Machine-picked seed cotton in South Xinjiang started to arrive on the market during the National Day holiday (Oct 1-7), and prices have been constantly rising from end Sep to Oct 8. The mainstream prices of hand-picked seed cotton once reached to 11.4-11.6yuan/kg and that of machine-picked seed cotton approached 10.8-11.07yuan/kg. Zhengzhou cotton futures market hit new highs. Under such condition, the government released a series of policies to cool down the market, and relative institutions and departments in Xinjiang required some large state-owned enterprises to cut prices of seed cotton. Agricultural Development Bank of China and some local banks required to increase the margins on ginning factories. The seed cotton procurement progress slowed down somewhat, and some ginning factories stopped purchasing. Prices of seed cotton declined correspondingly. The prices of machine-picked seed cotton in South Xinjiang declined to 10-10.3yuan/kg. Nevertheless, the seed cotton prices are still in fierce competition currently. According to CCFGroup, the machine-picked seed cotton prices in North Xinjiang recovered to 10.5yuan/kg in recent two days, and harvest-rush appeared again. Recently, the prices of seed cotton in Xinjiang are volatile, luring much attention, and influencing the market sentiment. Therefore, we make a brief analysis on the seed cotton procurement in some regions of Xinjiang.
Firstly, we review the notary-inspection in Xinjiang last year, taking some reference for relative survey.
In 2020, 486 inspection institutions from 9 regions of North Xinjiang took part in the notary inspection, with a volume of 2.8001 million tons. The proportion of Tacheng Prefecture accounted for the largest, reaching 21.55% and having a quantity of 603.5kt. The proportion of Shihezi, Kuitun, Wujiaqu, Changji and Bortala reached above 10% respectively, with a quantity of above 300kt separately. Turpan had the smallest proportion of 1.14%.
In South Xinjiang, there were 442 inspection institutions from 6 regions in 2020, with a total quantity of 2.9683 million tons. Aksu, Kashgar and Bayingol Mongolian Autonomous Prefecture took the largest proportion of 79.25%, with a quantity of 2.3522 million tons.
Therefore, we trace the seed cotton procurement condition in these regions recently.
| North Xinjiang | machine-picked, yuan/kg | cotton costs calculated from seed cotton price, yuan/mt | cotton costs surveyed from ginners,yuan/mt | machine-picked cotton offers, yuan/mt |
| Turpan | 10.7-10.9 | 25340-25880 | - | - |
| Karamay | 11 | 26100 | 26000 | - |
| Bortala Mongol | 10.2-11 | 23990-26100 | - | - |
| Changji | 10.2-10.8 | 23990-25600 | 24000-25000 | - |
| Wujiaqu | 10.5-10.7 | 24800-25350 | 25000-26000 | - |
| Kuitun | 10.4-10.7 | 24500-25350 | 25000-26000 | - |
| Shihezi | 10.3-10.7 | 24250-25350 | 24000-25000 | 25000 |
| Tacheng | 10.5-11 | 24800-26100 | 25000-26000 | - |
In recent two days, machine-picked seed cotton prices in North Xinjiang recovered obviously. In Tacheng, the local prices were in the range of 10.5-11yuan/kg, and cotton costs on theory were about 24,800-26,100yuan/mt conditioned weight. Prices in Wusu of Tacheng were relatively higher, highly at 11yuan/kg, while prices in Shawan was relatively low, mostly at around 10.5yuan/kg. In addition, prices in Changji were at 10.6-10.8yuan/kg. In Turpan, prices were largely at 10.7-10.9yuan/kg. Therefore, the new cotton costs in North Xinjiang were mostly at 25,000-26,000yuan/mt, lowly at 24,000yuan/mt. As the costs were higher than that in South Xinjiang, new cotton offers remained limited. In Shihezi, there were offers of machine-picked cotton at 25,000yuan/mt.
| South Xinjiang | Bayingol Mongolian | Kashgar | Aksu |
| hand-picked seed cotton, yuan/kg | 11.4-11.6 | 11-11.6 | 11-11.5 |
| cotton costs calculated from seed cotton, yuan/mt | 24680-25200 | 23700-25200 | 23700-25000 |
| hand-picked cotton offers | 23800-24000 | - | 24000-25000 |
| machine-picked seed cotton, yuan/kg | 10.3-10.7 | 10.2-10.8 | 10.2-10.7 |
| cotton costs calculated from seed cotton, yuan/mt | 24250-25350 | 23990-25600 | 23990-25350 |
| machine-picked cotton offers, yuan/mt | 22800-23000 | 23500-23800 | 23700-23800 |
In South Xinjiang, we mainly trace three regions of Aksu, Kashgar and Bayingol Mongolian Autonomous Prefecture. The prices in South Xinjiang have not been volatile like North Xinjiang. For hand-picked seed cotton, prices in the three regions were around 11.3yuan/kg, and were going upward, to 11.5-11.6yuan/kg. In Kashgar, local ginning factories started to offer new cotton prices, at 23,800-24,100yuan/mt for cotton for wadding (civilian use). For machine-picked seed cotton, the prices were around 10-10.5yuan/kg, and there were no big differences among the three regions. Prices in Aksu were flat overall, mostly at 10.6-10.7yuan/kg. Machine-picked cotton offers were mostly at 23,500-23,800yuan/mt in three regions, lowly at 23,000yuan/mt.
In general, some ginning factories slow down the purchase of seed cotton or even stop purchasing currently. Prices of machine-picked seed cotton in North Xinjiang and South Xinjiang narrowed previously, but enlarged again in recent two days. Prices in North Xinjiang were relatively mixed, and new cotton offers were limited. Seed cotton prices weakened somewhat after a series of policies, but continued to go higher later. The buyers and sellers are undergoing price game, and the development of seed cotton procurement remains to be concerned later.
Source: ccfgroup.com