Sichuan Textile Enterprise Costs Surge, Some Enterprises Stop Production

From December last year, cotton rose 30% over the past 5 months.

As a major province of textile exports, the cost of Sichuan textile enterprises has surged.

At present, domestic textile export prices have generally risen by 20%. Many merchants have shifted their orders to cotton exporters in India and Pakistan. Part of Sichuan enterprises orders have dropped by about 10% compared with the second half of last year.

When garlic and mung beans led the price of a round of farm products, another surge in the prices of agricultural products began to affect our lives.

Since the second half of last year, cotton prices have been rising all the time because of the reduction in production. Up to now, domestic cotton sales prices have surged by more than 30% over the same period, and the price of general standard cotton has risen from 13 thousand yuan / ton in April and May last year to 17 thousand and 500 yuan / ton.

This round of textile industry cost increase is the largest in recent years. As a major export province of textiles, many Sichuan and Taiwan enterprises are facing a sharp increase in cost pressure.

Half a year up 30%

Cotton enterprises stop receiving orders

In the cost of garments, cotton yarn prices generally account for 60%-70%, and cotton yarn has increased by more than 20% since the beginning of this year.

The steep rise in cotton prices began in 2009. China's cotton price index (CCIndex328) rose from 10966 yuan / ton at the beginning of last year to 17289 yuan per ton in May 25th this year, which has risen by 57.66%.

At present, the national average sales price of standard cotton has been above 17 thousand yuan / ton, the highest has reached 17 thousand and 500 yuan, the highest since 2004, and the price at the beginning of the year is only 14 thousand and 500 yuan / ton.

From December last year, cotton rose 5 over the past 30% months.

According to the statistics of China Cotton Association, the cotton price index rose by 8% in April 30th, and the price of 32 cotton and cotton yarn increased by 12% compared with that before the Spring Festival, while the price of cotton fabric increased by only 5.7%.

A survey conducted by the China Textile Industry Association shows that since March this year, some small and small cotton enterprises have stopped taking orders, and many looms have been stopping one after another, and the operating rate is decreasing.

Some textile enterprises appeared "cotton yarn making money, gray cloth loss" phenomenon.

Many cotton enterprises are now suspending production.

Cost increase

Sichuan enterprises export orders fell by 10%

The United States, the European Union and Japan are the most important areas of textile and clothing consumption in the world, and also the main export market of China's textile industry.

However, at present, there is no overexpected rebound in external demand, trade friction, European debt crisis, RMB appreciation and a series of negative factors overlap, coupled with the rising price of raw materials, the export situation of textile industry is not optimistic.

The responsible person of the Provincial Department of Commerce said that textile exports accounted for about 20% of the total export volume of our province, which was a large class of export products, and the rise in cotton prices undoubtedly had a great impact on the export of textiles.

Wan Weiping, chairman of provincial textiles import and export limited liability company, said that the price rise of raw materials in the market after the revival of the market was particularly fierce and extremely urgent.

Take cotton as an example, it has risen from 13 thousand yuan / ton to 19 thousand yuan in just 5 months, and the company and its customers have calculated the paction price by 18 thousand yuan of cotton cost price. At present, the enterprise is at the edge of loss.

On the other hand, to offset the pressure of rising costs, domestic textile export prices have generally risen by 20%.

In order to find a bigger price advantage, many merchants have shifted their orders to cotton exporters India and Pakistan.

Wan Weiping reflected that business orders fell by around 10% compared with the second half of last year.

Rao Ting, general manager of red fruit clothing, said that the rise of cotton prices has made the enterprises feel a lot of cost pressure. Many orders can not be done according to the previous prices. "Now we are very cautious about placing orders, and the list that has been received has also been turned into no profit because of the rise in cotton prices.

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Profit is only 3%-5% - to develop new market.

Textile is the most important export product in China. Because of low price, it has always been the focus of trade friction.

In May 11th, the General Administration of Customs issued an early warning report. In the 1 quarter of this year, the monthly export volume of China's textile and clothing showed a trend of decreasing month by month, with the export volume of 11 billion dollars in March, down 9.5% compared with the same period last year, and the ratio decreased by 12.9%.

At the same time, coupled with the impact of RMB appreciation expectations, the future of foreign trade enterprises is not optimistic.

A test result of China Textile Import and Export Chamber shows that the average net profit margin of China's textile and garment enterprises is between 3% and 5%, and some enterprises are even far below 3%.

Faced with this series of pressure, Rao Ting said that a large part of energy has been pferred to expand domestic demand, and at the same time, it has opened up more emerging markets besides Europe and the United States.

"We can only develop more emerging markets, such as South America, Africa, the Middle East and so on.

"Rao Ting said that the price pressure in this part of the market is much smaller and the export restrictions are less," the trade frictions would not be that large.

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