Cotton** Calls for Product and Institutional Innovation

“This year is the first year that the country implements the cotton target price reform. The market environment has changed, and the risks and uncertainties are increasing. It is precisely this that cotton needs to play its role as a hedging tool.” Research Institute of Market Economy, State Council Development Research Center Director Ren Xingzhou believes that the purpose of the country's implementation of the cotton target price pilot is to play a decisive role in the deployment of cotton resources on the premise of guaranteeing the reasonable return of cotton farmers. The target price for cotton in the new year has now been set at 19,800 yuan/ton, but the market price also depends on the market to explore.

Ren Xingzhou said that under the new policy situation, more tools are needed. ** The market is a market with a relatively high degree of market. The price of cotton ** as the price formed by the parties' transactions in the market is a true reflection of the relationship between market supply and demand. Therefore, the price of cotton ** is determining the cotton market price and improving the cotton subsidy mechanism. It will also play an important role.

According to industry insiders, in the future, with the expansion of restrictions on the use of agricultural production by the Agricultural Development Bank, the introduction of tools such as cotton and cotton options, and the further improvement of the set-up of the cotton delivery warehouse, the cotton fighter will reappear in a giant style.

“Under the premise of controllable risks, study and establishment of the Xinjiang Cotton Delivery Repository.” Xiao Yuqing, general manager of Xinjiang Cotton Industry Group Co., Ltd. suggested that Xinjiang’s cotton production is of good quality and it is hoped that Zhengzhou will set up a circulation warehouse for cotton delivery as soon as possible in Xinjiang. Cotton companies can more easily participate in the hedging of cotton **, use ** to manage cotton price risk, improve cotton quality, and promote the development of Xinjiang's cotton industry.

Wang Wanxiang, general manager of China Cotton Group, said that this year, the country's implementation of the target price pilot has laid a foundation for the ** function. Under the new market conditions, on the one hand, it is hoped that Zhengzhou will further improve the relevant rules and regulations, expand the position limits, and meet the hedging requirements of spot enterprises. It is recommended that while guaranteeing the quality of cotton standard warehouse receipts, the free flow of standard warehouse receipts should be implemented; On the other hand, more efforts were made in market promotion to involve more cotton-related enterprises in the cotton market. “In an open and fair market environment, the more companies that participate, the more effectively they can play the role of the market.”

Under the new policy and market conditions, in order to better serve the real economy and cotton-related industries, the market is also calling for more product and institutional innovation. Ma Wensheng, chairman of the new lake, said that it should step up the introduction of cotton options. “Using the United States as an example, options were earliest used in the US grain agricultural products market, and spot dealers and farmers achieved the purpose of hedging and hedging by participating in options trading. It is recommended that Zheng Shang Institute can learn from international advanced experience and try to introduce cotton options. The cotton price risk will be transferred and decentralized through option trading to enrich China's capital market risk management tools and serve the cotton price formation mechanism in China."