In August, most of the cotton areas in northern and southern Xinjiang ushered in persistent high temperature weather, cotton growth accelerated, and cotton yield, total output, and quality in 2021/22 entered a critical period. Echoing the strong growth of cotton, ginneries and cotton companies in Xinjiang are gearing up and preparing to roll up their sleeves and go big.
Some cotton-related companies believe that the factors that lead to cotton processing companies raising prices in 2021/22 to rush to harvest seed cotton are nothing more than the following: First, the planting area and planting area in Xinjiang in 2021/22 The yield per unit area has dropped slightly; secondly, the cotton processing lines in Xinjiang have continued to grow since 2018, resulting in an increasing imbalance between production capacity and seed cotton output, and a serious excess of ginning capacity; thirdly, although ginners have been rushing to buy in the past two years, Zheng cotton has been given away Opportunities for cotton-related enterprises to unwind and make profits; fourth, the Agricultural Development Bank of China, Rural Commercial Bank and other commercial banks have increased their credit support for acquisitions, and the phenomenon of “money waiting for cotton” is obvious; fifth, in 2021, agricultural products such as chemical fertilizers, mulch films, and pesticides will be affected. Driven by rising commodity prices, farmers’ cotton planting costs have increased significantly compared with the previous two years.
The purchase price of seed cotton in 2021/22 will “open high and go high” has become a general consensus among cotton textile companies. From cotton farmers, ginners to cotton traders, they are all gearing up and waiting. The harvesting and weighing of seed cotton also smells irrational. It is recommended that Xinjiang cotton processing enterprises should increase prices appropriately and control risks in the 2021/22 seed cotton purchase.
So how to cool down the rush to buy seed cotton in 2021/22? The author believes that it can be considered from the following three perspectives: First, strengthen credit fund management, issue guide prices and increase review and inspection efforts, and reduce credit support or even suspend loans for cotton processing enterprises that destroy the guide prices and increase prices privately to grab harvests; Monitor and predict the prices of Zheng cotton and Zheng yarn, strengthen the joint supervision of the spot market, and severely crack down on excessive speculation, price gouging, hoarding and other illegal activities, so that Zheng cotton can better promote the healthy development of the industry and highlight the “upside-down” in futures. Under the premise, ginners and cotton traders will be restricted in their rush to buy; third, the government departments will increase policies and information guidance to avoid sharp rises and falls in the purchase price of seed cotton and lint sales price, and ensure the stability of Xinjiang’s cotton planting area. Maintain farmers’ income and the development of cotton textile enterprises. </p
