Analysis Of Cotton Price Trend In 2021

　　 In 2021, the market has a lot of expectations for the commodity market. Driven by the outbreak of the global epidemic, the past year has been a year of great investment opportunities. The market trend has opened and closed, and the cotton market has risen from a low point around 10000 yuan / ton to 15500 yuan / ton, an increase of more than 50%. Of course, it is the internal logic of supply and demand that supports such drastic fluctuations in cotton prices, and the changes in the logic of supply and demand direct the play.

　　 The outbreak of the epidemic, cotton prices fell sharply

In the first quarter of 2020, the domestic epidemic situation suddenly broke out, and different prevention and control measures were taken in different places. Most enterprises were limited in starting operations, and cotton demand would reach freezing point. Market sentiment became more pessimistic, but also gave institutions a good short opportunity, until the cotton price into 10000 yuan below the threshold. In history, the price of Zheng cotton has only fallen below 10000 yuan twice, in 2016 and 2020 respectively. Even under the outbreak of the global financial crisis in 2008, it still held firm at 10080 yuan / ton.

Zheng cotton's epic decline is due to the epidemic situation leading to almost stagnation of demand. Under the extremely pessimistic mood, the cotton price finally stopped falling, this is the truth that the extreme will reverse. Of course, from the other side of the reflection, "flying knife" operation is also a very high risk operation. As a saying goes, "long opportunities fall out, short opportunities rise.". With the continuous improvement of domestic control effect and the gradual recovery of stagnant consumption, funds have finally responded, and cotton prices have since started a raging upward trend.

In this round of general trend, there will be countercurrent in the middle, and there will be a lot of countercurrent, resulting in the fluctuation pattern of K line. Looking back on the market at that time, many investors insisted that the price of cotton was difficult to rise sharply because of Sino US economic and trade relations and the suppression of cotton price in Xinjiang, but the reality was that the cotton price rose steadily. In fact, what really affects cotton prices is the change in the logic of supply and demand. Market sentiment can only determine for a moment, but cannot change the trend.

　　 Cotton price begins to counterattack due to multiple factors

The rise of commodities can not be separated from the release of water from global central banks. In order to relieve the problem, governments of various countries can only print a large amount of money to put into the market. Of course, the consequence is inflation. This behavior is helpless, otherwise the consequences will only be more serious. In the face of global central bank "water" situation, short can only be looted. From a micro perspective, the logic of cotton supply and demand has also changed compared with the first quarter of last year, because with the accelerated spread of the global epidemic, China was the first to control, prompting us to become a global factory. Since the third quarter of last year, China's industrial and consumer products are facing strong import and export.

This change in the logic of supply and demand was unexpected in the early days. Under the condition of the global epidemic spreading, it is not how much consumption has increased, but the global orders have turned to our country. Because of the best control of the epidemic situation and the safest products, it will be favored. The customs data is the best evidence. From January to November 2020, China's textile and clothing exports amounted to 265218.3 billion US dollars, an increase of 9.91% over the same period of last year. Among them, the cumulative export volume of textiles was 141.651.4 billion US dollars, with a year-on-year increase of 31.01%.

No one can answer exactly how long this situation will last, because we don't know whether the epidemic will repeat or not. At present, there have been mutations. We need further research and experiment on the effect of the vaccine on the mutated virus. We believe that we will have a definite result soon.

　　 Global epidemic situation improved, supply and demand pattern expected to change

Of course, according to the forecast results of experts, it is expected that the global epidemic situation will be controlled and improved in the first half of 2021. On the contrary, we need to be vigilant about this, because the improvement of global epidemic situation is likely to cause adverse situation to some domestic commodities, including cotton. At present, all countries in the world are actively vaccinating. Once the global epidemic situation is controlled, the previously closed doors of various countries will be opened one after another, which will increase the pressure of domestic epidemic prevention and control, and the virus transmission rate may increase significantly, so the situation of epidemic prevention and control is more severe.

In addition, from the perspective of cotton, the global epidemic situation is gradually improving, and global consumption will also usher in a retaliatory rebound just like the domestic earlier stage. The power of the outbreak of demand that has been suppressed for a year cannot be underestimated. Unfortunately, the profits of Chinese enterprises may be limited in this global consumption feast. After the epidemic situation is under control, a large number of textile and clothing orders will be transferred to our main competitors, India, Pakistan and Southeast Asia. According to the latest news, Pakistan's textile and garment production is booming, and the export demand has entered the best period after the epidemic situation. Brands and retailers have begun to shift their purchasing sources to Pakistan, and the production of knitted garments and ready-made garments has reached full capacity. At the same time, some Chinese orders have begun to flow to India, and India's fancy yarn exports are also very strong.

At present, Zheng cotton futures has approached 15500 yuan / ton, which is bound to be a great pressure. Once the breakthrough is made, it will continue to rise to the next high point. If the vaccine effect is obvious, in the global economy strong recovery to the next, foreign cotton prices will certainly come out of a bright curve. Since the outbreak, in the case of shrinking consumption, the support of foreign cotton prices has always been stronger than that of domestic cotton prices, mainly because China's large-scale procurement has played an important role. Once the foreign demand for cotton increases significantly, the situation of relatively tight domestic supply will become more prominent. Driven by the sharp rise in foreign cotton prices, domestic cotton prices will inevitably rise. Although the "black swan event" will still appear, from the perspective of consumption recovery background, Zheng cotton is expected to continue to rise in the first half of 2021, and it is likely to duplicate the situation of resonance rise of cotton prices both inside and outside 2020.

The above is the author's prediction, for reference only. The top position of cotton has not been revealed, there are still some investment opportunities, but the opportunities like 2020 are gone.