Quanzhou, Fujian: Cotton Prices Soar, Pressure Industry Terminal &Nbsp, Spinning Enterprises Forced To Semi Stop Production

The profit of a pair of trousers has been reduced by 10 yuan. Individual spinning enterprises Forced half stop production

Summary

At the moment Domestic momentum Zheng Sheng's surge in cotton prices is hitting the textile and garment industry in Quanzhou. The cost pressure has recently been transmitted to the terminal of the industrial chain. According to the enterprise, the profit of a pair of trousers has been reduced by 10 yuan due to soaring cotton prices. Some factories are even forced to leave their employees for half a stop. Some people in the industry say that this situation may also lead to the transformation of some factories that make foreign orders to domestic brand names.

Fabric enterprises first encounter

As a textile industry Raw material The domestic cotton 95% is used for spinning, then weaving, printing and dyeing, and then being processed into clothing. It has a long chain of upstream and downstream industries. Nowadays, the pressure of rising prices of raw materials is continuously transmitting to downstream industries such as weaving, printing and dyeing, clothing and so on. Mr. Cai, the head of a Shishi textile enterprise, complained incessantly. He said, "the price of 32 cotton yarns was about 30000 yuan per ton a few days ago, and now it has risen by about 5000 yuan per ton. International cotton prices are approaching the peak in 15 years, directly driving up the price of cloth, which puts the company in a semi shutdown state.

Mr. Cai said that some of the garment enterprises around him received many foreign orders at the beginning of the year. "At that time, everyone was happy to see each other, and now they can't laugh. The price of cotton has gone up, and the cost of workers' wages and water and electricity is also rising. Only a few points have been eaten away. Now, some people are hard at work and bite their teeth at a loss making business. He said, individual enterprises have been unable to sustain.

"Now the price of raw materials has gone up very much, and the cost of our clothing is also rising. This is a more difficult problem." Li Tianfu, deputy general manager of Fujian marlett knitting garments Co., Ltd. Cotton prices have hit record highs this year, driving the price of the entire garment industry up. Affected by this wave of cotton price surges, cotton prices have risen by 15% - 20%, while export prices have not been significantly improved, and the profits of enterprises are gradually being "swallowed up".

Processing plants dare not take orders easily.

As a labor-intensive industry, garment manufacturers are greatly influenced by the rising labor costs. The head of a Menswear brand said that the increase in overtime costs on weekends resulted in an obvious increase in expenses, and the wages of workers rose almost every year.

As the cost of raw materials such as cotton and cotton yarn has risen sharply, textile enterprises and garment processing industry as the downstream industry chain are increasingly feeling the pressure of rising costs. The latest research report released by the China Cotton Association shows that the price of raw cotton material continues to rise, and the profits of downstream garment enterprises are reduced. Many weaving enterprises choose to stop working and leave, while clothing companies are more cautious when receiving orders.

Wang Yumiao, general manager of Jinjiang Dasheng Textile Industrial Co., Ltd., said that the cotton and other raw materials were a substantial increase in prices, and the price of raw materials increased, coupled with the increase of staff wages, the enterprises need to spend more on production costs. He said: "in this way, the profit margins of enterprises have become smaller. The price of raw materials of cotton textile industry is rising, and downstream enterprises need to make the most direct response.

At present, Quanzhou garment enterprises are still at the peak of the order meeting. The reporter has learned that the pressure of cotton price rise has been transmitted to the terminal of the industrial chain. Some clothing enterprises interviewed by reporters said: "clothing garments are greatly affected by the rising prices of raw materials. It is definitely not possible to digest them by themselves, which needs to be shared by consumers and enterprises." Enterprise analysis, at present, the price of 1 meter pure cotton cloth has increased by 3 yuan, a pair of trousers with 1.5 meters, plus labor costs and post-processing links, and so on, a pair of pants will cost 10 yuan more.

Higher retail prices of clothing

As for the price increase of the terminal retail market, Wang Yumiao believes that different brands have different grasp ranges. "Different brands have different sales and positioning," he said. The sales volume and profits of famous brand enterprises will not be affected too much because of the substantial increase in raw material prices. But for export enterprises, it has a great impact. At present, there is no specific adjustment scope for their own enterprises, but they will gradually adjust to control about 20% of the increase.

At the same time, many clothing companies listed on the relevant financial results also show the trend of higher clothing retail prices. For example, the semi annual report released by XTEP shows that the average selling price of clothing products has increased by 13.9%. Anta reported that the price of clothing products increased by 7.1% (49.6 yuan). Li Ning Co announced in June that the average retail price of footwear and clothing products increased by 7.8% and 17.9% respectively in the fourth quarter of this year. Senior experts in the industry said that the overall price of clothing nationwide is now rising at 10%-20%.

Or expedited the "foundry army".

"The growth of costs will have a great impact on export enterprises, and will even force many enterprises to transform. Those factories that rely on making foreign orders are relatively low in profits, and a substantial increase in raw material prices may force them to cooperate with domestic famous brand enterprises. Cai Tianshou, chairman of Jinjiang Tianshou garment Weaving Co. Ltd. said, "the increase in retail prices is mainly related to distributors, especially the general agents of all provinces and cities. In the face of rising prices of raw materials such as cotton, retailers from various channels should reduce the profit earned by intermediate links, and share the cost pressure together to tide over the difficulties.

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Industry situation

Cotton prices rose 20% in 4 days.

The Ministry of industry said the textile industry has been in trouble again.

For the current situation faced by the textile industry, many industry insiders believe that the textile industry will fall into a large area of production or stop production. Wang Wei, deputy director of the consumer goods industry department of the Ministry of industry and information technology, said that the textile industry has been in trouble again.

Prices of raw materials are soaring.

"Cotton prices have risen by 20% in 4 days. The transmission of such prices will soon be carried downstream, and the pressure of textile enterprises will be great." In September 20th, Wang Wei said in an interview with reporters.

According to statistics from the Ministry of industry and information technology, the profit of the textile industry increased by 61% over the first half of the year. However, the good year is only a flash in the pan. Influenced by cost and power limitation, the textile industry is facing the trend of high and low with the Chinese economy.

"The biggest problem that threatens the textile industry is the cost and quantity of raw materials." Wang Wei said that this adds enormous cost pressure to the textile industry.

Hebei Shijiazhuang Changshan Heng Xin Textile Company Marketing Manager Su is worried about the rapid rise of cotton prices. "In the last 4 days, the price of the 4 grade cotton has risen from 18000 yuan / ton to 22400 yuan / ton, and the price of 5 grade cotton has also broken through 20000 yuan / ton."

It is understood that after September 20th, the US cotton futures rose sharply, while the Zhengzhou futures exchange cotton futures showed a daily limit.

So why are cotton prices so high? What are the reasons for the rise?

The reporter understands, the reason that causes cotton price to rise all the time is multifaceted. On the one hand, due to the low cotton prices in 2008, cotton growers' confidence was frustrated and the planting area was reduced. Statistics show that in 2009, China's cotton production was 6 million 400 thousand tons, a decrease of 1 million 100 thousand tons compared with 2008, a drop of nearly 15%. On the other hand, last year, cotton production in Xinjiang and other major cotton producing areas decreased by nearly 1/4 due to climate disasters and other reasons, which further aggravated the contradiction between supply and demand imbalance. At the same time, the international cotton price is also on the rise, while cotton exporters such as India have suspended cotton exports, and cotton prices are unlikely to fall in the short term.

In addition, demand is also a major reason for the rise in cotton prices. China's textile industry has continued the trend of stabilizing and picking up in the second half of last year. The domestic yarn output increased considerably from 1 to February in 2010, up 26.52% compared to the same period last year, and the operating rate and order situation of the enterprises were much better than that of the same period last year.

With the rise of cotton prices, the price of chemical fiber has also risen sharply.

In Wang Wei's view, textile enterprises are facing not only the problem of high cotton prices, but also the shortage of cotton supply next.

Wang Wei's view coincides with the expert of Mao Shuchun, a cotton Research Institute of the Chinese Academy of Agricultural Sciences. According to Mao Shuchun's prediction, to the end of 11th Five-Year, even if the cotton planting area is increased by 10 million mu on the basis of the existing about 80000000 mu, the annual import volume of cotton in China still needs to reach 4 million 500 thousand to 5 million 500 thousand tons, so that the balance of production and demand can be realized roughly, and the dependence on cotton will increase to 36% to 40% at this time.

"Domestic cotton shortage is not only related to weather reasons, but also related to farmers' reluctant sale, and farmers are reluctant to sell when prices of all kinds of agricultural products rise." One industry insider said.

Textile industry or production stoppage

However, the downstream garment industry is still optimistic about its surface and does not know the danger is approaching.

The report released recently by the China Textile Industry Association shows that the average profit rate of the top 10 enterprises in the garment industry is the highest, reaching 10.46%, while the average profit margin of the top 10 enterprises in the knitting industry is 10.36%.

Wang Wei explained to reporters why the current textile and garment enterprises profit: "in the second half of last year, the cost of raw materials was low, and the raw materials for textile products are mostly purchased during that period, which created a good profit margin for the first half of this year, and now there will be many uncertainties."

It is reported that due to the restriction of cotton supply and price, a large-scale production of cotton mills has been staged in Shandong.

According to the law of price rise, the price rise of cotton will drive the price of gauze to rise, and then increase the price of clothing. Su said, "if downstream industries can not accept high prices, they will have to stop production and cut production."