Cotton Production In Dezhou: Domestic Cotton Prices Will Run High In The Short Run

After "garlic you ruthless", "beans you play" and "sugar Gao Zong", the recent cotton price is also "rising". In early September this year, new cotton came into the market, cotton prices like a runaway wild horse, crazy rise.

In less than two months, cotton prices rose by 47%, the highest ever.

Such a high cotton price has brought great pressure to downstream textile, weaving, clothing and other industries.

What has happened to cotton prices?

Cotton prices continue to grow and cotton yields increase.

According to Yu Xiuzhi, Secretary General of Dezhou Cotton Association of Shandong Province, Dezhou is one of the key cotton producing areas in the country. The annual cotton planting area is 200-300 mu.

But this year, the cotton field area is only 1 million 550 thousand mu, 32% less than the previous year, the smallest area in nearly 11 years.

In the middle and August of last year, a continuous large range of high intensity rainfall and cloudy weather occurred in the region, which had a great impact on cotton yield and quality. The average yield per seed cotton was only about 210 kg, which was more than 20% lower than that in the normal year.

Since the launch of the new cotton market this year, domestic cotton production has been cut down.

Although cotton production in Dezhou has been greatly reduced this year, cotton production has not been reduced due to a record high cotton price.

According to the average yield of 210 kilograms per mu and the average selling price of 12.20 yuan / kg, the output value of Mu is 2562 yuan, and the direct cost of planting is 393 yuan / mu (excluding labor cost, the cost of land package and the cost of picking up cotton), plus 15 yuan per mu of good seed subsidy, 2184 yuan of mu income, more than 625 yuan of grain per mu, which has completely changed the situation that cotton is not as good as grain yield in recent years.

Increase in supply and demand to boost cotton prices

"Cotton production is decreasing and demand is increasing, and the imbalance between production and demand has led to a surge in cotton prices."

Liu Guizhou, deputy general manager of Dezhou silver dragon group, said the reason for the rise of cotton prices this year.

Liu Guizhou said that since October last year, China

It is understood that China is the largest cotton producer in the world. In recent years, the total output of cotton in China has been maintained at around 7 million tons, and the demand is about 10 million 500 thousand tons.

The China Cotton Association predicts that the total output of cotton will be 6 million 640 thousand tons in 2010, and the gap between production and demand will be nearly 4 million tons.

Dezhou is a traditional cotton producing area. Due to the low benefit of cotton planting in recent years, the enthusiasm of farmers to plant cotton has decreased, and the area has decreased year by year. In 2008, the cotton field area in the whole city was 2 million 890 thousand mu, and 2 million 300 thousand mu in 2009, only 1 million 550 thousand mu this year, and this year suffered waterlogging again. The yield per unit area decreased sharply, and the total output of lint cotton in the city was only 120 thousand tons, about half of the normal year.

The annual cotton consumption of the city is about 500 thousand tons and needs to be purchased from abroad.

On the one hand, the annual reduction of area and production. On the other hand, after the financial crisis, the textile industry began to recover, and the demand for cotton increased day by day, the gap increased, and cotton prices continued to rise.

In response to soaring cotton prices and stabilizing market prices, the state began selling cotton reserves in early August this year, dumping 600 thousand tons in two months. However, due to the fact that supply is far less than the demand of enterprises, bidding pactions are fierce and prices continue to rise, which has failed to curb the rise in cotton prices.

In September 28th, the state continued to issue 400 thousand tons of cotton reserves, and still no results. Cotton prices continued to rise and hit new heights.

China has become the largest importer of cotton in the world, accounting for about 40% of world cotton trade each year.

Because of the reduction of cotton production this year, a large number of imports are needed to promote the global cotton prices.

It is understood that in recent months, the international cotton prices have also reached new heights. From the end of 7 to the beginning of October, international cotton prices have risen by nearly 50% and hit 15 year highs. Cotton futures in New York have been rising again and again, rising to 1.2471 dollars per pound, the new high since the 1861 civil war.

Downstream is difficult to bear cotton prices continued to rise fatigue

Cotton prices continue to rise, the chain of cotton industry chain reaction is different, and showing no wonder for many years: cotton farmers reluctant to sell high prices, unwilling to sell; cotton enterprises believe that the risk is too large, unwilling to accept; textile enterprises too high cotton prices, unwilling to buy.

Cotton prices are high. Cotton growers are very happy. After half a year's hard work, they are not involved. Although cotton production is reduced this year, the price is more than doubled.

Farmers have a habit of buying, buying, selling, selling or selling. The higher the price of cotton, the more reluctant the cotton farmers are to sell, hoping that the price will be higher.

Although local cotton picking is coming to an end, the average household turnover is less than 20%, which is significantly lower than in previous years.

It should be said that cotton prices should go up, and cotton purchasing and processing enterprises should be happy, but in fact, they are walking on steel wires.

Wang Zigui, general manager of Wujiang county's Silver River cotton industry Co., Ltd. complained: "because of the reduction in cotton production and the small amount of resources this year, the acquisition and processing enterprises are competing to buy up, and the purchase price of seed cotton has been on the high side. With the increase and sale, it will lose 400-500 yuan / ton, and the price of the purchase and sale will hang upside down."

Most cotton companies purchase funds from social fund-raising or commercial bank loans, with a monthly interest rate of about 1 cents, and the monthly interest rate is only 250 yuan per ton.

The acquisition processing enterprises take great risks and trembling with fear. If the lint cotton market is flat or down, cotton enterprises will suffer serious losses.

In 2003, cotton prices were rising and falling and some cotton enterprises suffered heavy losses.

Fortunately, the price of lint has continued to rise since the launch of the new cotton market this year. It has risen from 18300 yuan / ton in the early September to about 27000 yuan per ton.

The initial acquisitions were not sold, and the profits were considerable.

According to the Dezhou Cotton Association survey, there are more than 300 cotton processing enterprises (400 of which are 85 packaged models). At present, there are more than 150 involved in the purchase. Some enterprises are not willing to scale up the purchase because of the high price and the high risk.

In recent years, cotton prices have gone up astonishingly and far too high. The acquisition and processing enterprises are in a panic. They believe that the risk is too high, and the pressure of capital increases. Some enterprises have stopped waiting and waiting.

The downstream of cotton processing is spinning, weaving and clothing industries.

It is understood that cotton prices to downstream industries conduction lag period, the current downstream industry prices are not up to cotton prices increase.

According to people concerned, the pmission effect of the rising cotton has not been fully reflected at present, because many garments on the market are now produced before the cotton price rises, and the upstream price rises have not yet been completely released to the downstream.

The rise of cotton prices has brought great pressure to the enterprises such as spinning and clothing, and even will affect the survival of small and medium-sized enterprises.

{page_break}

Last October to August this year, it should be said that the textile industry has had the best time in the past ten years.

Cotton prices have risen in recent years, and cotton yarn prices have also risen steadily, but the rate of increase is not up to the increase in cotton prices.

Taking the sales price of 32 pure cotton yarns as an example, it has risen from 26200 yuan / ton to 33200 yuan / ton in the past two months, or 27%, much lower than the 48% increase in lint price.

This means that the spinning enterprises should digest some of the price increase factors and compress the profit margins accordingly.

It is understood that at present, most of the raw materials used by the spinning mills in Dezhou are early purchase and recent auction of national cotton stores, which are relatively low in price and there is still room for profit.

For the current high cotton prices, textile enterprises can not afford it. Enterprises can only take flexible orders, and dare not take long and medium sized bills.

The cotton price has been pmitted to the downstream garment industry, which has raised the survival cost of garment enterprises. But in the export trade, they dare not raise the price, and the profit space has been greatly reduced.

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.

At present, the cotton and textile industry is in a series of upside down phenomena. The acquisition and processing enterprises are losing money with the purchase and sale.

Analysis of the industry, the cotton industry downstream capacity is approaching the upper limit, cotton prices continue to rise in space and height will be very limited.

Output is difficult to rise and cotton prices are running high.

At present, such a high cotton price is temporary or will be maintained for a long time? Industry experts believe that China's low cotton price era is coming to an end, and cotton prices will remain at a high price for a long time.

This is because: first, although the yield of cotton seed is slightly higher than that of grain crops this year, it is lower than that of other economic crops such as capsicum and vegetables.

Second, the rate of mechanization of seed cotton is low and time consuming.

The degree of mechanization of grain production has increased year by year, labor intensity has been reduced and employment has been reduced.

During the whole growth period of cotton, besides seeding, mechanization can be realized. Others, such as production management, medication and pick-up, need to be completed manually.

Third, planting cotton is not as good as earning money from going out to work.

At present, nearly 80% of young people in rural areas work hard to earn a living, earning one thousand or two thousand yuan a month, much more than planting cotton.

Fourth, cotton subsidies are less.

Grain crops are subsidized by improved varieties, grain subsidies and comprehensive subsidies for agricultural products. The total subsidy is nearly 100 yuan per mu, and only 15 yuan per mu is provided for seed cotton. There is no comprehensive subsidy for seed cotton subsidies and agricultural subsidies.

The comparative efficiency of cotton planting and the diversification of farmers' way of making money have made farmers' enthusiasm for planting cotton less and less.

Even if the cotton price of 2009 reached the highest historical price of 8 yuan per kilogram, Dezhou's cotton planting area increased by 32% instead of 32% this year. The cotton price now reaches more than 12 yuan per kilogram. According to the investigation, the cotton planting area will not increase much next year.

Experts believe that in recent years, farmers' enthusiasm for planting cotton has declined, and the state should introduce policies to increase the income of cotton farmers.

First, we should increase the subsidy for seed cotton, introduce Cotton Subsidy, increase the comprehensive subsidy for cotton seed farming and increase the subsidy amount of cotton seed subsidy according to the grain subsidy method. Two, we should take part of the profits from the Central Cotton Storage Corporation to build up a high-quality cotton base county in the main cotton producing area, and support the development of the cotton professional cooperative.

Xinjiang is the largest cotton producing area in the country, and its output accounts for about 1/3 of the whole country. In recent years, due to the rising cost of picking flowers, the cost of cotton planting has increased and the efficiency has decreased.

As far as the whole country is concerned, cotton production will be maintained at 7 million tons in the next few years or even years.

That is to say, the annual import of about 3000000 tons (about 8 million tonnes of world cotton trade) can achieve a general balance between production and demand, and China's large import will inevitably lead to the rise of international cotton prices.

Accordingly, cotton prices will be running high in the next few years.

Textile enterprises how to adjust the product structure?

China is the largest cotton producer, consumer country and textile exporter in the world. Cotton production accounts for about 1/3 of the world's total output, and consumption accounts for over 40%. There are about 40000000 Cotton Planting Farmers in China, 140 million cotton farmers, about 20000000 textile enterprises, and the output value exceeds 100 billion yuan.

Dezhou is an important textile base in the whole country and the whole province. There are more than 240 cotton textile enterprises, 4 million 500 thousand spindles of spinning capacity, and 500 thousand tons of cotton per year, while the theoretical self sufficiency rate of cotton in the city is only about 25%, and the contradiction between insufficient production and demand is even more prominent.

At present, the price of cotton is surprisingly high. Although the pressure of rising cotton prices can be partly pferred to downstream industries such as weaving, clothing and so on, it has greatly reduced the profit margins of textile enterprises. At present, the high cotton price of 27000 yuan / ton exceeds the profit and loss balance line of textile enterprises, which is difficult for enterprises to bear.

In view of the current high cotton prices, some textile enterprises in Dezhou have intensified the development of new products, and adopted non cotton fibers to resolve the impact of high priced cotton.

Dezhou Huayuan technology, Dezhou Hengfeng textile, Lingxian County Baoding textile and other enterprises have increased the application and new products development of new fibers such as Tencel, modal, milk fiber, bamboo fiber, corn fiber, soybean fiber and cashmere, fox hair, silk and other animal fibers. The market prospect is good and the economic benefit is considerable.

{page_break}

With the advent of the high cotton price era, the future of textile enterprises is not easy.

The author suggests that we should speed up the structural adjustment and industrial upgrading of the textile industry, eliminate backward production capacity, reduce and upgrade, raise grades and increase efficiency.

At the same time, we should learn to hedge futures market and avoid price risk.

First, textile enterprises should intensify the development of new products, develop yarns to high and multiple components, increase the consumption of non cotton fibers and eco-friendly fibers, and reduce their dependence on cotton.

Two, we should speed up the adjustment of product mix and comprehensively enhance the market competitiveness.

The introduction of advanced technology and equipment, through the upgrading of technology and equipment, improve the level of technology and production capacity of enterprises, and reduce production costs through large-scale production.

Extending the industrial chain, forming a complete industrial chain of spinning, weaving, printing and dyeing, fabrics, clothing processing and so on, making the textile industry bigger and stronger and enhancing the ability to fight against market risks.

Three is to train backbone enterprises.

Although there are many textile enterprises in Dezhou, most enterprises are small in scale and low in technology level.

Of the more than 240 cotton spinning enterprises in the city, only 15% of the enterprises above 50 thousand spindles are produced, most of them are small businesses.

In the future, we should cultivate backbone leading enterprises, vigorously support the development of dominant enterprises and export backbone enterprises, and cultivate a large number of large enterprises and enterprise groups with well-known brands and independent intellectual property rights, prominent main industries and strong core competitiveness.

We should accelerate the development of small and medium-sized enterprises with competitive potential, high technology content and innovative ability, and improve their matching capabilities with large enterprises to form a more competitive group structure.