Cotton

Although the price is high, the support from cost is even stronger. In addition, there is impact of weather and trade on supply-demand relationship and market expectation. The enterprises show higher recognition of stronger cotton driven by tighter supply by witnessing price rise for one year. Although there are worries over downward risk brought by higher price, sharp decline of price is not expected to emerge.

Spinners increased the proportion of VSF not only because of high price and risk of cotton, but also the difficulty in cotton yarn price increase, so the adjustment was caused by heavy losses. However, most enterprises are expecting the peak season of spring and summer in 2022. If cotton is strong enough and cotton yarn is pushed up, then the spinners will be willing to produce cotton yarn by reducing losses.