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Cotton bullish atmosphere is still thick unknown risk can not be ignored
On October 10, the Zhengzhou Commodity Futures (Cotton) Summit, with the theme of "Cotton Industry Development, Global Markets and Risk Management", attracted more than 600 professionals from domestic and overseas markets. Futures experts, industrialists, relevant government officials and well-known economists from home and abroad expressed their opinions on macroeconomic trends and policy adjustments, the reasons for the rising cotton prices, the interpretation of the market outlook, the impact of cotton spinning enterprises and risk aversion measures. Such a scale and level of the cotton industry forum, rare in China. Cotton price bullish atmosphere is still thick unknown risk can not be ignored "Before I speak to declare that now Zheng business has closed down, cotton 1105 contract rose to 19,305 yuan / ton, not because of my speech rose." A speech The opening of the guest attracted the audience to laugh. Since the financial crisis was eased, cotton prices both at home and abroad have come out of a wave of upward spiral in the context of tighter spot supply. In this forum, the period, the spot person to see more atmosphere is still thick, "market shortage" became one of the key words when participants discussed the cotton market. National Development and Reform Commission Liu Xiaonan, deputy director of trade and economic circulation, said that in recent years, China's cotton acreage showed a downward trend. Cotton prices have risen to their highest levels in nearly a decade since last year, and even so, there has not been much recovery in acreage. One of the core problems is that compared with grain cultivation, the parity effect of cotton and cotton is low. In addition, the increase of labor costs and the low level of cotton mechanization have also restricted farmers' cotton-planting enthusiasm. In the face of difficulties in cotton production growth, the demand for cotton by the downstream cotton spinning enterprises kept growing in successive years. Sun Juan from China Cotton Information Network said that for every 1% increase in cotton consumption in China over the previous year, the consumption of textile cotton will increase by 100,000 tons. According to historical data, the consumption growth of China's spinning in 2007, 2008 and 2009 respectively reached 11.1 %, 7.2% and 14.8% respectively. It is estimated that the amount of cotton used for spinning in 2010 will also continue to increase. According to estimates, from 2001 to 2008, China's cotton consumption has maintained an annual growth rate of about 10%. However, the cotton production in the same period only achieved an annual growth rate of 5.8%. At present, China's textile industry with an annual amount of cotton reached 10 million tons, of which only 70% of the country is satisfied that the future supply and demand gap will increase. Due to the rapid development of China's textile industry, the domestic cotton production is insufficient, so it has to rely on imports from the international market. According to Liu Xiaonan, deputy director of introduction, in addition to a substantial decline in textile exports in 2008, in recent years, China's actual annual imports of cotton in more than 200 million tons, more than 300 million tons, such as the annual calculation can be more than 4 million Ton. At present, our country has become the largest cotton producer, consumer country and importer in the world. However, not only the Chinese market but also the tense international market for cotton supply and demand. Ray Butler, director of the international cotton professional information provider Caucus Luk, said although the U.S. cotton area this year has been about one-third more than the previous year, due to natural disasters in Pakistan, pests in the Mediterranean countries and Brazil's yield is not satisfactory and other reasons, the world's cotton face shortages for two consecutive years. Although the market outlook bullish cotton dominated the view, but some guests also issued a risk warning. Currently, the US cotton price has been running to 90 cents / lb price, and according to Louis Nicosia's executive vice president Joe Nicosia (Joe Nicosia) provided historical statistics, when the cotton price to more than 80 cents / lb Often there is instability - when the price of cotton goes above that level, 80% fall back to 60 cents / lb after six months. Feng Mengxiao, director of China Cotton Net Information, believes that the current low consumption of cotton stocks or insufficient production are based on relatively stable economic growth, while the current market is in ample capital environment, and if the future interest rates or exchange rates The situation changes, all fundamentals may have to re-"shuffle." Therefore, when most people are bullish, investors also need to look at unfavorable market forces. Futures for the rapid rise in the price of investment operations, China International Futures President Chen Donghua Futures Daily in the forum interview, said the futures price itself is not so-called high and low points, it is not the market volatility increases can not participate in the transaction. Whether for speculators or hedgers, participate in futures trading must adhere to the four words - plan, discipline, that is, effective investment strategy, and timely stop-loss. For example, if a seller with a hedging view the probability of a bullish rise in the market outlook, he may stop it temporarily and increase its position when the future market trend is not clear. Commodity price volatility to increase the spot business is facing adverse effects In the combined impact of rising costs and internal and external factors, although this year's textile and apparel exports continue to show a resumption of growth, but production and operation are still under greater pressure. According to Ren Feng, a business secretary of the Foreign Trade Department of the Ministry of Commerce of the PRC Import and Export of Textiles, as the price of cotton continues to rise, the cost of raw materials for cotton spinning enterprises soars this year. The standard cotton price in July this year has risen to 18,000 yuan / ton. At the same time, international shipping costs, recruitment difficulties and wage increases, the pressure of RMB appreciation and increasingly serious international trade protectionism are plagued industrial chain enterprises. At present, the average profit margin of the domestic textile industry is only 3% -5%, and the ability of enterprises to raise price is relatively low. These factors squeeze the profit margins of enterprises and lead to the tensions of the enterprises. At the forum, chairman of New Lake Futures Marvin Sheng told Futures Daily reporter said that the cotton industry chain from spinning to weaving process of profit-making enterprises mainly consists of two parts, one part is the processing profits, the other part is the processing cycle Bring raw material appreciation profits. Looking from the situation of Xinhu Futures Research, the gradual increase of cotton price in the previous stage has had a positive stimulating effect on the whole industrial chain. However, with the acceleration of cotton prices and the reduction of cotton inventories of spinning enterprises in the recent stage, , They are facing a lot of operating pressure because of the substantial increase in costs when purchasing cotton raw materials. Ma Wensheng said that after the financial crisis in 2008, domestic and foreign governments defused the recession through macro-control policies, but this also caused the volatility of the overall commodity prices to increase significantly. And this situation may gradually become the norm in the future. The price volatility is not only reflected in the cotton industry, many industrial chains are facing this situation, but to resolve the price risk, companies can only use hedging instruments for hedging. Spot awareness of hedging and hedging enterprises to enhance the futures industry services urgently need to follow up Spot cotton enterprises are widely involved in the forum is one of the main features. Cai Yajun, Vice Chairman of Hubei Yinfeng Cotton Co., Ltd., introduced the full use of the platform of Zhengzhou Cotton Futures in his speech entitled "Insisting on hedging and realizing a win-win situation for agricultural enterprises" Expand, and through the promotion of "order agriculture" effectively promote the experience of farmers increase production. He also analyzed how to establish a correct futures business philosophy, establish and improve the futures risk prevention and control system, improve the decision-making mechanism and cultivate futures talents. Turning to the help of the futures market to business operation, Cai Yajun said: "In the past when there was no futures, in the face of a rapidly changing market, our operators could not help but walk on thin ice for fear of going one wrong step. After participating in the futures business, And the guidance of the futures market information, so that we bid farewell to the predicament in the past the market is still the same fast-changing, but now we have the bottom, and more objectively and accurately. "For the recent rise in cotton futures positions in Zhengzhou and the size of the transaction, Ma Wensheng told reporters that a considerable part of them are from industrial customers, indicating that cotton spot enterprises began to actively use the futures market tools. He said that China's futures market already has a fairly complete basic system that is suitable for the operation of hedging and price discovery of related industries. The enterprise will not actually participate in the futures market, the first is to see if it has no strategic awareness; the second is that it knows the specific method of operation; the third depends on whether there is a suitable organizational structure; the fourth is there is no corresponding futures Talent. At present, many spot enterprises have realized the importance of futures management. They are not willing to participate in the futures issue, but how to participate and how to participate in the good ones. Therefore, the futures industry needs to continue in helping enterprises to learn the proper use of the futures market Work hard. Forum brings the period, the current industry thinking much room for development and collision The Zhengzhou Agricultural Products (Cotton) Summit is the first large-scale industrial forum organized by Zheng, whether it is the size of the organization, the level of speakers, the depth of topics or obtained The results have been widely praised by participants. One person in charge of cotton from Hubei told reporters that participating in this agricultural summit forum benefited him a lot and brought a lot of business inspiration. The forum is also conducive to cotton, cotton spinning enterprises and foreign counterparts and futures Intercommunication among industries is helpful to broaden their horizons and deepen their understanding of futures hedging instruments. Chen Donghua told reporters that at present, although the number of spot enterprises participating in the cotton futures market continues to increase, but the overall proportion is still small, holding such a large-scale industry forum can help spot business operators to enhance awareness of futures hedging, so as to speed up the futures market For the progress of industrial services, "I think the Zhengzhou Agricultural Commodity Futures Forum will be very viable, the future is likely to be an annual gathering of the cotton industry an essential gathering for the analysis of market trends in the coming year, the spot market layout and the futures market is very Benefits. "Ma Wensheng said that Zhengzhou Agricultural Products Summit brings together the views of people from all walks of life both at home and abroad. Not only the large amount of information but also the professional content are not only a collision of thinking of cotton fundamentals with each other, but also the risk management of cotton market and the cotton enterprises How to achieve the future operation management upgrade of a collision of ideas. "Being involved in such a forum as a futures industry person gives me a stronger conviction in the service industry that we feel there is too much room in this market and that there are many urgent needs for futures companies to complete."
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