Interview With Wei Linyan, Chief Information Officer And Senior Analyst Of Jinqiao Textile Network

　　 After entering 2011, cotton prices were affected by supply and demand and the rise of international cotton prices, which rose again after the sharp rise and fall. As of March 7th, the cotton price index rose to 31005 yuan / ton. Why does cotton price change drastically and where will cotton price go in 2011?

2011 cotton situation sponsored workshop It is held at the sharp turbulence of domestic and foreign cotton market. The main purpose is to provide useful help for textile enterprises to fully understand the domestic and foreign cotton market situation and grasp the cotton market in time.

To this end, our reporter interviewed Wei Linyan, chief information officer and senior analyst of Jinqiao textile network.

Reporter: is there a difference between the sharp rise in cotton this year and the rise of cotton in the past?

Wei Linyan: with the slow recovery of the global economy, with the increase of demand, the stagnation of cotton production and the speculation of hot money, the international and domestic cotton market fluctuated sharply in the year of 2010/2011 new cotton listing. This is one of the third major changes in cotton prices since 1994/1995 and 2003/2004. Compared with the cotton price trend of the two years, the period was basically similar. The difference was that the price level and the rate of increase in 2010/2011 were much higher than those in the two years.

Reporter: what is the trend of China's cotton market?

Wei Linyan: at present, the cotton market is still more complicated. From textile enterprises economical operation The cotton price is facing downward pressure, especially in the cotton price level. But from the factors of supply and demand, acquisition cost and so on, the downlink space is limited.

From the cost of raw materials, the benefits of low and advanced products basically disappear, and high cost transmission is difficult. In 2010, spinning enterprises generally achieved better results, mainly due to low cost, high sales product efficiency and large profit margins, but downstream enterprises had difficulty in receiving disk and the efficiency was not satisfactory. With the continuous high operation of cotton prices, textile enterprises will face a high cost period this year, the profit margins will shrink dramatically, and the substantial increase in efficiency will be suppressed.

From the point of view of capital, on the one hand, high priced raw materials have increased the demand for liquid capital; on the other hand, the demand for liquid capital has increased. Spin Corporate credit is difficult. From the central bank's recent five consecutive increases in the deposit reserve ratio and the three interest rate increase, the prudent monetary policy is actually a tight monetary policy. The adjustment of monetary policy has increased the difficulty of corporate credit, and enterprises will face the problem of tight funds.

From the perspective of labor resources, textile enterprises are facing the pressure of shortage of labor and rising costs. Because of the high labor intensity, relatively low pay and the concept of the employment of textile enterprises, textile enterprises are generally faced with the problems of labor shortage and labor cost rising sharply. According to the China Textile Industry Association survey, 29.3% of the labor cost of enterprises has increased by more than 20%, and 83.8% of the enterprises are short of labor resources.

From the perspective of RMB exchange rate, the continued appreciation will increase the cost pressure of enterprises. Since the reopening of foreign exchange in June 21st last year, the yuan has risen from 6.8275 to 6.5651 in March 7th, even at a record high. The substantial appreciation of the renminbi has greatly increased the cost of exports and reduced the export efficiency. It is estimated that textile and garment exports in 2010 only lost nearly 13 billion 500 million yuan in exchange rate changes.

Judging from the current economic operation of China's textile industry, neither cotton spinning enterprises nor downstream enterprises in the industrial chain support the increase in cotton prices.

Reporter: what are the current domestic market factors to support high cotton prices?

Wei Linyan: first, the acquisition cost of cotton is relatively high. According to statistics, as of February 23rd, the average purchase price of grade three seed cotton was 11.02 yuan / kg in 2010/2011, and the average cost of folding cotton lint was 23900 yuan / ton, up 62% and 71.7% respectively over the previous year. But most of the seed cotton was purchased at the price of 12 yuan / kg, the three grade seed cotton was 13.96 yuan / kg, and the cotton lint was 30 thousand yuan / ton. Because of the high cost of acquisition, there is limited space for cotton prices to fall.

Two, cotton planting area has not been significantly improved, and the next year will still depend on imports. According to the Ministry of agriculture's cotton and Cotton Research Institute, the national cotton area in 2011/2012 is about 77000000 mu, an increase of about 4.1% over the previous year. According to this ratio, the output of 2011/2012 is about 7 million tons, and at least 30% of the total imports depend on imported cotton. Supply and demand is still an important fulcrum supporting high cotton prices.

Three, part of the hoarding cotton enterprises are looking forward to the market and continue to sell. Before the Spring Festival, some cotton hoarding enterprises with a high pressure of cotton hoarding or a shaken view of the market outlook have already sold some cotton lint, but some cotton enterprises that are firmly hoarding cotton will continue to sell and will be more aggressive in raising prices.

Four, the international cotton prices remain high and higher than domestic cotton prices, which has certain support for domestic cotton prices. In recent years, although the international cotton price has been substantially reduced, it is still much higher than the domestic cotton price. At present, the port price of the A index is 36 thousand ~3.8 yuan / ton, and the M main port price exceeds 200 cents / pound, and the port price is 36 thousand yuan / ton. Coupled with the changing policy of India's cotton export, the existing cotton resources in the United States have been reduced, and the import volume of cotton has increased considerably in the short term. The contradiction between supply and demand is hard to improve in the short term, and it also has certain support for domestic cotton prices.

Reporter: so what do you think will be the trend of the cotton market this year?

Wei Linyan: cotton prices in the past six months have gone through a series of trends, such as skyrocketing, slump, collation and recovery, and formed a trend of upward and downward dilemmas. In recent years, combined with recent trend analysis, cotton prices will remain high in recent years, and may be mainly focused on Interval Oscillation.

In the medium to long term, May is often the time point for changing cotton prices, and cotton prices are expected to be clear.