A general decline on purchasing price of new cotton
Source: CTEI Date: 2011-11-29
It is entering the peak season of cotton acquisition, farmers who anticipate a good pirce for this year yet encountered a cheerless market. Our reporter learned from Henan, Shandong and other places that, in contrast with the rush buying in the same period last year, this year, the trade between cotton farmers and purchasing enterprises was in deadlock, seed cotton price continued low, some of the farmers were even panic about it.
Henan: new cotton purchasing is slow,cotton yarn selling is faltering
Recently, in some areas of Henan, quoted price for seed cotton remains 4 yuan per half kilogram, however the acquisition almost stalled. Processing industry dare not to open the acquisition upon the concern of high cost and low profit along with the purchasing of seed cotton and the decline of lint cotton price. Moreover, the current purchasing price was far from the farmers expectation, 30 ~ 40 percent lower than the price of last year —6 yuan per half kilogram, so the farmers were not active to sell at all.
As price for lint cotton continued to fall, textile enterprises of different sizes have different amount of stocks of cotton yarn, which led to selling difficulties. For example, 40 comber cotton yarn prices remained roughly at 32000 ~ 33000 yuan / ton.
Shandong Dezhou: seed cotton price falls below 4 yuan per half kilogram
Different from previous years’ thriving market, due to the price problems, there is basically no business on the cotton market of Shandong Dezhou this year. Now the seed cotton price fell to 3.8 yuan per half kilogram, yet 7 yuan per half kilogram in the same period last year. According to the calculation of farmers, they can make profit only when the price reached 4.5 yuan per half kilogram, the current price was 3.8 yuan, no profit margin at all. Therefore farmers were reluctant to sell cotton on the current prices, many of them even switched to grow wheat.
Xinjiang: acquisition approaching end, sales difficulties not improved
What we learned from Changji Cotton Association is that, so far, 85 percent of the cotton in this state have been picked, the average purchase volume of seed cotton remained around 8000 ton per day.
In recent days, as the lint sales difficulties and price decline, combined with low prices of such by-products like cotton seed, short fiber cotton etc, it resulted in the continuous decline of purchasing price of seed cotton. Currently, the average price of seed cotton was 8.45 yuan per kilogram, dropped 19.52 percent than last year’s 10.5 yuan per kilogram. Equivalent to standard lint cotton 20500 yuan per ton ( containing processing fees).
As of now, 66100 tons of lint cotton have been processed, accounted for 50.23 percent of total purchased seed cotton. 8300 tons of the processed lint cotton were sold out, accounted for 12.6 percent of total. The price for it was around 20000 yuan / ton, 800 tons for state reserve. Sales situation is still grim.
