Recently, in the absence of a significant change in market supply and demand, cotton prices have fluctuated more violently, the turnover rate of reserve cotton has increased, and the market has experienced tension. After investigation and communication with relevant departments, the China cotton association now has sufficient reserve stock to guarantee the rotation demand, and can increase the market supply through additional import cotton quota and other measures. There is no shortage of supply quantity. 

First, cotton production is expected to remain stable this year. According to the investigation of all relevant parties, the area of cotton planting in China will remain basically stable in 2018, and xinjiang will continue to increase. Since sowing, some cotton areas have encountered meteorological disasters, but compared with previous years, the difference is not significant, and the occurrence time is earlier, and the impact on the overall yield is limited. By the end of may, all reseeding had been completed, and the growth trend was stable. The seedling rate was better than that of the same period last year.

Second, the market spot supply is sufficient. A total of 3.22 million tons of cotton reserves were sold last year, and some textile enterprises still did not use some stocks of cotton reserves. As of June 1, this year, 1.12 million tons of cotton reserves have been sold. At present, 30,000 tons of cotton reserves can be invested every day. In 2017, the national cotton output increased significantly. According to the statistics of the China cotton association, the output was 6.05 million tons, up 22.5% year on year. Due to the slow sales progress in the early stage, the current spot inventory is still relatively sufficient.

Third, the effective supply of cotton textile enterprises increased. On June 2, the national cotton trading market and the China cotton reserve company announced that from June 4, the cotton reserve rotations are limited to cotton textile enterprises, and only for their own use, not for resale. According to the relevant departments, the main purpose of this adjustment is to restrain the irrational demand of non-production, increase the effective supply to cotton textile enterprises, and guarantee their demand for cotton and normal production.

Fourth, additional import cotton quota to further meet the market needs. With the gradual decline in the quantity of cotton reserves, the relevant departments have made plans in advance at the beginning of the year, and they can increase the amount of imported cotton at any time if there is demand or large fluctuations in the market. In view of the current market situation, according to the relevant departments, cotton textile enterprises will be issued a certain amount of cotton import sliding tax quota.

Fifth, the reserve cotton rotation is not limited. Relevant departments have made it clear that there is no upper limit on the total amount of cotton in reserve this year. As long as there is demand from cotton and textile enterprises, the time of rotation can be extended to the end of September. Cifa and cipc have made relevant preparations in advance, and are now speeding up the inspection process by optimizing the inspection process and changing the sampling method, so as to ensure the number of daily listing reaches 30,000 tons.

Since the beginning of this year, the production and sales of textile enterprises have been stable and moderately good, but it is also a recovery growth. The growth of cotton demand is limited, and the supply of cotton is basically sufficient.