Inside: High Cotton Price Compression Cotton Textile Enterprises Profit Space

Analysts say there are many reasons for the rise in cotton prices: the planting area has decreased this year; the main cotton producing areas have reduced production by nearly 1/4 due to climate disasters, exacerbating the contradiction between supply and demand imbalance; and the international cotton price is on the rise.

According to the experts, for the fact that cotton production and marketing contradiction and demand gap cause cotton prices to rise objectively, it is necessary to continue to study more regulation and control measures. Enterprises should do self-discipline at the time when new cotton is listed, and try not to hoard cotton, grab cotton and stir fry when production is guaranteed.

Cotton price down Domino

Once unknown cotton began its legend.

During the Mid Autumn Festival and the National Day "double section" gap, when investors were attracted by the international gold price of 1300 US dollars / ounce, perhaps they had not noticed that the cotton price which had long been out of date had reached the height of cold.

Recently, cotton spot, futures and dumping prices have risen sharply.

A sales manager of a textile enterprise said that the rise of cotton has not been seen in 10 years.

In August last year, the price of cotton was 10000 yuan per ton, and now it has reached 20000 yuan per ton, an increase of about 70%, while the price of textiles has increased by 20%.

The national cotton price B index, representing the domestic cotton price level, reached 328 yuan in September 27th, reaching 22032 yuan / ton, the highest in 10 years.

At the same time, the China cotton reserve management company sold cotton reserves in September 25th and September 26th for two consecutive days after the holidays, selling more than 20 thousand tons per day, and the price continued to maintain a rapid rise before the holiday. In September 25th, the reserve cotton price rose by 1747 yuan per ton compared with the pre holiday period.

It is said that the rise of cotton prices has also been reflected in many upstream and downstream links such as cotton purchase.

China Cotton store announced that the price of seed cotton has been rising continuously, and the price of lint has increased rapidly, and has been pmitted to yarn and cloth links.

The Domino effect produced by high cotton prices is adversely affecting the following enterprises such as weaving, clothing and so on.

Analysts say the shortage of raw materials has raised the price of cotton yarn, and cotton textile enterprises are doing well.

On the other hand, due to the large number of domestic garment manufacturers and fierce competition, the survival cost of garment enterprises has increased, but they still dare not raise their prices in foreign trade exports.

Similarly, the printing and dyeing weaving enterprises are under the dual pressure of upstream and downstream prices, and have become the "victims" of high cotton prices.

Du Min, a researcher at the Ministry of agriculture's Rural Economic Research Center, pointed out that since 2010, with the revival of the world economy, strong consumption has pushed cotton prices up sharply. From 2010 to 2011, the domestic cotton market will enter the era of high cotton prices, which makes the risk of cotton production and textile enterprises increased.

There is a reason for soaring cotton prices.

So why are cotton prices so high? What is the reason for the rise? Analysts believe that the reasons for the rise in cotton prices are manifold.

On the one hand, under the influence of the international financial crisis in 2008, the export order of textile enterprises was low, resulting in reduced demand for cotton and low prices, which directly affected the enthusiasm of cotton farmers and the national cotton planting area decreased significantly.

Statistics show that in 2009, China's cotton production was 6 million 400 thousand tons, a decrease of 1 million 100 thousand tons over 2008, and a drop of nearly 15%.

On the other hand, after the financial crisis, cotton demand increased sharply, and there was a gap between cotton production and demand.

Increased demand is a major reason for the rise in cotton prices.

Mao Shuchun, an expert in the Cotton Research Institute of the Chinese Academy of Agricultural Sciences, predicts that by the end of the 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 will be realized. At this time, the dependence of cotton will increase to 36% to 40%.

For the strong Chinese textile industry, cotton resources have entered a strategic shortage period.

Cotton prices hit a new high of 10 years, in addition to the impact of reduced production, the industry also said that speculation and speculation.

It is said that some real estate developers in Zhejiang and Shanxi's coal bosses went to Xinjiang to buy cotton.

The general practice is to wrap up a cotton growing base, and then wrap up the local cotton processing plant. The cotton picked from the field is directly pported to these processing plants to be made into lint and then pported to the mainland for sale.

Earlier media reports said that at least 10 billion of Zhejiang's private capital left the coal and real estate market this year and fought for the cotton market.

Under the speculation of idle capital, cotton prices appear strange phenomena of price upside down.

The cost price of cotton is as high as 24500 yuan / ton this year, but the purchase price of cotton in the market is only 23000 yuan / ton, although it is a new high in the past 10 years, the price is still hanging upside down.

It is worth mentioning that under the condition of shortage of cotton supply, some cotton merchants with strong financial strength and experience began to hoard cotton, cotton and cotton in great quantities. Under this impetus, a few large enterprises in cotton textile enterprises began to hoarding cotton.

When resources are accumulated in the hands of a few people, it is easy to cause prices to skyrocket.

Cotton price adjustment is imminent.

Analysts said that because of the rapid rise in cotton prices at home and abroad, the cost of China's textile industry has risen sharply, which has been on the front line of life and death. This price pmission will soon be pmitted to the lower reaches, which is likely to promote the overall rise in domestic prices, which will further intensify domestic inflation expectations.

Facing the unrestrained growth of cotton prices, the seven ministries and commissions of the national development and Reform Commission, the Ministry of finance, the Ministry of agriculture and the General Administration of industry and Commerce recently held a national teleconference on cotton work, analyzing the current cotton production and marketing situation, and deploying the 2010 cotton work.

The meeting decided that 5 measures should be taken: first, do a good job in ensuring market supply, make a good plan for controlling the reserve throughput, give full play to the role of large scale circulation enterprises in regulating and stabilizing the market under the guidance of the state; two, do a good job in the purchase and sale of new cotton and the risk prevention and control work; three, strengthen the supervision of the market and quality; four, support the development of cotton production; and five, promote the pformation of the textile industry.

The head of the NDRC said that although there has been no clear evidence to show that hot money is involved in cotton price speculation, the state is paying close attention to the phenomenon of rising cotton prices, especially strengthening the regulation and investigation of illegal practices such as hoarding and distributing price rises.

Experts believe that in recent years, fewer and fewer farmers are planting cotton. The state should introduce policies to increase the income of cotton growers. First of all, we should increase the subsidy for cotton planting. Secondly, the state should introduce a minimum cotton purchase price policy to prevent cotton prices from rising and falling.