Cotton Industry Chain Tracking: The Highest &Nbsp; Cotton Farmers Are Most Vulnerable.

Affected by the weather, 2010 is the last year of cotton planting in recent years.

Starting from the national day of 2009, cotton prices like runaway wild horses are irresistible.

At present, Dezhou cotton price has exceeded 4 yuan / Jin mark, and reached the highest peak in history.

However, high cotton prices did not bring enthusiasm for cotton growers.

Under the challenge of rising grain prices and vegetable prices, local cotton farmers in Dezhou began to abandon cotton.

Cotton planting in Dezhou fell to a low level in ten years this year, which in turn has further promoted cotton prices.

The rising cotton prices have begun to flow to downstream weaving and clothing industries.

Dilemmas of cotton farmers

May is the season for cotton sowing.

At this time of the year, cotton farmers had already sold out.

This year only in May 24th did Zhao Zhimin open the agricultural tricycle and sell cotton vigorously.

Zhao Zhimin is a native of Zhao Zhuang village, an old town in Wucheng County, Dezhou. It has two mu of land, and all of them grow cotton.

Last year, Zhao Zhimin's family collected two catties of more than 800 Jin of cotton, less than 1/5 in previous years.

But in his words, these more than 800 kilograms of cotton are "precious" than ever before.

Dezhou is one of the four major cotton producing bases in China. Cotton planting area accounts for more than half of the total cotton planting area in the United States.

Last September was the harvest season for cotton farmers, but the rainy weather for many days reduced cotton production by more than 20% in Dezhou.

The cotton price has also started from the national day of 2009, like a runaway wild horse - seed cotton has surged from 3.1 yuan to Jin.

Zhao Zhimin pointed to the cotton after the bucket and said, "when the cotton price rises and rises, most of the farmers in the surrounding villages do not want to play. Before the Spring Festival, the seed cotton has risen to 3.6 yuan / Jin, which is a rare high price in the past more than 10 years."

So Zhao Zhimin sold more than 300 Jin.

Now, he feels a little regret, because cotton price has soared to 4 yuan / Jin.

Selling or not selling has been troubling the Zhao Zhimin family for half a year.

To this end, he had a quarrel with his wife.

Zhao admitted that cotton prices had risen for so many days.

Seeing that cotton prices broke through 4 yuan / Jin mark and reached the highest point in history, Zhao Zhimin could not sit still.

After deliberation with cotton farmers in the same village, although many cotton farmers still cling to it, he felt he should sell all the remaining 400 Jin.

However, the soaring cotton prices did not allow Zhao Zhimin and the cotton farmers of the same village to firm up their cotton determination.

Before planting at the end of April, Zhao Zhimin's family even planned to replant chili peppers.

Zhao Zhimin calculated an account. Last year, a total of 400 catties of seed cotton were collected per mu. Even if the price was sold at a high price of 4 yuan per catty, there would be a revenue of 1600 yuan a year.

However, the operation rate of cotton seed machinery is low, labor and employment are much, and pesticide is sprinkled on the 4 day. Besides, fertilization, watering, picking and weeding are also needed.

Most of the rural laborers go out to work, and the cost of hiring them is higher, with only a thousand yuan per mu of net income.

Wucheng county is the main producing area of chili pepper. This year, the price of pepper is relatively high, which is more than 7 yuan per catty. According to the average yield of 700 Jin, the output value of Mu is about 5000 yuan, the cost of planting is 450 yuan and the cost of hiring people is 300 yuan, the net income of Mu is 4250 yuan, and the income is 3000 yuan more than that of cotton seed.

"Even grain is higher than cotton seed income."

Zhao Zhimin complained that his brother's family planted a quarter of wheat a year (an average yield of 1000 Jin) and a quarter of corn (an average yield of 1100 Jin).

Because of the high degree of mechanization of grain production, light labor intensity and less employment, net income of more than 1300 yuan per mu is two hundred or three hundred yuan more than that of seed cotton.

There are nearly two hundred villagers in Zhao Zhuang village, and more than 60% of them are cotton farmers.

Many farmers in the village have changed their Capsicum or grain.

Zhao Zhimin said that whether he was growing cotton or pepper this year really embarrassed him for a while.

But in the end, he still thinks that the price of pepper this year is related to influenza A and H1N1, so it will be difficult to maintain high prices in the future.

After all, there are more than 10 years of experience in planting cotton.

Zhao Zhimin's experience is only a microcosm of Dezhou's cotton farmers.

According to the statistics of Dezhou Cotton Association, the original cotton area in Dezhou was nearly 3 million mu, which was affected by factors such as low cotton prices in 2008, high price of agricultural materials, and lower comparative benefits of planting cotton. In 2009, the area of cotton planting was reduced to 2 million 320 thousand mu, 19% lower than that of last year.

As of May 2010, cotton planting in Dezhou was over, and the area of cotton planting decreased by 10%, to 2 million 100 thousand mu, to the lowest level in ten years.

Ma Junkai, Secretary General of the Dezhou Cotton Association, pointed out that the price of the vegetable and the rise of grain prices this year have made the cotton farmers replant more, and the cotton planting area has fallen by 10%.

The decrease in seed cotton, in turn, will push up cotton prices further, and it is expected that cotton prices will likely continue to climb this year.

Facing the further enlargement of the supply and demand gap, Mei Yong, director of the China cotton storage information center, also said at the Shandong cotton Forum recently held that China entered the era of high cotton price in 2010.

Selling and snapping up

Zhao Zhimin sold cotton to Wucheng Yinhai cotton processing plant. According to the quality of cotton, Yinhai cotton processing plant bought 400 catties for its price of 3.9 yuan per catty.

Yinhai cotton processing plant in Wucheng county was founded in 1997. It has cotton processing, develping, oil pressing and deep processing equipment, with fixed assets amounting to 10 million yuan and 210 employees. It purchased 5000-8000 tons of lint annually, and the output value was 120 million yuan.

Zhao Zhimin's seed cotton was sold to the processing plant and was processed into a cotton mill sold to Anhui and Jiangsu.

Qiu manager, who is responsible for the cotton harvest, told reporters that for the processing plant, the upstream cotton production and farmers' reluctant sale this year are facing the shortage of raw materials. The price of lint cotton has risen from 13 thousand yuan per ton to 17 thousand and 800 yuan, which has risen by more than 30%.

This has attracted the frantic rush of processing factories.

Wuzhuang County, Yang Zhuang Township, has the largest cotton market in Dezhou. There are 286 cotton processing enterprises and deep processing enterprises around here, and Yinhai cotton processing plant is one of them.

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Zhao Xianchun, director of the enterprise management office of Yang Zhuang Township, said, on the one hand, cotton farmers are reluctant to sell, on the other hand, cotton mills rush to buy.

Due to the remote location of Yang Zhuang Township, located in the western part of Shandong and in Hebei, the cotton purchasing and selling peak season at the end of last year to the beginning of the year, the major cotton processing plants sent people to cotton production areas around Dezhou and cotton production areas such as Dongying, Hebei and Henan.

Qiu said that after the company sent dozens of people to Dezhou and surrounding provinces and cities to rush to buy cotton.

Because if sitting in a processing plant, cotton was robbed by competitors.

But even so, Yinhai's cotton processing plant this year acquired a total of more than 4000 tons of cotton, more than 1/3 less than in previous years.

However, cotton prices now exceed 4 yuan per kilogram, making processing enterprises also in a dilemma.

At present, the profit and loss balance of the cotton plant is 3.8 yuan per catty, and the cotton processing plant in Yinhai is not profitable to buy Zhao Zhimin's cotton.

Qiu pointed out that as the price of lint rose, the cotton that had been processed before the company began to sell.

The newly acquired cotton will not be profitable until the market price goes up further.

He believes that cotton prices have reached their climax, and that the future market is difficult to measure.

When the economic crisis caused cotton prices to plummet in 2008, hoarding cotton merchants lost all their money.

Today, cotton prices have broken through the record highs, and cotton producers are beginning to hoard cotton.

Yang Zhuang township government official told reporters that local cotton traders mostly "profit processing" mode.

There was a processing plant in October 1st last year to eat 13500 tons per ton of more than 300 tons, now 17500 yuan, only cotton hoarding can have a profit of about one hundred thousand yuan.

Wang Xiuqing, general manager of Wuhan City Hou Feng cotton industry company, is convinced that cotton prices will only rise or fall after breaking through the 4 yuan mark.

He just returned from the 2010 Cotton Industry Summit Forum in Shandong province.

Wang Xiuqing believes that the United States and India are both big exporters of cotton.

Since 2007, the US cotton production has been cut down for a long time. India, the second largest source country of China's cotton imports, is also controlling the export volume to ensure its cotton demand.

It is an indisputable fact that China has become the "largest gap" in the world's cotton industry.

At present, local cotton traders generally have 10% of their inventory, and the price of cotton has continued to rise.

It is reported that the decline of cotton planting area and the decline of production in China have become a serious reality from the prediction of the original organization.

The area of Hebei, Henan, Shanxi, Hubei and Jiangsu decreased by 7.1%, 8.7%, 18.3%, 12.3% and 11% respectively, while the decline in the northern part of Xinjiang was more than 25%.

Wang Xiuqing disclosed to reporters that since last September, the company has acquired more than 3000 tons of cotton, though 1000 tons less than in previous years, but it has 400 tons of stock and more than in previous years.

Joy and sorrow in textile industry

Every change in cotton prices at a high level affects the nerves of the entire textile industry chain.

"Cotton prices have risen to the highest point in history, and have been pmitted to the whole industry chain.

Ma Junkai, Secretary General of Dezhou Cotton Association, pointed out that cotton growers, cotton processing plants and spinning enterprises are in the upper reaches of the industrial chain, and the price of raw materials can be amortized downwards.

But the downstream export enterprises such as weaving, clothing and so on must bear the heavy pressure of rising costs.

Shandong is the second largest cotton producing province and the largest textile Province in the country. The output of yarn and cloth ranks first in the country.

Mr. Zhang, general manager of Zhejiang cotton textile limited liability company, has recently arrived in Dezhou to understand the post market situation of cotton.

He said that the profit margin of cotton yarn per ton has reached over 3000 yuan, and some customers have to queue up for yarn.

At present, spinning, weaving and clothing are decreasing in the upper layer of profit distribution.

Gao Yongzheng, general manager of Qingdao Yuanfeng industrial group, told reporters that the price of cotton has driven up the price of various finished fabrics by 5%-10%, resulting in a 2% decrease in corporate profits.

This makes it even more difficult for the textile enterprises with low profit margins.

Gao said that the rise in cotton prices has jeopardized the improvement of the textile export situation.

"Now the production lines of garment enterprises are producing autumn and winter clothing, but the cost of garment manufacturing has increased by about 10% under the double pressure of raw materials and labor costs."

Gong Lei, general manager of Yantai Yuanfeng foreign trade company, said that if the export enterprises did not raise their prices accordingly, the profits would be damaged. If the export price was raised, it would mean the loss of orders.

He believes that the export advantage of Chinese textiles is being devoured by high cotton prices.

It is understood that Dezhou Huayuan technology, Hengfeng textile, Baoding textile and other enterprises have increased the application of new fibers such as Tencel, milk fiber, bamboo fiber and corn fiber, as well as the application and product development of cashmere, fox hair, silk and other animal fibers, and the proportion of non cotton fiber has increased step by step.

But a cotton expert in Wucheng County pointed out that the solution to the current crisis of textile enterprises must start from the source.

He said that the state should make direct subsidies to cotton farmers.

In the 2009 cotton year, when the state acquired the national cotton reserves, the subsidy of 600 yuan per ton was supplied to the processing companies, hoping to pfer to the cotton growers. But in fact, the processing company put the subsidy into their own pocket and made a big profit.

Ma Junkai, Secretary General of Dezhou Cotton Association, also believes that farmers who grow grain can receive direct subsidy, grain subsidy and agricultural subsidy per mu, totaling 83 yuan per mu.

Cotton farmers only have 15 yuan per mu of good seed subsidies.

The state should give the cotton farmers the same direct subsidies as the grain farmers. The cotton growers' enthusiasm for cotton planting has increased, and the cotton output has come up to keep up the soaring cotton prices, and the cost of the downstream textile industry has naturally reduced.