converted into RMB (1% tariff)

Yuan per ton

12190

-408

-3.24

-2403

-16.5

Import cost of imported cotton converted into RMB (sliding tax)

Yuan per ton

13930

-250

-1.77

-1577

-10.2

Settlement price of New York cotton futures October contract

Cents per pound

65.99

-4.6

-6.54

-17

-20.8

Market transaction price of C32s carded yarn

Yuan per ton

23950

-80

-0.33

-1865

-7.2

Yuan per ton

8720

-160

-1.80

-1330

-13.2

The exchange rate of US dollar to RMB

Yuan per ton

6.1455

0.00

-0.02

0

-0.2

Annex 2:

Spot price trend chart of cotton at home and abroad since 2010

Annex 3:

Comparison of spot price trend of cotton flowering period at home and abroad since 2010

Annex 4:

Comparative Chart of domestic Yarn / Cotton Price difference and Cotton / Polyester Price difference since 2010