The New Shuffle Of Textile Industry &Nbsp; &Nbsp; The Hand Of Regulation Is Difficult To Intervene.

In October 15th, China's cotton price index (CC Index 328) 24177, up 254.

On the previous day, the first four contracts of ICE cotton futures closed at a daily limit, and the December contract closed at 114.87 cents / pound, up 400 points, a record high.

Cotton futures rose sharply before the US Department of Agriculture announced the monthly demand and supply report eagerly anticipated by the market, and the market continued to soar after the data was released.

The United States Department of agriculture reduced the world's largest cotton consumption in China's 2010/11 cotton production forecast by 1 million to 31 million 500 thousand bales, and raised the Chinese import estimate from 12 million 750 thousand packages to 13 million packages, reducing the end of China inventory estimate from 16 million 10 thousand packages to 14 million 720 thousand packages.

Driven by the contradiction between supply and demand and the international cotton futures market, domestic cotton prices have climbed rapidly, which has caused heavy pressure on cotton spinning enterprises which account for more than 60% of cotton cost.

"The cotton industry chain is very long, and it is related to all aspects of the national economy and people's livelihood. Once the supply exceeds demand, it will rely heavily on imports like soybeans, and the impact on China's entire textile and garment industry will be very large."

Li Ruzhong, deputy director of the cotton research center of Shandong Academy of Agricultural Sciences, told reporters of "financial and Economic Weekly".

Cotton prices have been fluctuating in recent years, and cotton prices have reached a new high this year, making the market's voice for the country to strengthen its macro tone.

Continued

"Shortage of supply is the main driving force for cotton price rise."

Xu Xiaoqing, Vice Minister of rural economic research of the State Council Development Research Center, said in an interview with the finance and economics weekly.

In the first half of 2010, due to the weakening of the financial crisis, the export of China's textile and garment industry was restored, and the demand for cotton increased greatly.

According to the Ministry of agriculture data, exports of textiles and clothing were $88 billion 800 million in 1~6 months, an increase of 22% over the same period last year.

However, the impact of the financial crisis in 2008 led to a sluggish export market for cotton textile products, a low cotton price and frustrated cotton growers' cotton planting. In 2009, China's cotton sowing area was reduced by 12 million 400 thousand mu.

China's total cotton output in 2009 was 6 million 370 thousand tons, down 1 million 120 thousand tons compared with 2008. In the normal cotton production year, cotton gap was around 4 million tons, and the reduction in 2009 led to a further increase in cotton gap this year.

At the same time, in August this year, there were more rain in the the Yellow River basin, which was extremely unfavorable to the cotton growing in the bud stage, resulting in the reduction of cotton yield and quality. Li Ruzhong estimated that the total cotton output will decline by 20%~30% this year.

According to the National Bureau of statistics, there was a difference of 2 million 690 thousand tons between cotton supply and demand in 2009, compared with 6 million 260 thousand tons in 2010, an increase of 3 million 570 thousand tons compared with last year.

On the international side, the cotton production in Pakistan caused by the floods, the increase in import demand from China and Brazil, India's restrictions on cotton exports, the continued depreciation of the US dollar, and the promotion of the international cotton futures market...

All affect domestic cotton prices.

In order to ease the contradiction between supply and demand in the cotton market, the Chinese government began to throw away its reserves in August 10th, but from the trend, the price of dumping and storage has gone up and down, and the bottom has rebounded at the end of August, and has increased rapidly after mid September.

For the unusual performance of the cotton market, Mao Changqing, an analyst at CITIC Securities (600030), said in an interview with the finance and Economic Weekly that the market is expected to have higher cotton prices in the future because of the obvious reduction in cotton production this year.

At present, Shandong, Xinjiang and other major cotton producing areas have started to acquire new cotton, and the highest purchase price of seed cotton in some parts of Shandong is over 6 yuan / Jin.

Whether the new cotton listing will stabilize the current cotton prices? Du Min, the Ministry of agriculture's Rural Economic Research Center, told the "financial and Economic Weekly" reporter that the state reserve cotton inventory is limited, and the demand for cotton is still strong under the expected reduction in production. The market gap is very large. The new cotton market has limited effect on the control of cotton prices, and the trend of price rise will continue to spread in the future.

New reshuffle of textile industry

Cotton generally accounts for 60%~70% of the cost of cotton textile enterprises. The rise of its price affects the downstream industries. Many small and medium-sized textile enterprises say that the increase in cotton prices has made the enterprises "overburdened".

As far as the textile industry is concerned, the bearing capacity of each link has gradually weakened, and the price increase of cotton yarn, cotton fabric and cotton products has been decreasing progressively.

The head of the purchasing department of Shandong Yantai Home Textiles Co., Ltd. told the financial weekly magazine that the rise in cotton prices had a great impact on the company's orders and exports. This year's purchase of cotton is quite difficult.

For some strong textile enterprises, we can rely on rich stock to deal with the current pressure of price rise, or to develop their own cotton planting base directly, but for small and medium sized textile enterprises with tight funds, they can only choose to reduce production or stop production.

Hebei Handan De Yuan Textile Co., Ltd. is a small textile enterprise. The head of the company told the financial weekly magazine that since the beginning of this year, facing the pressure of RMB appreciation and labor cost rising, the profit margins of the company have been limited, and the current high price of cotton makes the company at the edge of life and death.

"We hope that the country is in the

The textile industry is a traditional dominant industry in China. The annual export volume accounts for 1/5 of the total foreign exchange earnings earned by China's merchandise exports and over about 20000000 of the total industry employment.

In the current international financial crisis, the textile industry has just entered the stage of restorative growth after experiencing the impact of RMB appreciation and export tax rebate reduction.

In Du Min's view, cotton prices continue to rise, indicating that textile enterprises still have some profit margins, and cotton prices are still within the scope of the market's digestion and acceptance.

For textile enterprises, efforts must be made in new product development, brand cultivation, pformation of traditional industries and increase of added value in order to truly grasp the bargaining power and initiative of the international market.

"Cotton prices will accelerate the reorganization and integration of the textile industry, promote the concentration of the industry to rise, and a number of small and medium-sized enterprises will be eliminated, which is also the general trend of industrial adjustment."

Du Min said.

Control hand

The excessive rise of cotton prices has attracted the attention of relevant ministries and commissions.

On the morning of October 14th, the national development and Reform Commission convened a joint meeting on cotton macro regulation and control, analyzed the situation and studied the measures to stabilize the cotton market.

It is requested that the relevant departments should jointly make efforts in accordance with their respective division of labor, rectify market order, crack down on malicious speculation and other disrupting market order, and make other regulatory plans.

Prior to September 27th, the seven ministries and commissions of the national development and Reform Commission, the Ministry of Finance and the Ministry of agriculture jointly held the national teleconference on cotton work. They said that they could make good use of the international market resources through the reserve adjustment and effective utilization of the international market resources, maintain the basic balance of total cotton, promote the pformation of the textile industry development mode, and speed up the structural adjustment and industrial upgrading of the textile industry.

However, since August, although the state has actively launched the dumping behavior, the price of cotton has been rising steadily due to the prominent contradiction between supply and demand in the cotton market and the anticipation of higher market prices.

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The national development and Reform Commission price monitoring center related personage to the "finance and economics weekly" reporter said, cotton spot price is driven by futures, and ICE is the most important pricing center of global cotton at present.

The state should consider how to control the price changes in the international market, especially the futures market.

"In the face of international price fluctuations, China often can only passively accept, in the long run, this is unfavorable for the development of the whole industry."

The source said.

And Li Ruzhong believes that the state should consider the long-term consideration, introduce relevant policies, stabilize the cotton planting area and expand the total output. At the same time, through the input of science and technology, increase the yield per unit area and guarantee the domestic cotton rate of not less than 70%, so as to basically safeguard the safety of the entire textile industry.

India, the largest producer of cotton, set up the lowest support price for cotton and subsidized cotton development through the India Cotton Corp. Pakistan also set up the price of cotton protection. Since 1994, Mexico has implemented an agricultural plan to subsidize cotton farmers for more than three years, with a subsidy of US $73 and a $129 subsidy for plant protection.

The US cotton growers enjoy a subsidy of up to 89% from the US government, that is, the government subsidy of US $89 per US $100, effectively ensuring the stable production of US cotton.

Cotton growers in China currently enjoy only 15 yuan per mu of good seed subsidy.

Comparatively speaking, the foundation of China's cotton industry is extremely fragile.

In this regard, Du Min said that the instability of cotton prices is an important reason for the enthusiasm of farmers to grow cotton. The state should take the lowest protective price measures for cotton and start at the right time, so as to ensure the interests of farmers.

"The policy of macro adjustment of the state should be further increased in terms of grain subsidies, agricultural subsidies and agricultural insurance, including the construction of cotton bases, so as to enhance the comprehensive production capacity."

Du Min said.