Rising Raw Materials Affect Terminal Garment Enterprises

The price of textile raw materials such as cotton and chemical fiber has been soaring this year. Quanzhou textile enterprises have begun to shift part of their pressure to the garment enterprises downstream of the industrial chain through the way of raising prices when they are alone in digesting most of the pressure brought about by the rising price of raw materials. Insiders predict that under the pressure of high production costs, garment enterprises will inevitably raise their prices if they can not afford to carry them.

  Cotton price pressure transfer to terminal

Cotton prices rose, textile enterprises bear the brunt, but when it comes to raising prices, many textile enterprises in Quanzhou are still cautious. Chen, deputy chief of a textile enterprise in our city, admitted that, considering that many garment enterprises had just slowed down from the export situation this year, the cost pressure caused by the sharp rise of raw materials such as cotton was mostly self digesting. "From last September to now, a ton of cotton has increased by more than 4000 yuan! At present, 80% of the material used for production is cotton, and the cost pressure has increased dramatically. Because of the limited bearing capacity, we can only increase the price slightly and avoid losing money at the moment.

"Now is the peak season for the production of autumn and winter clothing in China. Under the dual pressure of rising raw material and labor costs, the cost of garment manufacturing has increased by about 10%, and the cost pressure will finally be passed to the terminal. It is expected that the retail price of autumn and winter clothing will go up this year." Zhang Qingshan, who is engaged in garment export trade, told reporters that the pressure of rising cotton prices has already been transmitted to the garment enterprises through the textile enterprises. At present, they have raised the export pricing. Whether export or domestic enterprises are facing the predicament of higher cost, raising prices will be an inevitable choice.

　 Textile enterprises worry about hot money speculation cotton

"At present, cotton has risen to a very high price." Deputy General Chen believes that apart from the gap between supply and demand, some cotton enterprises are reluctant to sell, and some enterprises are hyping, which are the important factors leading to the rise of cotton prices. Looking at prices rising all the way, textile enterprises rush to buy cotton, while cotton business enterprises are reluctant to sell them. The atmosphere is more intense, resulting in high market prices. Many cotton textile circles in Quanzhou worry that cotton prices are rising all the way. The beneficiaries are not cotton farmers, but speculators and speculators about cotton. And cotton may become another hot spot of speculation in the market in 2010, just like garlic in 2009. "Shortage" and "rise" are often the targets of speculative capital. Domestically, cotton planting area has decreased this year due to drought and other reasons. India has suspended cotton exports since April 19th. The US Department of agriculture also predicted that the reduction of global cotton stocks has become a reality. At present, the US cotton inventory is hard to maintain until the end of this year, and it needs to fill the domestic inventory gap through a large number of imported cotton.

Futures can cotton or balance the market.

The industry suggested that the state should change the single practice of storing and storing cotton from the spot market as soon as possible, while buying and storing domestic cotton in the futures market, giving full play to the pricing function of this platform and enhancing the ability of enterprises to resist risks. At the same time, under the WTO framework, we should introduce more direct support measures for cotton farmers, such as putting cotton in the scope of comprehensive subsidy for production materials, dynamically adjusting the minimum purchase price of cotton, and so doing to improve cotton farmers' enthusiasm for planting cotton.