facebook_pixel

Chinese Ginners Buy in Mass to Achieve Profitability

galaxylogo

Cotton harvesting in Dongguang, a major cotton-producing area in China’s Hebei province, is drawing to a close. Because profit margins are smaller this year than last year, cotton companies and ginners are making their money by buying in larger quantities.

Grade 4 seed cotton is currently being offered at 63 cents/lb (38% lint percentage, 11% moisture content), and cotton seed is sold at 17 cents/lb. The cost of grade 4 lint is around $1.44/lb (2% loss, with a $98/ton processing fee), and the reserve buying price for Type 428 (grade 4, length 28mm) is $147/lb. Those numbers show that the profit of selling cotton to government is around $68.85/ton, which is much better than selling on spot market. Ginners report that they have been accepting lower margins and relying on scale to make up for the smaller margin.

There has been a rise in seed cotton prices because:

  • there are more qualified ginners;
  • ginners have to pay more money to buy seed cotton from other places because local farmers are holding out for higher prices; and  
  • ginners have been buying better-quality cotton to meet the higher standards of the reserve.

They are currently trying their best to speed up the ginning process and sell cotton to government to realize the revenue. The spot market is sluggish, with local grade 3 cotton being sold at $1.42/lb, grade 4 at $1.39/lb, and grade 5 at $1.23/lb – all of which are essentially unchanged since last week.

For more information, please contact Jihong at Galaxy Futures.

Leave a Reply

Ginning Stories
Ginning

Ginners School Presentations Now Online

July 24, 2017

Six educational presentations from the Ginners School in Stoneville, MS are now available through the Focus on Cotton online series from the Plant Management Network and Cotton Incorporated.

Ginning

EWR’s eCotton Now Connected with John Deere API

February 24, 2017

EWR’s eCotton software is now connected with the John Deere Operations Center through John Deere’s API services.

Ginning

Fountain, Byler Receive National Ginner Awards

February 15, 2017

Kent Fountain and Rick Byler are recipients of national ginning awards for 2016 from the National Cotton Ginners Association.

Ginning

Blakemore to Lead National Cotton Ginners Association

February 15, 2017

David Blakemore has been elected 2017 president of the National Cotton Ginners Association.

Ginning

2016: The Year in Ginning

December 14, 2016

U.S. ginners continue to address quality and regulatory issues.

Ginning

Craft to Lead National Cotton Ginners Association

February 9, 2016

Ron Craft of Plains, TX, is the 2016 president of the National Cotton Ginners Association.

Ginning

Colombini, Nevius Receive National Ginner Awards

February 9, 2016

Louis Colombini and Barry Nevius have been honored by the National Cotton Ginners Association for their distinguished service to the ginning industry.

Around The Gin
Product News

Direct-to-Grower Independent Seed Company Launched

October 20, 2017

A new direct-to-growers seed company is entering the market to provide growers with custom-crafted seed offerings delivered to their farm.

Product News

INTL FCStone Offers Online Tool for OTC Hedging Strategies

October 17, 2017

INTL FCStone Markets, LLC has introduced a new online pricing tool that provides users open access to the firm’s structured products pricing portfolio.

Product News

Americot Team Continues to Grow

October 6, 2017

Americot continues to expand the company’s sales and technical support team, with the addition of six new specialists located throughout the Cotton Belt.

Product News

NemaStrike Technology Ready for Nematode Control in 2018

October 6, 2017

Monsanto adds NemaStrike Technology as a new seed treatment solution to control nematode species across the Cotton Belt.

Product News

Americot Adds Three to Regional Sales Force

September 20, 2017

Americot, Inc. has added three new regional representatives to the company’s sales force.

Product News

Enlist One Herbicide Added to Enlist System

September 13, 2017

Dow AgroSciences adds a straight-goods 2,4-D choline herbicide for additional tank-mix flexibility in Enlist crops.

Product News

Elevore Herbicide Registered for Burndown Use

August 30, 2017

Dow AgroSciences’ Elevore herbicide has received federal registration for use in fall and spring burndown programs for cotton, soybeans and corn.

Product News

Stoneville Legacy Club Honors Charter Members

August 24, 2017

The new Stoneville Legacy Club honored 129 growers who recorded average yields of 1,794 lbs/A or higher on at least 20 acres with Stoneville cotton varieties.

Latest News
Ginning

Ginners School Presentations Now Online

July 24, 2017

Six educational presentations from the Ginners School in Stoneville, MS are now available through the Focus on Cotton online series from the Plant Management Network and Cotton Incorporated.

Ginning

Texas Cotton Gin to be Country’s Largest

June 16, 2017

A $14.5 million expansion will make the Adobe Walls Cotton Gin in Spearman, TX the largest cotton gin facility in the U.S.

Ginning

Number of Active Cotton Gins Up in Arkansas

May 11, 2017

While the number of cotton gins has declined in Arkansas since 2000, the number of active gins increased by five in 2016.

Ginning

EWR’s eCotton Now Connected with John Deere API

February 24, 2017

EWR’s eCotton software is now connected with the John Deere Operations Center through John Deere’s API services.

Ginning

Fountain, Byler Receive National Ginner Awards

February 15, 2017

Kent Fountain and Rick Byler are recipients of national ginning awards for 2016 from the National Cotton Ginners Association.

Ginning

Blakemore to Lead National Cotton Ginners Association

February 15, 2017

David Blakemore has been elected 2017 president of the National Cotton Ginners Association.

Ginning

2016: The Year in Ginning

December 14, 2016

U.S. ginners continue to address quality and regulatory issues.

Ginning

Craft to Lead National Cotton Ginners Association

February 9, 2016

Ron Craft of Plains, TX, is the 2016 president of the National Cotton Ginners Association.

Ginning

Colombini, Nevius Receive National Ginner Awards

February 9, 2016

Louis Colombini and Barry Nevius have been honored by the National Cotton Ginners Association for their distinguished service to the ginning industry.

Ginning

New GinFast System Packages Bales without Strapping

January 26, 2016

Signode’s new GinFast bale packaging system protects and contains cotton bales in a single consumable bag without wire or strapping.

Ginning

An Unsung Hero of Ginning Efficiency

May 6, 2015

Don Van Doorn gave the ginning industry 68 years of innovation.

Ginning

Ginner School Registration Now Open

March 16, 2015

Registration and information regarding the three 2015 Ginner Schools – including the first session in Lubbock, TX on April 6-8 – is now available online.

Ginning

U.S. Still Struggles with Contaminated Cotton

March 3, 2015

Growers have a vested financial interest in solving cotton contamination problems.

Ginning

NCGA Honors Kelley, Lange and Maguire

February 13, 2015

The National Cotton Ginners Association honored Richard Kelley, Mark Lange and John Maguire with the association’s top awards during its recent annual meeting.

Ginning

NCC Survey Projects 9.4 Million Acres of U.S. Cotton in 2015

February 7, 2015

U.S. cotton producers intend to plant 9.4 million acres of cotton in 2015 – down 14.6 percent from last year – according to the NCC’s annual Early Season Planting Intentions Survey.