Since early August, more than 80% of cotton processing enterprises in southern Xinjiang have carried out equipment inspection, fire protection and safety maintenance and debugging work, which is expected to be completed by the end of August to mid-September. According to surveys in Kashgar, Aksu, Korla and Kuitun, only a few cotton ginning plants have not been successfully subleased or contracted out. It is expected that these companies have less hope of making acquisitions in the new year.
Some cotton-related companies believe that the current large lint stocks, tight capital flow, and difficulty in successfully achieving the “double knot and zero payment” of principal and interest by the end of August are mainly large-scale cotton processing companies. Most of the small ginners have got rid of the predicament they were in in the early stage. Some southern Xinjiang The ginning mills had already settled down before the end of May.
Judging from the feedback, the number of cotton processing companies purchased by scales in Xinjiang in 2022/23 will not be significantly reduced compared to the previous year. In 2021/22, a total of 970 cotton processing companies in Xinjiang will participate in notarization inspections. This year, due to their strong ability to withstand risks, high collateral valuations and good reputations, large and medium-sized cotton processing enterprises have recently received benefits such as credit fund carryovers and loan extensions across the year, and their operating pressure has been alleviated to a certain extent; secondly, 2022/23 The Agricultural Development Bank of China and other commercial banks will continue to vigorously support the cotton acquisition business in Xinjiang cotton areas; thirdly, as the Zheng cotton CF2301 contract drops to 13,500-15,000 yuan/ton, the enthusiasm of cotton processing enterprises in Xinjiang to participate in acquisition and processing will continue to heat up. Due to the painful lessons learned in 2021/22, cotton companies are expected to strictly follow hedging operations. If the comprehensive cost of lint in storage is higher than the premium of Zheng Cotton’s main contract, harvest reductions may become the norm. In addition, financial institutions will also increase their monitoring of the purchase price of seed cotton, and “snuff” the signs of ginners raising prices to grab the harvest at any time; fourth, the processing capacity of enterprises in Xinjiang is much higher than the cotton output, even if there is ginning in 2022/23 The flower factory stopped purchasing, but it still cannot change the imbalance between cotton resources and processing capacity.