Breed focus: domestic cotton prices will rise steadily

In 2010, prices of domestic cotton (21825, 75.00, 0.34%) fluctuate drastically. In 2011, the price of cotton fell sharply, and the cotton industry experienced a “sweet day” of grief and joy. How will domestic cotton prices be interpreted in 2012? In this regard, the author made an analysis and judgment based on the actual situation in Dezhou, Shandong.

Last year, the price of cotton was low, and the income of cotton farmers decreased. The cotton planting area in Dezhou, Shandong Province, was between 2 million and 3 million mu. However, in the case of higher cotton prices in the previous year, the area in 2011 was only 163 million mu. In mid-September last year, Dezhou City experienced a continuous week of rainy weather, which had a greater impact on cotton quality and production. The city's average yield of seed cotton was about 237 kg, 25 kg less than normal, a decrease of 10%.

After the listing of the new cotton in September 2011, the cotton price has been low, the seed cotton purchase price hovered between 7–9 yuan/kg, and the average purchase price was 7.6 yuan/kg, which was down by nearly half from the highest level in the previous year. . Although the price of cotton rose slightly after the Spring Festival, it was weak due to the sluggish textile companies.

The decline in production and the low price of cotton resulted in a reduction in the income of farmers. According to statistics, the cost of cotton planting in Dezhou increased in 2011. The direct costs of mechanical farming, seeds, chemical fertilizers, and pesticides (excluding labor) were 480 yuan/mu, the average land cost was 450 yuan/mu, and the amount of labor paid by employees was 380 yuan. . According to the production of 237 kilograms of seed cotton, the average selling price of 7.60 yuan / kg, the cotton output value of 1715 yuan. If the farmers plant their own land, pick up their own cotton, after deducting the direct cost of planting, the income per mu is 1,321 yuan, which is 300 yuan less than the grain planted. If the land is rented, people are hired to pick up cotton. The income per mu is only 491 yuan.

As the planting area declines, the cotton price will increase steadily and last year. The cotton price will be lower last year. Farmers will not grow cotton at a higher profit. They are not as good as the grain, and they are even less profitable than cash crops such as peppers. At the same time, the government's subsidies for planting cotton are also small. In 2012, grain subsidies in Dezhou were increased to 100 yuan per acre, while cotton seed subsidies of only 15 yuan per acre had no subsidies.

According to the survey, due to the low cotton price in 2011, farmers’ enthusiasm for planting cotton declined. Except Xiajin County, Dezhou City was suitable for planting cotton due to the old course of the Yellow River. The decrease in the area of ​​cotton fields was small, and other counties and urban areas fell sharply. The cotton area of ​​the entire city in 2012 Will be reduced by more than 20%. According to the survey of China Cotton Association, the national cotton area will be reduced by about 10.5% in 2012. According to the forecasts of the International Cotton Advisory Committee (ICAC) Secretariat, the global cotton acreage will be reduced by 8% in 2012 to 33.3 million hectares, and production will be reduced by 6% to 25.1 million tons.

At present, the international cotton price is lower by 2,000 yuan per ton (measured at a slippery rate) compared with the domestic market. Domestic textile companies still have difficulties in operating, the amount of cotton used is reduced, and raw materials for production are abundant. It is unlikely that domestic cotton prices will rise significantly in the future. However, with the support of reserve prices, the cotton resources on the market are becoming less and less, and the price of cotton is falling. Judging from the current situation, the recent cotton price will be dominated by stability, and the price of cotton and yarn will slowly rise from April to August.

Although domestic and foreign cotton acreage will be reduced in 2012, total production will decline, but the 2011 global surplus cotton stocks will be relatively large, which can fully fill the gap in 2012. The possibility of soaring and plunging cotton prices in 2012 is unlikely, but the overall level should be higher than in 2011.