Song Ming, Chairman Of Cotton Spinning: After The "Hua Gu Mian Palm"

"One carelessness and lose the game, our current situation is struggling on the line of life and death."

The 2010 is going to draw a full stop. The stock market is fluctuating red and green, and the property market stands firm under the control storm. The only way to maintain a single trend and keep climbing is price.

Garlic, soybean oil, sugar and Qi Shua sang a song of triumph, playing the symphony of public consumption.

And the champion who led the prices of these agricultural products is cotton.

In less than 3 months, the spot price of standard cotton rose sharply from 18 thousand yuan / ton in September to 33 thousand yuan / ton in November, and the market is changing rapidly. Small and medium-sized enterprises like Wilton textile and garment company have no strength at all.

The story told by Wilton, general manager of the textile and clothing company of Song Ming, is like a breathtaking martial arts drama.

"Sky price" cotton = disaster

"China once established itself as a textile country, dressed and dressed in the first place of people's necessities.

Although our company has just been established for 3 years, it has made a small scale in this garment industry, and is just trying to put it on the right foot. Suddenly, the cotton price has gone up madly when anyone is not ready. It has greatly increased our cost, squeezed out our profits and destroyed many orders. The company is almost in the face of collapse.

Song Ming, general manager, spoke directly to the theme of the interview.

"In fact, from last year, the overall trend of cotton prices is rising.

However, in 2010, the purchase price of cotton was still 15 thousand yuan / ton, with the prices of all kinds of agricultural products rising, after May, it rose to 18 thousand yuan / ton.

This September is the season when new cotton is listed. According to convention, the price should not rise substantially at this time. At that time, cotton prices have entered a fast rising channel, breaking through 20 thousand yuan / ton, and then rapidly rising to the highest point 33 thousand yuan / ton in November.

Looking back at the months when I could not sleep in the past, song still seemed to have a lingering fear.

"Other agricultural products are rising by one yuan, and the raw materials of our clothing processing are going up by one thousand blocks and one thousand blocks. Can you imagine that the price of a ton of cotton yarn will increase by 10 thousand yuan, and the company will have to pay 30 million yuan more."

Song Ming said that the price of raw materials such as cotton has occupied 60-70% of the cost of terminal garments. The rise of cotton prices mercilessly plundered the profits of terminal garment enterprises and even threatened their survival.

To the chagrin of song and Ming is that many orders signed before the increase of cotton prices, the risk pferred to the lower link, all the cost pressure must be borne by their own enterprises.

"Every order we made at that time was at a loss.

Because of the huge fluctuation of cotton prices, the cotton spinning factories that had been co operated destroyed the bill and forced us to make a temporary increase in price before shipment.

We can't afford to ride a tiger, but we can only lose money to do business. "

Under the impact of frenzied cotton prices, Wilton textile and garment company had to raise orders.

In fact, customers and ordinary people have already established a set psychological price for clothing, so the price increase of terminal enterprises is the smallest.

"Even if the price is raised by 30%, the current order price is still difficult to cover the increase of the cost. The price increase can only force the price of cotton to rise, and the profit margin of the enterprise is very small."

Song Ming said.

"The order signed before the price rises is doomed to lose money. After the price rises, the cotton can not sign the order, and because of the shortage of raw materials, we are forced to give up some of the orders."

One leaf knows the autumn of the world, and for most of the cotton processing enterprises, this 2010 is difficult.

Internal and external troubles

Cotton began to rise in September of this year, and September is the time for new cotton to go public.

"Now that all kinds of agricultural products are rising in price, cotton can not be left out.

I saw reports that Wenzhou organized a special cotton frying regiment to rush into Xinjiang in the harvest season.

They spotted this season, and scrambled cotton and cotton traders to rush to buy and raise seed prices.

Behind the soaring cotton prices, there is indeed a push for speculative capital.

But the fundamental reason is the serious imbalance between supply and demand. The annual output of the cotton market this year should be 7 million tons, and the final harvest will be 6 million tons. According to the amount of cotton used in China 10 million tons per year, the gap will be at least 4 million tons. The root cause of the surge in cotton prices is the imbalance between supply and demand.

Song Ming analyzed the market like this.

Not only the Chinese cotton market has a big gap, but also the global cotton stocks are in a tight state.

The shortage of production capacity and tight supply make cotton processing enterprises fall into a long and fierce battle.

A glimmer of hope

When there was no road ahead, there was a small path in the air.

After reaching the highest level of 33 thousand yuan / ton in November 9th, the recent cotton prices began to enter a continuous downward path continuously. Up to now, the price has reached 25 thousand yuan / ton.

Can Song Ming's textile and garment companies turn around and turn around a loss?

"Cotton prices are too unstable, sometimes falling rapidly, sometimes rising rapidly, the ups and downs are obvious.

Cotton prices are not as strong as before, but the price cut is not good enough to make up for the big losses before, and the price is hard to revert to the level before September.

Now that we have settled the order, we will immediately lock in the price with the cooperative factory to control the cost of raw materials to ensure the revenue of the orders we made before.

However, the prices of raw materials on the factory side have not stabilized at the previous level.

He concluded with a calm conclusion.

Perhaps we can only hope for next year.

The annual output of the cotton market this year should be 7 million tons, and the final harvest will be 6 million tons. According to China's annual cotton consumption of 10 million tons, the gap will be at least 4 million tons. The fundamental reason for soaring cotton prices is the imbalance between supply and demand.