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Deep Research: Is There Really No Way To Control The Cotton Market?

2010/10/19 13:07:00 65

Cotton Market

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Cotton market

The sharp fluctuations have attracted more attention from the global industry.

In the next step, how should the market go, how to regulate and control, and whether there is any regulation and control means? I believe that all parties involved in the market and the relevant management departments should rationale their ideas and do more work from the healthy development of the market.


The recent cotton market situation.

Cotton prices have changed dramatically in the past month, soaring 30%.

Cotton has been a crazy scene under the attention of all parties.

Recently, with the auction of cotton reserves, futures and matching cotton prices have been rising steadily.

The price of the spot is high, the industry is confused. Many people think that the market regulation has no means, and the relevant management departments have not produced effective policies and measures. The market seems to have reached a consensus. There has been no means of regulation and control: the number of cotton reserves has not been increased to stabilize the market price; the speed of imported cotton and the port's arrival can no longer meet the needs of the cotton textile enterprises; if the Agricultural Development Bank's acquisition fund does not enter the market, it seems that there are enough acquisition funds to meet the market demand.


Why does this happen? The reasons are nothing more than the following aspects.

New cotton listing

Postponed; market players believe that the trend of cotton supply and demand is tight, leading to centralized procurement or unscrupulous control of resources; ample liquidity in the money market promotes cotton to become an investment target with financial attributes; at the present stage, local pmission in the upstream and downstream parts of the spinning field is more successful, leading to the following cotton spinning enterprises.

The superposition of various factors has caused the imbalance of local supply and demand to be seriously exaggerated.


market

Regulation and control

It should be further increased.

What is regulation? First, price.

The market risk is mainly reflected in the price.

Given the controversy over whether cotton prices are reasonable at the present stage, the relative stability of prices should be beneficial to all parties involved in cotton trade.

Violent fluctuations are harmful to the healthy development of the industry.

Secondly, the contradiction between supply and demand.

The underlying reason for price fluctuation is the contradiction between supply and demand in the cotton market.

The futures price has been higher than the long term in recent years, which shows that this is partial and short.

Even if the market is to follow up later, in the long run, the contradiction between supply and demand is at work.

The third is a long-term mechanism.

The reason why we kill each other is chaos. The reason is that we do not have an effective operation mechanism and guarantee system.

Since the reform of cotton system, there are several reasons for the fluctuation of market. The underlying reason is the mechanism.


How to control? First of all, let the risk of global textile industry share.

The long-term consistency of cotton prices can effectively maintain the competitiveness of China's textile and clothing industry.

At this stage, China's cotton production can no longer meet China's textile and garment production needs.

This situation can not be turned back at the beginning of the century.

As long as our textile processing volume does not decrease, this trend will not change.

We should give full play to the role of imported cotton, ensure the processing profit space of the textile and garment industry, and reduce the cost risk compared with those of our competitive country.

This is an important means to protect exports and promote employment, and to prevent China's export competitiveness from declining.


Second, measures should be taken to help stabilize the market and reduce short-term risks.

Even if there is a gap in the supply of cotton in the year, in the short term, especially when the new cotton concentrates on the market, the sharp fluctuation of cotton prices is also very irrational. If the follow-up regulation is gradually put in place, time risk will be unfavorable to the development of the industry.

It is understood that the emergence of new cotton listed in Xinjiang acquisition of IOUS phenomenon and commercial banks involved in the acquisition.

Commercial banks can make risk hints, and ious should be effectively curbed.

In addition, Xinjiang cotton Sinop should establish a guarantee system.

We can effectively resolve time risks through measures such as improving the financial market, improving weak links, and establishing reasonable expectations.


Third, take special measures to solve the long-term risks of the industry.

Market liquidity and capital attributes of futures market are important drivers of price. Increasing the risk cost in these fields is an effective way to curb speculation.

In the short term, even if there is no risk in individual units, the long-term risks of these units still exist under the background of imperfect market mechanism in China.

It is the healthy protection of these units and industries to reduce the market speculation power.

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