In the center of this round of government price regulation storm, soaring cotton Turning around overnight, the five day plunged 21%. The market is expected to have room for further decline. The biggest myth of this year is over.

The ICE cotton is the best performance of this year's CRB commodity index, and its price has risen nearly 65% so far this year. The price of domestic cotton futures doubled in just four months, reaching a record high and entering the thirty thousand era. Insane The cotton price has caused a chain reaction in the chain of cotton yarn, grey cloth, fabric, garment manufacturing and so on, and the cotton picking war has been wildly staged all over the country.

The contradiction between supply and demand and capital push are generally regarded as the main reason for the current cotton boom. The price of cotton has been low for a long time, which has dampened cotton growers' enthusiasm for planting cotton, resulting in a sharp reduction in cotton planting area. The contradiction between supply and demand imbalance has been concentrated this year.

November 10th is an important part of the cotton futures market. Inflection point "The main 1105 contract, which hit a record high of 33720 yuan in November 10th, fell to the lowest level of 26100 yuan, or 22.6%. In the craziest 5 days, prices plummeted by 21%.

On the spot side, the spot price of cotton fell to 27 thousand yuan / ton, and seed cotton purchase price also plummeted, and some areas dropped by more than 1 yuan / Jin. It has been reported that more than 80% of the regular cotton enterprises have stopped purchasing processing, and the market is scarce.

The reason is, on the one hand, the fear of high prices in the market. On the other hand, the national stability and the price of agricultural products have increased significantly. Inflation expectations have become the most important solution to China's macroeconomic problems.

Due to soaring cotton prices this year, downstream exports and production difficulties, part of the textile enterprises to stop production. "The phenomenon of reduction in production is becoming more and more serious, which restricts the uplink of cotton prices." Yongan futures said. Against this background, the most frantic cotton this year has become the focus of government regulation.

Premier Wen Jiabao chaired the executive meeting of the State Council on 17 April. In view of the current cotton market situation, we proposed to increase the external spanport capacity of Xinjiang cotton. We should strengthen supervision over agricultural futures and electronic trading markets, curb excessive speculation and ban illegal spanactions. When necessary, temporary intervention measures should be applied to important daily necessities and production materials.

"The state's regulation and control policy on the cotton market and the domestic macro-control policy are the core of the current situation." Hongyuan futures believes that "the NDRC and other ministries and governments may be in line with the measures to control prices rising and entering the Taiwan market, especially increasing penalties for the speculation of cotton, which will constitute a strong deterrent to the behavior of spot hoarding and other behaviors."

Mid term Shanghai also pointed out that the price of agricultural products, including cotton, has increased significantly in recent years, and there is still a possibility of a new policy in the future. Therefore, it is not yet clear that the bottom of cotton has already appeared.

However, some analysts believe that the shortage of supply will limit the downward trend of cotton prices. China's cotton market detection system, 17, said that due to bad weather, cotton production in China could be reduced by 5.5% to 6 million 360 thousand tons this year. Cotton quality is also adversely affected. Cotton planting area is 75 million 680 thousand mu this year, 1.1% less than last year. The average yield per mu is 84 kg, 4.4% less than that of last year.

But the tight supply of cotton will probably improve significantly in 2011. According to the latest report of the US Department of agriculture, the cotton planting area in the United States will expand by 18% next year, India and Pakistan will grow by 14%, while Australia's planting area will double.