Market Observation: Cotton Mills Have Low Willingness To Purchase Cotton From Real Estate, And Prices Are Generally Depressed

The Anhui Monitoring Station of the National Cotton Market Monitoring System reported that the price of the main contract of domestic cotton futures rose in shock this week, but the lint transaction of ginning plants in the regions along the Yangtze River not only did not improve, but also showed a downturn, with fewer transactions and lower prices.

This week, the main contract price of domestic cotton futures rose from the lowest 13560 yuan/ton on Monday to the highest 13735 yuan/ton, with a difference of 175 yuan/ton. Although the increase is not large, it shows that the cotton futures price is stabilizing, which is conducive to the restoration of confidence in the cotton textile market. However, according to the survey of ginning plants in the main cotton producing areas along the river, the cotton market is still not improving, which highlights that the overall sales of local cotton is weak and the turnover is low.

The low turnover of real estate cotton this week is mainly due to the reasons of both buyers and sellers:

First, downstream cotton mills are less willing to purchase local cotton, and cotton mills with rigid demand generally lower prices to reduce cotton costs. According to the ginning factory, the cotton picking price of 4128 grade real estate of the factory was still 14300 yuan/ton last week, while the downstream quotation fell to 14200 yuan/ton this week, which was unacceptable to the ginning factory;

Second, the number of lint retained by some ginning plants is not too much, and many plants are 100-200 tons. It is still half a year before the new cotton comes into the market, and the local cotton has price advantage, which is still the first choice for some small cotton spinning mills to mix cotton, so ginning mills have a strong willingness to support the price.