At the beginning of 2009, the Spring Festival draws near making the purchase and sale of the cotton market in the doldrums and speculative light. And the external economic environment has not yet significantly improved, coupled with the Lunar New Year holiday a week ago, the transaction relying on the Internet transmission subjected to a large number of attacks, the National Reserve to suspend collection of cotton. In the absence of cash support, the Zheng cotton price on the red period of more fatigue, lower center of gravity gradually. The NYBOT cotton futures prices in the next cotton-growing area of macroeconomic uncertainty and has not been improved, thereby affecting cotton consumption circumstances, at the beginning of 2009 remained at 45 cents -53 cents to run between the shocks, but the level of activity on Zheng than domestic cotton higher.

The current international situation has not significantly been improved, then the next period of time, cotton price can break through the existing pressure, out of a rising market it? Here, the author on the current status of the domestic cotton to do a brief analysis.

First of all, from the current macroeconomic environment to analyze.

From the macro fundamentals, there is no fundamental improvement. The United States in December the unemployment rate rose to about 16-year high; manufacturing index fell to 32.4, the lowest since 1980; December Eurozone economic sentiment index fell to a record low of 67.1; the euro zone published in December manufacturing PMI was 33.9, a record 11-year history of the survey was the lowest since records; China in December manufacturing PMI was 41.2 for the index since the low times. Bad macroeconomic fundamentals, resulting in commodity futures prices has good performance, it is very difficult.

In addition, Eurostat released January 7, the euro zone in November PPI fell 1.9 percent monthly rate. Monthly decline of 1981 to the largest. European Central Bank on the 15th announced that it would cut benchmark interest rates by 50 basis points, to 2.00 percent, in line with expectations. Since October 2008 has been since the ECB to cut interest rates four times, a total of 2.25 percentage point decline. European Central Bank Deputy Governor Papademos expressed the need to further cut interest rates to protect economic growth and to ensure that inflation is not reduced to low levels, and stressed that should be to avoid deflation.

Secondly, from the cotton of its own fundamentals to analyze the situation.

1, from the global supply and demand situation

USDA in 2009, the first global cotton supply and demand forecasting monthly report substantially lower the 2008/09 annual global cotton production, consumption, import and export trade volume, at the end of stocks increases. 2008/09 is expected to total global cotton production 23,914,000 tons more than in 2007/08 to reduce 2.33 million tons or 9.7%. Total global consumption of 25,091,000 tons over last year to reduce 1,621,000 tons or 6%. Global substantially reduced the volume of import and export business, of which only China is expected to import 1.63 million tons, 327,000 tons reduced.

The report also showed that the U.S. 2008/09 cotton production estimated at 13.04 million bags, ring than 4 percent reduction, year on year reduction of 32%. For China, USDA supply and demand report shows that China’s cotton production for 2008/09 estimated at 36.5 million bales forecast for imports of 7.5 million bales estimated for consumption of 49.5 million bales forecast for year-end inventory package 17930000.

In addition, ICAC released the latest report shows an: 2008/09 year, the global textile and cotton is estimated to be 24,500,000 tons, representing a 7 percent drop in 2007/08. Which appeared the most significant decline in China, is expected to decline 10 percent, to 9,800,000 tons. Mainland China is the largest cotton consuming country, accounting for 40% of global consumption. Secondly, the third largest consumer of India and Pakistan are also expected to decline in consumption.

2008/09 year, the global cotton textile production capacity is estimated to be 24,100,000 tons, representing a 8.12% decline in 2007/08. At the same time, expected the United States in the 2008/09 year’s production will be reduced.

Due to the global decline in the volume of cotton, the volume of trade in 2008/09 is expected to decline 17 percent, fell to 6,900,000 tons. This will be the six lowest level since the year. Especially China, will be reduced to 1,500,000 tons, compared with the previous year to reduce the one million tons.