Cotton prices are expected to benefit from the second quarter of cotton companies

Since the target price of 19,800 yuan per ton of cotton was directly supplemented on April 5, the downward trend of domestic cotton prices has continued. On April 15 CCIndex3128B reported 18,498 yuan per ton, down nearly 1,000 yuan per ton from the beginning of April. The current reserve price of national reserve cotton is down by about 2,000 yuan per ton compared with the same period of last year. Industry insiders expect cotton textile companies to benefit from the decline in the price of benefited cotton.

The domestic cotton market is a policy city, and the country has mastered the main resources for cotton supply and demand. Therefore, the current domestic cotton price is actually reflected in the reserve and reserve price of the national reserve cotton.

Right now, the state reserve cotton implementation of the throwing and storage policy for the 28th March New Deal, the contents of the standard cotton auction price 17250 yuan per ton, buy 3 tons of Xinjiang reserve cotton to obtain 1 ton reserve cotton import qualifications. Compared with the standard cotton auction price of 19,000 yuan per ton in the same period of last year, it dropped by nearly 2,000 yuan per ton.

The cost of cotton procurement accounts for about 70% of the total cost of cotton textile companies. The decline in cotton prices will increase the profitability of cotton textile companies, but in the short term it will lead to a decline in cotton inventory.

According to a March survey conducted by the China National Textile and Apparel Council in March, most cotton spinning companies have less than 30 days of cotton inventory, and at the same time speed up the digestion of cotton stocks. Individual companies only have 2 weeks of cotton inventory usage, which is used for purchase.

Several large-scale cotton textile companies told the Great Wisdom News Agency that the company had already learned that the cotton policy will be adjusted. In March, the company began to clean up its cotton stocks.

According to the current status of cotton textile enterprises' inventory, market participants expect that the stage of loss of raw material prices for cotton will soon pass. The decline in cotton prices will enhance the profitability of cotton textile enterprises in late April and early May.

Companies involved in the cotton textile business in the A-share market include: Lianfa (002394.SZ), Huafu Spun (002042.SZ), Luthai A (000726.SZ), and Shinano Textile (002087.SZ).