Big market! What do professionals think about the quota of cotton when it comes to the ground?

On April 12, the NDRC issued an announcement on the application for import quota of additional preferential tariff rate for cotton tariff quota in 2019.
It is understood that the amount of import cotton slip allowance tax quota issued this time is the same as last year, which is 800,000 tons. The difference is the time when the policy was introduced. Last June, just when the weather hyped insufficient output, the cotton experienced a bull market.
Industry insiders should be aware that cotton prices have been in the doldrums for a long time since the end of last year. However, since April, when the main cotton producing areas in China entered the stage of preparation for sowing, the domestic spot cotton prices have risen sharply one after another, and Zheng cotton has been harvesting the sun for many consecutive days. Even in the night trading on the day when the NDRC issued the announcement of 800,000 tons of cotton import quota, both Zheng cotton futures price and international market cotton futures price increased substantially. What happened to the market? How to interpret it?
The issuance of 800,000 tons of slip duty quotas for cotton imports has attracted a wide range of market interpretations:
[CITIC Construction and Investment Futures] The sliding allowance tax quota landed and the driving force of cotton was strengthened.
On the surface, the import volume will increase in the future, and the contradiction between production and consumption will be further eased, but the sliding tax price is difficult to have an advantage over the domestic 3128B index price. Combining with the situation at this time and place in previous years, the reserve cotton wheel disappeared, but the sliding allowance tax quota was reported ahead of time. It is difficult to hide the market's concern about the low national reserve cotton inventory and continue to support the rising trend of Zheng cotton.
The influence of the rotation of national cotton storage on the market will be weakened in the future. The domestic cotton market will be driven mainly by the external cotton market. From the USDA April Outlook Report, it can be seen that although Turkey's cotton consumption has slowed down due to its own economic situation, global consumption is still showing a steady growth trend. With the reduction of production in India, the United States and Pakistan in 18/19, the international cotton market continues the general trend of inventory depletion and forms a strong support for domestic and foreign cotton markets. The demand situation of domestic cotton market still needs to be further improved. Although the cotton price is rising, the downstream situation has not changed significantly. The turnover of textile enterprises is slow, the stock intention of raw materials is general. In the short term, the cotton spot price is weak in the range of 15600-16000, and the hedging pressure is obvious near the top of 16000. It is suggested that we should not catch up with the hedging pressure. More orders can stop earnings partially, and more than 909 contracts can be arranged at the low of 15600.
[China Cotton Net] 800,000 tons of cotton import quota & ldquo; stimulating, difficult blowout & rdquo;.
Firstly, Sino-US trade negotiations will continue in full swing in April/May. Although the good news will continue to be released, everything is unknown before the agreement is signed. When will the NDRC decide to issue 800,000 tons of cotton import quota or wait for the outcome of negotiations between China and the United States?
Secondly, the competitiveness of foreign cotton has declined under the sliding tariff, and textile enterprises will purchase & ldquo; goods ratio three & rdquo;
Thirdly, the sliding tariff quota was postponed to 6/July, and the focus of cotton enterprises'attention and contract will turn to 2019/20. From the perspective of market supply, only Indian cotton and Mexican cotton are available except American cotton (Australian cotton has been basically sold out, Brazilian cotton has low flower quality and poor spinnability in the later period). India's S-6, J34 and MCU5 bonded volume may not be sufficient after June.
Fourthly, the domestic cotton supply is relatively adequate and whether the cotton reserve will rotate in 2019 is still a variable. According to the survey data of Logistics Branch of China Cotton Association, the total commercial inventory of cotton in China at the end of March was 4.164 million tons, 40% less than last month.Be observant and careful.