Zhengzhou Garment Enterprises Appear To Be Weak In The Face Of Soaring Cotton Prices.

In just 3 months, the country cotton The average price has surged from 18166 yuan / ton to 28891 yuan / ton, rising by 60%. Cotton price The highest in 10 years.

Following the rise of the "necessities" such as "you play", "garlic you are ruthless" and "sugar Gao Zong", some people use the "cotton needle" to describe the fierce characteristics of the soaring cotton price.

For most of the smaller brands of Zhengzhou clothing enterprises, now the days are even more sad.

Price increase

Domestic cotton prices soaring all the way, the highest in 10 years.

　　 Zhengzhou According to the information released by the commodity exchange, in November 8th, the Chinese cotton price index, which reflects the average cotton price in the main regions of the country, was 28891 yuan / ton in November 8th, compared with the price of three yuan per ton per day.

Compared with three months ago, China's cotton price index rose nearly 60%, and the market price and the rise were all the highest in nearly 10 years in China.

Therefore, for cotton prices such a sharp rise in momentum, some people call it "Mian Li needle".

Analysis

Reduction of production and speculation of idle funds to drive up prices

"Domestic cotton prices began to rise last year, but the increase was relatively mild, until August this year, there was a sharp upward trend, almost every day the price is refreshing." Ma Wenfeng, an analyst with Beijing Oriental Agribusiness Consulting Co., Ltd.

"The amount of currency issuance is too large, for example, at the end of 9, the balance of cash and check deposits in circulation has reached 24 trillion and 380 billion yuan, up 20.9% over the same period last year. The current stock of money is as high as 80 trillion yuan, almost double what it used to be. " According to Ma Wenfeng analysis, under the situation of economic recovery, surplus money becomes hot money active in the market.

"Because the real estate market is in the control period, and garlic, mung bean, ginger and other agricultural products have been sold out, so the hot money that can't stop is staring at the cotton." Zhengzhou China Grain Polytron Technologies Inc analyst Chai Ning explains.

But Ma Wenfeng believes that the main reason for the increase in cotton prices is the reduction in production: "this year, the south is affected by bad weather, and cotton production is expected to decrease by 5% on the basis of last year, making the supply and demand of domestic cotton more strained."

Influence

The days of garment enterprises are even more sad.

Cotton prices have risen all the way, and the biggest impact has been on the traditional garment processing industry.

"A month ago, pure cotton cloth was 4 yuan / meter, but now it has risen to 6.5 yuan / meter, the increase is more than 60%." Hou Jianling, manager of production department of Zhengzhou Dun Sen Clothing Co., Ltd. said she wanted to buy more raw materials, but because of the high price, she bought 20 thousand meters for the first time.

"Now all kinds of cotton raw materials have risen by at least 40%, and even accessories have begun to rise." Hou Jianling said that cotton prices rose sharply in recent months, making the procurement cost of raw materials increased by about 40%.

"When the previous manufacturers gave us quotations, they were generally valid for one month, but September is 20 days effective, and the validity period has been shortened since then. The quotation is only valid in the morning or afternoon." Han Zongze, director of product department of Henan Tai Si Garments Co., Ltd.

The labor cost of garment enterprises is also rising. "Before a pair of trousers processing fee is 7.5 yuan, now is 8.1 yuan, and the worker's wages also increased this year two times, the adjustment range is 8% and 10% respectively." Zhao Qinghe, general manager of Zhengzhou Dun Sen Clothing Co., Ltd., told the business daily reporter that in Zhengzhou today, the minimum wage of 3000 yuan is not paid every month, and no clothing workers can be recruited. {page_break}

Challenge

Zhengzhou clothing enterprises call "price increase" insufficient.

Nowadays, the clothing enterprises in Zhengzhou are facing the double pressure of rising raw materials and increasing manpower cost, and the pressure is very large for many years.

"In the current situation, the total cost of production and operation of enterprises has increased by nearly 20%, which is no small challenge for enterprises." Liu Peiyang, assistant director of Zhengzhou Dun Sen Clothing Co., Ltd., told the business daily reporter that even if the gross profit margin of the clothing brand of the Zhengzhou brand is only about 30%, the cost growth rate is so large that the business day is very sad.

"These days, the company has just started the next spring and summer product order meeting. The average price will be raised by 5% to 10%. For example, a pair of trousers that sold 190 yuan this year will be sold for 220 yuan next year." Liu Peiyang explained that if the increase is too large, it will affect the expansion of sales channels and even affect product sales.

In contrast, the survival of small and medium-sized garment enterprises is more difficult. "Now that the combined cost has increased by nearly 20%, let alone profit, it is difficult to maintain survival." Wang Peijun, general manager of Zhengzhou Mei Xin Clothing Co., Ltd.

However, for YOUNGOR, nine Mu Wang, Qipai and other well-known domestic garment enterprises, the impact of rising cotton prices is not great. "We are going through the middle and high grade route with gross margin of not less than 60%, so the increase in raw material prices and the increase in labor costs have little impact on the company. But taking into account the brand image, next year's spring and summer clothing prices will increase by 10% to 20%. Liu Zhi, director of marketing department of YOUNGOR apparel Co., Ltd., Henan branch.

The responsible persons of nine well-known clothing enterprises such as nine Mu Wang and Qipai also expressed similar statements to the reporters yesterday afternoon.

proposal

Small and medium-sized clothing enterprises can borrow lots of products and small variety products to survive.

"For the dominant brand, its style design and technical content are generally relatively high, the added value of the brand is more, and the profit space is relatively larger. Even if the total production and operation cost is raised by nearly 20%, it will not make their day sad." Liu Jixiang, Secretary General of Henan Garment Association, said.

He believes that even when the product price increases, the advantage of the brand is more adequate, because this part of the consumer groups are mainly Buying grades, buying feelings, not too sensitive to price increases, a slight rise in prices will not have a big impact on sales.

"But for most of the enterprises in Zhengzhou, the days are not very good, because their brands are relatively weak, the added value is relatively low, and the profit space is generally only a little more than 10%. Consumers' recognition and loyalty to their brands are relatively low. If the price increases are obvious, wholesalers, retailers and consumers may not accept it easily. Qin Zicheng, President of Zhengzhou clothing association, explained.

Qin Zicheng believes that the sharp rise in raw materials and the obvious increase in human cost make Zhengzhou's garment industry face the most serious challenge in the past 10 years. The survival of SMEs is even more difficult. If we want to survive, we must go on the road of scale and branding.

"The price increase of big brand clothing enterprises will drive the price of small and medium enterprises to rise, but for the latter, every time the price is raised will affect sales volume. We can adjust our business ideas and respond to challenges in a fast market response, such as developing many kinds of clothing with multiple quantities and small varieties to attract consumers to buy." Liu Jixiang suggested.