Cotton Situation And Outlook In Xinjiang 2019/2020: Cotton Prices May Be Low And Cotton Farmers May Lose Money.

On August 26th -8 30, China's cotton net reporter visited many cotton fields, ginning plants and some textile factories in Xinjiang. According to the actual findings and research objects, we will collect and summarize the cost research reports. The contents are for reference only and do not constitute investment suggestions for anyone.

New flower forecast and outlook in 2019/2020

Planting area: From the survey statistics, the cotton planting area of Xinjiang has increased slightly this year. According to the specific research area, Yuli County was reduced from 1 million 200 thousand acres of cotton fields to 900 thousand mu last year. The main reasons for this reduction are the withdrawal of black land, the conversion of farmland to forests, environmental protection and other factors. Due to the shortage of water resources in Changji, the plan of converting farmland to forests has been implemented since 2017. The wasteland which was reclaimed in the past is reclaimed every year. The plan is to recover 200 thousand mu a year for 13 years, and is expected to be completed by 2030.

Planting costs: The cost of cotton planting around tie Mun Guan is expected to be the same as that of last year. The cost of harvesting cotton harvester is about 1700-1800 yuan per mu. The cost of picking cotton is very high due to the high cost of manual labor. The cost of Hutubi county increases year by year. The reasons are as follows: 1, the shortage of water resources is based on the 373 party / mu standard, which is ten times higher than the standard water charge. It is estimated that 500 crops will be needed for planting cotton per mu. 2, under the plan of black land management and returning farmland to forests, the cost of land transfer will be high, reaching 800 yuan per mu. The total planting cost is estimated at 2100 yuan per mu (including machine charge). The only cost reduction is machine topping and labor saving, but it is a drop in the bucket compared to the increased cost. Farmers in Yuli County reflect that the cost of planting has dropped by 100 yuan / mu this year, mainly due to the reduction of the cost brought by rebroadcast, and the cost of seed farming is 1700 yuan per mu. The cost of land rent is 2200 yuan / mu, of which 280 yuan is harvested, and the rent is 550 yuan / mu.

Production situation: According to the estimate of the head of a large cotton enterprise, the affected area accounts for about 10% of the cotton planting area in the whole country, mainly concentrated in northern Kuitun, Shihezi and Akesu area in southern Xinjiang. According to the specific research objects, the experimental field of timen Guan pass is kept high by seed quality and field management, and is expected to reach 512 kg / mu. The cotton fields in Yuli County were severely cut down last year. The weather is suitable for cotton planting this year, and the yield is expected to return to 380-400 kg / mu. In May, the temperature of Hutubi County in Northern Xinjiang was not good, but the accumulated temperature was good in August. It is estimated that the production is not expected to be strong, and the unit production is estimated to be unchanged from last year, at around 350-400 kg / mu. In the past week, Kuitun and Shihezi suffered three hail disasters, including the area, duration and late planting. The area was seriously affected. The estimated yield was only about 250 kg / mu, but most cotton fields in this area had little problem.

Seed cotton Market: At present, we can see that the cotton field is still green, and the layout near Tian Long has been finished. The prediction of seed cotton prices in the new year is also the focus of this research. For cotton ginning plants, the current cotton prices are low, and they can only earn a little profit under the price of 5 yuan / kg, so it is generally expected to be below 5 yuan / kg. For the cotton farmers who rent the land, the cost of planting and harvesting 1700-2200 yuan / mu is about 400 kg / mu, and the cost per kilogram of seed cotton is roughly 4.25-5.5 yuan / kg. If the direct subsidy policy is not considered, the profits of cotton farmers will be compressed or even lose money.

When new cotton comes into the market, the cautious purchase of cotton ginning plants and the sale of cotton growers will happen frequently, especially in the southern part of 2018/2019, where the ginning plant is obviously losing money and the cost of hand picking is high. This round of games will determine the cost of lint in the new year. However, it is worth noting that last year's direct subsidy activities required only cotton growers who sell cotton seeds before the end of January to qualify for subsidies. Therefore, on the side of cotton ginning plants, the price of seed cotton will probably go higher and lower this year.

Textile situation: In recent years, Xinjiang cotton textile factory, which is encouraged by subsidized policies, is generally new and clean, and its equipment is advanced. There are several balanced walking cars for workers to shuttle through the workshop. But we also noticed that cotton mills started to reduce greatly. There are 14 spinning machines in one workshop, all 1-7 are shut down, and 8-14 small spindles are shut down. Friends in Northern Xinjiang also reflected that the customers who visited the spinning mill were in a semi operational state. This also confirms the fact that the current textile industry is declining, and even if there are certain policy subsidies and support, Xinjiang's textile industry is also hard to get away with.

Cotton supply in Xinjiang in the future

Cotton farmers' willingness to grow: Due to the shortage of land and water resources, the cost of land transfer and water and electricity will continue to rise in the future, and the cost of cotton planting in Xinjiang will continue to increase. At present, the North Xinjiang has fully mechanized, and 40-50% still does not achieve mechanized harvest in southern Xinjiang. There is room for improving mechanization and reducing labor costs. In addition, if seed quality and field management level continue to improve, the yield per unit area will increase substantially, and the unit output cost will be reduced side by side. However, under the backdrop of macroeconomic downturn, cotton prices will be more difficult to raise, and cotton planting proceeds will become the norm in the past year or two.

As a strategic material, the supply of cotton is protected to some extent by the state. Direct subsidy policy will directly protect cotton growers' income. This year is the last year of 18600 yuan / ton cotton target price subsidy. The future direct subsidy policy or other policies deserve market attention, and will also affect cotton growers' willingness to grow.

In addition, the comparative benefits of other crops also determine the willingness of cotton farmers to replant. As a thermophilic plant, cotton has strong adaptability and is suitable for planting in Xinjiang. Therefore, Xinjiang farmers have their own preferences for cotton planting. In addition, sweet and tomato and other cool crops do not pose a threat to cotton planting. But wheat is equally resilience and the price is right, so there is a possibility of substitution.

The competition status of the ginning factory: the most direct supplier of lint is the ginning factory, and its purchase, production and sale decide the cost and trade flow of lint. At present, the whole cotton mill in Xinjiang is in a state of overcapacity, but the number of local cotton ginning plants is small, and the seed cotton resources are abundant. With the reform of the regiment, some of the ginning plants are rents by private companies, and the average rental cost is 750 yuan / ton, which increases the cost of lint.

In addition, the research object of the North Jiangsu ginning factory also indicated that last year, the southern Jiangsu ginning factory sold slowly and suffered serious losses. It is expected that the market will remain bad this year. It may be inclined to speed up the sales strategy through spot or futures channels after processing, as early as possible to repatriate funds and lower the cost of capital and warehousing. It is estimated that if the new flower goes public, the supply pressure will be too high if there is no market for collection and storage.