The new year's cotton purchasing and storage policy supports the limited 2012/2013 cotton storage and storage content compared with 2011/2012, the storage and storage price is increased by 600 yuan/ton to 20,400 yuan/ton, and the scope of storage and storage has been relaxed. To a greater extent, ensure the smooth progress of cotton collection and storage. However, there was no bright spot in the new year's purchase and storage policy, and the price was even lower than expected because of market expectations. Therefore, since the date of the announcement, the increase in cotton price was also limited, and even once suffered from fundamental pressure. In the bearish market trend, India suddenly banned the cotton export market to reverse the decline.
The export policy of India has become known as a fear. Chinaâ€™s cotton is highly dependent on foreign countries, and its degree of linkage with US cotton is above 0.95. Due to the large increase in imports, domestic cotton prices have been hit hard by the external market. According to the export situation in recent years, the total export volume of Indian cotton is about half that of American cotton, and the import share is second only to the United States.
Since September 2011, Indian cotton imports have been ranked first in single month, followed by Australian cotton, and US cotton imports have been relatively small. As of March 5, India has actually exported 1.598 million tons of cotton for shipment. Exceeding the expected 500,000 tons of cotton will be banned from export. From the quantitative point of view, the quantity that has not yet been shipped is not much, and the share of Indian cotton that is imported into China is also small, and there will be no great impact on the supply of domestic market. For the United States, Lidoâ€™s level should be higher than domestic ones. Because competitors have decreased, other countries have fought in US cotton. The demand for US cotton has increased, and prices will also be boosted. However, Indiaâ€™s ban on exports to a greater extent is hurting the interests of local cotton traders, so the ban will threaten to change, which will adversely affect cotton prices. The focus of the cotton market in the latter part will shift more to the fundamentals.
Buying stocks to sell arbitrage opportunities shows that there are many uncertainties in the market outlook. It is difficult to carry out continuous unilateral operations. It is recommended that investors buy high sell lows. In terms of arbitrage, opportunities are greater. The price difference between the contract price of the March contract to be delivered and the spot price in March is around 1000 points, which is far beyond the normal fluctuation range. With the approaching of the delivery date, the possibility of a narrowing of the spread will gradually increase, and the arbitrage can be bought and sold. operating. For companies that have a lot of inventory, it is a reasonable choice to sell hedging according to the actual situation.
At the end of March, after the national collection and storage policy is over, the absolute imbalance in resources and structural imbalances caused by the reduction of high-grade cotton will be the main contradiction in the market. Subsequent changes in textile consumption, the number and pace of quota distribution, and weather conditions will all affect the cotton market.