Spring Planting Area Greatly Reduced Worry Drive Cotton Whole Line Limit Recapture Year After Fall

The African locusts entered South Asia, and the food and Agriculture Organization of the United Nations warned the world that the locust disaster may enter China through Pakistan and India, or have a greater impact on the production of agricultural products at home and abroad. On Monday, when the US financial market was closed, domestic funds were used for speculation. On Monday, the domestic cotton and rice plates were strongly stretched, and the futures of Zheng cotton and japonica rice were closed at the end of the day, and cotton yarn futures rose more than 3%. Domestic cotton futures capital interest is particularly strong, 12000 is cotton historic low price, after the festival has been out of the low cumulative increase of over 11%.

Locusts spread to South Asia, or affect the supply stability of cotton and rice in India and Pakistan.

In February 11th, the food and Agriculture Organization of the United Nations (FAO) warned the world that the world is on high alert against the locusts that are now looming, so as to prevent the food crisis of the invaded countries. FAO said that the African locusts have proliferated nearly 20 times in the known three months. If not prevented, they will continue to create disasters until June, when the number will expand to 500 times. The locust plague began in Africa, then flew over the Red Sea into Europe and Asia, and is currently in a state of threat, including Kenya, Somalia, Ethiopia, Arabia and Yemen, Saudi Arabia, and India and Pakistan in the sub continent of India.

Besides, locusts are mainly active in Africa and Arabia peninsula. Due to the limited crop yields in these areas, the actual impact is relatively limited. However, with the spread of locust plague to Pakistan and India, the supply stability of cotton and rice market poses a great threat. It is understood that in 2019, India produced 1.15 million tons of rice and 7 million 500 thousand tons of rice in Pakistan, accounting for 25% of the world's total output. In 2019, the output of cotton in India was about 6 million 420 thousand tons, and the output of cotton in Pakistan was about 1 million 440 thousand tons, accounting for about 30% of global output. In 2018, the amount of grain and cotton imported from Pakistan accounted for 1.3% and 9.6% respectively, and the amount of cotton imported from India accounted for 16.2%. However, from the food habits of locust, the main crops are wheat, corn, sorghum, rice, millet, sugar cane and so on. Cotton is not a pleasant eating plant, but if the locust plagues flood, it will not rule out eating cotton and other crops.

In addition, whether the market locust plague spread to the Chinese territory. Because of the topography of China's borders with Pakistan and India, it is very difficult for locust to be too high. In cold regions at high altitudes, locusts are unlikely to move into China from Tibet, but they do not rule out the possibility of moving from Burma to Yunnan and Guangxi in the future. The cotton producing areas in China are mainly located in Xinjiang. The probability of locusts entering Guangxi, Yunnan, and then cross to Xinjiang is very low, which has little effect on domestic cotton production.

In 2020, domestic cotton planting area decreased by 5.36%.

In February, the China Cotton Association conducted second cotton planting intentional area surveys for the designated farmers in the mainland and Xinjiang autonomous region. Affected by the new crown pneumonia epidemic, cotton farmers are not allowed to go out, which is unfavorable for early spring plowing and broadcasting. The survey results showed that the cotton planting area in China was 45 million 574 thousand and 800 mu, down 5.36% from the same period last year, and the decrease was 2.14 percentage points lower than that of the previous period. Among them, the cotton planting area in Xinjiang in 2020 was 35 million 73 thousand mu, 4.88% less than that in 2019, and the decrease was 2.8 percentage points lower than that in the previous period. The Yangtze River Basin, especially Hubei Province, was greatly affected by the epidemic. The process of resuming production in the later stage would be relatively slow. At present, the data of the cotton planting area in the river basin were tentatively settled last month, and the data were still 4 million 677 thousand and 900 mu, which was 5.30% lower than that of the previous year. The cotton planting enthusiasm in the the Yellow River river basin is not high. In addition, the impact of the epidemic is even more uncertain. The intention area is 5 million 437 thousand and 100 mu, a decrease of 8.12% compared with the same period last year (last month's data). Mid April is the key period of spring sowing. If the epidemic can not be effectively controlled before mid March, it will have a great impact on domestic cotton production.

Textile enterprises to return to work conditions gradually improved, help cotton consumption rebound

After the disadvantageous year of the new crown, textile enterprises resumed and cotton inventories increased. Terminal demand is difficult to start. Cotton national cotton market monitoring system sampling survey shows that as early as the beginning of February, the average cotton inventory utilization days of the enterprises surveyed were about 54.1 days (including the number of imported cotton to the port), an increase of 22.2 days, an increase of 9.5 days compared with the same period last year. Projections of the national cotton industry inventory of about 1 million 125 thousand tons, an increase of 69.6%, an increase of 14.1% over the same period last year. However, with the control of the epidemic, the conditions for the resumption of work are gradually improving, which will help to pick up the cotton consumption. According to the China cotton net reporter survey, at present, Nanyang, Henan province clearly started the textile enterprises in February 17th, and Jiangsu textile enterprises are expected to start officially in the middle of 2.

On the whole, in the new year's cotton planting intention decreasing year by year, Africa locusts entered South Asia, threatening the stability of global cotton supply, and with the control of the coronavirus epidemic situation, the current conditions for textile enterprises to resume work have gradually improved, which will help domestic cotton consumption rebound. The cotton planting area in China has been greatly reduced, and the supply and demand pattern has been improving. And participate in the extension of domestic cotton futures, weekly line level spring trend rising trend, multi trend should try to focus on May and September contracts.