What Is The Survival Of Cotton Textile Enterprises?

It started at the end of last year and broke out in the middle of September this year.

In the face of soaring cotton prices, what is the survival of cotton textile enterprises? How do they cope with this "crazy cotton"? For this reason, this reporter visited several cotton textile enterprises in Xiaoshan and Shaoxing, Zhejiang, and followed them.

The raw material crisis Xiaoshan district belongs to Hangzhou city. Shaoxing county is part of Shaoxing city. It is adjacent to the south wing of Yangtze River Delta and central and Northern Zhejiang province.

Because both of them are famous textile cities and textile trade centers all over the country, and have close connection and cooperation in the textile industry chain, they are called "Xiaoshao" in the industry.

In 2008,

In the first half of 2010, Xiaoshao textile exports rebounded in an explosive fashion. Taking Shaoxing as an example, from 1 to July, exports of textiles and clothing were US $7 billion 740 million, an increase of 36.9% over the same period last year, which led to a record of 3 consecutive months of exports.

Insiders have been optimistic that Xiaoshao textile industry ushered in the spring.

However, in the second half of this year, as the global cotton price rose sharply, the textile industry encountered a sudden raw material crisis.

From September to early November this year, domestic cotton prices rose steadily, from about 18 thousand yuan per ton to 30 thousand yuan, or about 70%. in the textile industry, cotton is the most basic raw material, especially in underwear, home textiles and other fields, cotton fiber accounts for almost 60% to 70% of the manufacturing cost of the enterprise.

In order to alleviate the tight supply of the market, the State Reserve has launched about 1000000 tons of reserve cotton since August, but it has little effect.

The reporter noted in the interview that compared to the depression at the end of 2008, the market situation of Xiaoshao textile market has obviously improved, but traders are not having a good time.

Not only that, cotton prices fluctuate like Domino, but also rapidly spread to all links of yarn, fabric, finishing and other industrial chains.

After the national macro-control, since mid November,

The head of Xiaoshao cotton textile enterprise has indicated that the enterprise will not enter cotton again at this stage.

They are worried that cotton prices will fall as the country's cotton prices are further regulated.

But some people were locked up. Shen Guofeng, chief executive of Xiaoshan Zhenya group, told reporters: "a small factory I know hoarding a lot of cotton at the highest price of cotton, and now the cotton price drop makes them suffer a lot."

Buy or not buy, cotton enterprises purchase cautiously, small and medium-sized cotton spinning enterprises have chosen to stop production or reduce production.

This chain reaction is also extending to the downstream textile and cloth factories.

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In the downstream market, cotton waxing purchases are mostly based on wait-and-see or inventory based strategies, with fewer new orders.

Xiaoshan's China textile procurement Expo City (China Textile City) brings together a large number of raw material yarn distributors.

Fang Guoping, deputy general manager of China Textile City, said that after the middle of November, the order quantity of the dealers in the cotton mill decreased significantly. Even after the market was not sure, even the cloth factories downstream of the spinning factory chose to wait and see.

Shaoxing Huatong Group is the designated delivery warehouse in the national cotton trading market. It almost straddles the whole cotton industry chain from cultivation, purchase to textile, dyed and finished garments.

Ji Guomiao, chairman of the board, has been struggling for more than 20 years in the industry. He outlined to reporters the basic trend of the current Xiao Shaomian textile market: the fluctuation of seed cotton purchase price, the decline of cotton spot prices, the stable price of cotton yarn, the reluctant sale of ginning plants, and the lack of procurement of textile mills, and the buyers and sellers are in the wait-and-see period.

Cotton circulation enterprises: the most important business of Huatong Group is cotton trade.

In Xinjiang, Huatong has its own cotton growing base and will buy cotton directly from cotton farmers.

"The rush to buy cotton from madness to stop buying cotton seems to have happened overnight."

Ji Guomiao sighed.

Cotton prices soared and supply was tight, mainly due to the global cotton production reduction.

US Department of agriculture information shows that global cotton output will decrease by 20% from 2009 to 2010 in the year of 2006 to 2007, and the gap between production and demand will be 3 million 500 thousand tons.

The National Bureau of statistics data show that China's cotton acreage and production has declined for three consecutive years.

From 2007 to 2009, cotton production was 7 million 620 thousand tons, 7 million 490 thousand tons and 6 million 400 thousand tons respectively.

At the end of October and early November, the purchase price of cotton spot (seed cotton) climbed to 31 thousand / ton, and the sales price of Huatong's lint rose to 33 thousand / ton. With the introduction of a series of combination boxing, the selling price of lint per ton has dropped to 27 thousand / ton from mid November to November 24th.

"If we sell at the current price, we will lose money."

Similar to the idea of Ji Guo Miao, some small and medium-sized cotton processing plants prefer to wait and see not to sell lint at low prices.