Weekly Report: Xinjiang Target Price Policy Announced, The Active Trade in Cotton Reserves

1. Xinjiang Has Improved Its Target Price Policy with a Price Level of 18,600 Yuan Per Ton

On March 26, the National Development and Reform Commission and the Ministry of Finance issued a notice on improving the Cotton Target Price Policy. In order to implement the spirit of the 2020 Central Document No. 1, with the approval of the State Council, the Cotton Target Price Policy will be improved in Xinjiang in 2020. The price level is 18,600 Yuan per ton, which is evaluated every three years, and the Target Price Level is adjusted as appropriate according to the evaluation results.

2.The Turnover Rate of Cotton Reserve Has Been Continuously Increasing

The round of the reserve cotton rotate-in is coming to an end. In the seventeenth week (March 23-27), cotton companies have been actively sold, with a planned round of 78,000 tons, a cumulative turnover of 65,600 tons, and a turnover rate of 84.05%, which is higher than last week 6.05 percentage points. As of March 27, the cumulative turnover of cotton reserve rounds was 356,600 tons, with a turnover rate of 47.8%. The highest transaction price was 14,197 Yuan/ ton, and the lowest transaction price was 12,071 Yuan / ton.

According to the formula issued by the National Food and Material Reserve Bureau and the Ministry of Finance (2019 No. 3) for the maximum bid price of the central reserve cotton rotate into the auction, Xinjiang cotton rotate into the eighteenth week of 2019 (March 30 -March 31) The maximum bid price is 11550 Yuan / ton (standard 3128B price), which is 900 yuan / ton lower than the previous week.

3. Domestic and Foreign Cotton Prices Continue to Fall

Last week, the international epidemic further spread, domestic textile companies reduced orders, and cotton demand was weak. The weekly average price of the China Cotton Price Index CC Index (3128B) was 11,341 Yuan / ton, down 857 Yuan from the previous month; the weekly average price of the Cotlook A index was 63.06 cents / lb, down 4.48 cents from the previous month, and a 1% tariff reduction was 10,915 Yuan/ Ton, which is 426 Yuan lower than the China Cotton Price Index (3128B), 13185 Yuan per ton under sliding tax, 1844 Yuan higher than the China Cotton Price Index; the weekly average price of the imported cotton price index FC Index M is 65.22 cents / Pounds, down 3.77 cents from the previous month; the average weekly price of CF005 main contract of Zhengzhou Commodity Exchange is 10,517 Yuan / ton, down 869 Yuan from the previous month; the average weekly contract price of ICE cotton futures is 52.52 cents / lb, down 3.87 cents from the previous month.