Raw Materials Price Increases &Nbsp; Factory Pressure, Autumn Winter Wear Price To Let Consumers Pay The Bill.

In June 2nd, more than 80 workers from a small textile mill in Longhu, Jinjiang received the notice of the company: the company will suspend production and rectify in the near future.

"After months of support, I couldn't help it."

Some old employees sighed.

According to these old employees, starting from the second half of last year, because of the monthly rise in raw material cotton prices and the monthly opening rate in the factory, the company can not store large quantities of raw materials, making it impossible for workers to work longer hours.

The dilemma faced by the textile mill is not a case.

Not long ago, a textile company in Shishi made the same decision.

Although in late May, cotton prices fell to a low level in three months after a wave of ups and downs, but this slight drop did not help these small textile enterprises escape from the fate of "suspend production and consolidation".

Since last July, cotton prices have continued to rise, reaching a record high at the end of 4 this year, which has become a frenzied cotton for textile and garment industry.

In this wave of "boom", the first thing to bear is not the cotton yarn factory, but the textile enterprise located in the middle of the industrial chain.

As cotton prices continue to stay high, the price trend will be pmitted to the downstream of the industrial chain.

Crazy cotton or cotton yarn?

"The two periods of late May and March to April have been growing most rapidly. There has been a big price change almost every week, and the price of yarn has also been rising frequently.

This makes us small businesses very passive.

After all, orders are coming in the morning and it's difficult to raise prices.

Now the price of raw materials fluctuates so much that we do not have much reserves. We are close to zero profit.

The production leader of a small textile enterprise in Longhu, Jinjiang, complained that the cotton price rose to 14 thousand yuan per ton, and many cotton textile enterprises claimed to be unable to sustain it.

China's cotton price index shows that the price of standard cotton has risen from less than 15 thousand yuan / ton in February to 17289 yuan / ton in May, while the price of standard cotton was only 10966 yuan / ton at the beginning of last year, and the cumulative increase has approached 60% since the beginning of last year.

Compared with the same period last year, cotton prices in late May were also about 35% higher than last year.

Even big enterprises feel helpless about the sound of "rising" for nearly a year.

Jin Tao, deputy general manager of Fujian Baikai textile and chemical fiber industry Co., Ltd. counted for the reporter: in May, cotton entered a new wave of price rise, each ton rose nearly 1000 yuan per week, and also led to the rise of cotton yarn prices.

On average, from the beginning of the month to the end of the month, the cost of raw materials for cotton yarn per cotton piece increased by about 1 yuan.

"The profits of textile enterprises are calculated in terms of fractions and corners. How can they withstand such frequent and large changes in material costs?"

Jintao, who has more than ten years of experience in the textile industry, believes that the pressure facing textile enterprises is mostly from the upstream cotton yarn producers.

"Suppliers were surrounded by us last year. We are surrounded by suppliers this year.

By increasing the price of cotton, the upstream suppliers have also raised prices, or even higher prices than cotton products.

Jin Tao believes that many cotton mills are speculating profits in this wave of rising prices, which is undoubtedly a matter of urgency for textile enterprises.

The fact shows that under the condition that the textile market is promising, the cotton mills do have greater bargaining power than the difficult game between textile enterprises and downstream merchants.

"We thought that the rise in cotton prices would have an adverse effect on us.

But in fact, the situation is not as bad as expected.

In the last few months of cotton price increase, we have continuously raised the price of cotton yarn according to the increase in cotton prices, which most customers can accept.

Since the beginning of this year, the price of our cotton yarn has increased by nearly 20%, plus some of our cotton purchases last year, and we can still maintain a certain profit. "

Shishi, a cotton yarn business operator revealed.

Autumn and winter clothing prices rise to a foregone conclusion

Who has driven the rise of raw materials? This is no longer an issue.

After several months of cost pressure, many textile enterprises have developed measures to raise prices for garment customers, and have begun to implement them.

In the second half of this year, the trend of price rise will surely be pmitted to the downstream of the industrial chain, and ultimately the consumers will pay the bill.

"For weaving mills, raw material costs account for 80% of the total cost, so enterprises must upgrade their prices according to the cost of raw materials.

In the past two months, we have negotiated with the clients to share the cost of raw materials.

The latest price increase was around 2%, when cotton yarn prices increased by about 4%.

As far as the whole industry is concerned, as long as the fabric is cotton blended, the price will be raised appropriately.

Jin Tao said.

As the lower reaches of the textile industry, the garment industry will face the "hot potato" thrown upstream.

According to a cloth trader in Shishi, the rise of cotton prices reflects the downstream clothing, which usually takes 4~6 months.

Starting in May, textile mills have entered the peak season for autumn and winter clothing production. The amount of cotton used in autumn and winter fabrics is even larger, and cotton prices are still high.

A more careful consumer will find that some of the summer wear has increased slightly this year.

However, because of the lack of materials, summer wear is less affected.

In autumn and winter, clothing materials far exceed summer products. 1 kilograms of raw materials can produce 10 sets of summer products, but can only produce 2 sets of autumn and winter products.

The cost pressure of enterprises will become more and more obvious.

According to the preliminary pricing forecast, the clothing products in autumn and winter will increase 8%~15% this year. "

Many brand clothing enterprises responsible person said that cotton prices rose 30%, if completely passed on, the retail price of clothing should be at least 20%, enterprises can digest the cost.

Many foreign trade enterprises are trying to bargain at the time of purchase.

Hong Jianku, chairman of Jinjiang seven color fox garment Weaving Co., Ltd. takes the annual sales team to take the exhibition.

In the previous Canton Fair, the cost of raw materials had already been included in his casual clothing quotations.

But relatively speaking, the current domestic brand situation is more optimistic than exports, many export clothing enterprises are trying to fine tune the order price 3%~5%, far below the cost of raw material increase.

Even so, the bargaining process is still rather difficult.

Related news: "decompression" behind the sound of the road

In the "boom" sound, textile enterprises are facing enormous cost pressures.

How to digest costs and reduce pressure? In addition to continuing bargaining with the upstream and downstream businesses, many textile enterprises also implement decompression measures in terms of product mix and production management.

Adjust product mix

Since the beginning of this year, Baikai textile chemical fiber company has begun to avoid some orders consciously.

Since the beginning of this year, the company has revised its product selection criteria: the more complex production orders, the longer production cycle orders, the fewer orders for positive fabric orders, and the more simple choice of casual fabric orders.

"Last year, our order dress and casual fabrics order ratio is 8: 2, in these months, slowly adjusted to 3: 7."

Jin Tao said that the production cycle of the positive fabric is longer and the money recovery is slow. It is not until the clothing companies are listed that they can recover the money, which is unfavorable for the textile enterprises that are under the pressure of huge raw material cost.

In contrast, the production process of casual fabrics is relatively simple and the production efficiency is relatively high.

After adjusting the product structure, the production efficiency of Baikai textile and chemical fiber company increased by 4% in May compared with that in April, and the reduction of production management cost hedged up the cost of raw materials.

Accelerating new products

"There is another way to speed up the promotion of new models, and the new ones will have room for improvement in pricing."

Many fabric traders said that in general, the cost of raw materials increased by 10%, and the price of products increased by 5% to 8%.

Consumers are more receptive to the new price increase.

Accelerating the development of new products has become the main solution for textile and garment enterprises to cope with cost pressures. Many enterprises have changed their sales to promote special new products.

The price of old products is not acceptable to all merchants.

We can only invest more energy in new product research and development, and appropriately raise the price of new products to dilute production costs.

In May alone, we launched 9 new products, with a great improvement in color and style compared with previous products. Even though the price is high, they are favored by downstream merchants.

A salesperson of cloth row tells a reporter, the sale of new product is good at present, basically can make up for the loss that cotton rises in price.

Comprehensive technical pformation

Many textile enterprises have adopted another way to relieve the pressure of high cotton prices.

They have stepped up investment in upgrading equipment, and imported new equipment with high automation and energy saving effect, and started comprehensive technical pformation to reduce production costs.

This month, a number of new equipment imported from Japan purchased by Fujian Longfeng Textile Technology Industrial Co., Ltd. will enter the factory and start production after installation.

This is the second batch of equipment introduced by Longfeng textile this year, before the company has imported 150 units of the same series of equipment.

"These devices are customized, and we have made adjustments to the manufacturers in Japan.

The customized import equipment is highly efficient and can replace part of the labor in order to reduce production costs.

Otherwise, the profit margins of enterprises are getting thinner and thinner.

Longfeng textile research and development staff said.

Mr. Xu, assistant president of Baikai group, also said that since the beginning of this year, the company's production managers have spent more time in the workshop to control the production links to save money, including minimizing the wastage in the tailoring process, debugging and maintaining the machine equipment to improve efficiency, so as to benefit the internal management.