Cotton Price Change "Unexpected" &Nbsp; Local Textile Enterprises Are Facing Severe Test.

"A shirt actually costs 300 yuan, and the brand has risen by more than 20% compared with the same period last year!" she was surprised to see the price tag. In October 17th, Fuzhou's temperature dropped to its lowest level since the autumn. Fuzhou The clothing department of many supermarkets is the most popular, but the price is much higher than that of last year, bedding and so on. Cotton products Prices are also rising.

"From last October to now, domestic cotton prices have risen to the highest level in 10 years." Lin manager, who is responsible for clothing purchasing in a supermarket chain in Fuzhou, told reporters that cotton prices continued to soar at home and abroad, and the cost pressures led by them had been transmitted to yarn, cloth, clothing production and other processing links.

In response to the rise in cotton prices, many brand clothing enterprises have chosen to raise prices, and the range is not small. The semi annual report released by XTEP shows that the average selling price of clothing products has increased by 13.9%, and Anta's earnings report also shows that the price of clothing products has increased by 7.1%. Some extensive small and medium-sized textile enterprises are facing the exit situation.

Cotton price change "unexpected"

For the soaring price of cotton this year, Chen Cangsong, vice president of Quanzhou textile and Garment Association and vice president of Hongyuan Group of Fujian, summed up four words "unexpected".

In September 27th, China's Cotton (24530, -345.00, -1.39%) price index broke through the 210 million yuan mark, reaching 21255 yuan / ton, a sharp rise of 600 yuan compared with the previous day, and once again broke the cotton price's highest in 10 years.

In Chen Cangsong's view, cotton prices rose from 8000 yuan per ton in 2008 to a huge increase in the first half of this year. It is understood that in the second half of the year, the domestic cotton price has a short callback, and the callback from July to the end of August lasted for one and a half months.

What surprised many textile and garment enterprises was that cotton prices rose again rapidly from September 2nd, and the rate of increase was much faster than before. In late September, cotton prices in China rose at a price of several hundred yuan a day, which took only half a month, and the increase was over 2800 yuan / ton. Cotton prices rose by more than 30% in September.

"In domestic terms, cotton production has dropped by about 16% last year, but the demand for enterprises is still strong, coupled with rumors that the international cotton business has acquired domestic cotton and the emergence of some cotton speculators. These factors have consolidated the continuous rise in cotton prices." A person familiar with the clothing industry in Quanzhou told reporters.

Under the condition of insufficient supply of cotton in China, the import of cotton is also increasing rapidly, which undoubtedly increases domestic and foreign cotton prices. Statistics from Quanzhou's foreign economic and Trade Bureau showed that the total value of imported cotton in Quanzhou in the first half of this year was 34 million US dollars, up 53% over the same period last year.

Due to inadequate stock preparation and rising cotton prices, Fujian textile and garment enterprises have felt the pressure of cost.

"Cotton prices have been rising. The company has been waiting for the callback, and cotton inventories have been decreasing." Chen Cangsong said despondent, "cotton price is really too high, I expect the three quarter should be callback down, then increase inventory, I did not expect the plan to catch up with the change."

"It's almost a day's price. Never seen the price rise of raw materials." In a cotton textile enterprise concentrated in Changle, Fuzhou, a textile enterprise official said, now even the order price do not know how to write. {page_break}

　　 Downstream enterprises Hard to bear the heavy cost

"Originally the output is not big, has always been how many orders to produce, and now the raw material prices are too high to control." The head of a small textile enterprise in Changle said that faced with high cost, there was no profit. If this stage was not enough, they could only stop production.

"The price of a cotton vest is 10 yuan, and now the cost of raw materials will be increased by two yuan, plus the rising wages of workers and the cost of water and electricity. Finally, the cost of products will be increased by 6%~10%." Quanzhou textile and garment industry association responsible person told reporters that as the cotton price rise of the first chain of the traditional cotton spinning industry, the original profit is only about 2%, or even less than the bank deposit interest rate, wandering around the critical point of profit and loss. Cotton prices continue to rise, directly to wear this critical click.

With the passage of time, high cotton prices are accelerating to the middle and lower reaches of the industrial chain. In the affected enterprises, the export enterprises are the first ones to bear the brunt. Lin Shengchuan, President of Shishi casual trousers Association, told reporters that soaring cotton prices almost eat all the profits of the whole casual pants export industry.

It is understood that the foreign trade enterprises of textile and garment industry usually get more than 3 months from receiving orders to shipping. Enterprises usually purchase raw materials and organize production after obtaining orders. Under such circumstances, enterprises can only bear the losses caused by price fluctuation of raw materials themselves.

A lingerie enterprise in Shen Hu Town, Jinjiang, received a 3 year order in 2008. "The main raw material of underwear is cotton cloth, which is directly affected by cotton price. The profit of originally producing a dozen (12) underwear is less than 1 yuan, and now the more we produce, the more we lose. An export Merchandiser of the company told reporters.

"Cotton price is so high that most enterprises can not afford it. Those factories and small and medium-sized enterprises that rely on making foreign orders are relatively low in profits, and the rising prices of raw materials such as cotton may force some of them to cooperate with famous domestic enterprises to become their foundries. Cai Tianshou, chairman of Jinjiang Tianshou garment Weaving Co., Ltd.

According to the statistics of the Ministry of industry and commerce, the profit of the textile industry increased by 61% over the first half of this year. However, the good year is only a flash in the pan. Under the pressure of cost and power limitation, the textile industry is facing the trend of high and low with the Chinese economy. The rising price of raw material cotton is also one of the main reasons.

Changing the extensive export oriented mode

Facing unprecedented cost pressures, raising prices is the only choice for many textile and garment enterprises.

The industry estimates that Quanzhou enterprises with cotton cloth as the main raw material may choose to raise their prices by about 12% this autumn and winter. The head of some clothing enterprises in Quanzhou said that cotton prices rose by 30%. If the cost was transferred to the terminal, the retail price of clothing should be increased by at least 20%.

High cotton prices, some enterprises began to embrace, try new ways to resolve costs. In August, four textile enterprises in Shishi, such as Xie Sheng Feng, Hua Feng, Fu Hua and Taishan cloth industry, went to Xinjiang to carry out investment cooperation intentions with many local enterprises in cotton production and marketing and cotton spinning production base projects, extending their tentacles to the upper reaches, reducing the impact of cotton prices as far as possible.

Chen Cangsong told reporters that in addition to a few brand enterprises, most of the other textile and garment enterprises in Quanzhou still cluster in the middle and low end products. Overcapacity and vicious competition in the industry have not fundamentally changed, especially in some small and medium-sized enterprises, which are at the edge of bankruptcy and there is no pricing power at all. Under such a realistic situation, there is little room for upward price adjustment.

Experts pointed out that in order to avoid cost risks, we should eventually change the extensive export growth mode. We should pay close attention to the trend of raw material market and international and domestic raw material resources, and grasp the opportunity of raw material procurement. We should speed up the elimination of backward production capacity, adjust the product mix, reduce the dependence on raw cotton, and apply some new processes and new patterns to products, increase the added value of products and improve the quality of products.

This year, Fujian textile and garment enterprises and R & D institutions have issued more than 100 technical solutions on technological improvement, equipment renewal, product replacement, energy saving, comprehensive utilization, upgrading of industrial chain, etc. altogether, 24 items of docking projects have been completed, and more projects will be joined. It is the best way to change the extensive export growth mode and win the road of quality.