Textile And Garment Enterprises Take Risks In Non Cotton Route

　 Since last year, cotton prices have gone up and down, causing the "big cotton" textile and garment enterprises to suffer. At the 109th Canton Fair, many enterprises surveyed said they had begun to reduce their share of export of cotton products so as to seek stable profit margins.

Last year, cotton prices, which had been stretched all the way, were showing signs of deflating recently, but the recent fall in cotton prices seems to be insufficient to restore the trust that some of the transformed textile and garment enterprises once had.

The 109th session Canton Fair Most of the transformed textile enterprises clearly stated that the fall in cotton prices will not change the decision of their current export products to take non cotton routes. Chen Xinzhong, manager of Nantong Wei Ma home textiles Co., Ltd. is a common saying of many spinning and weaving enterprises: "no matter cotton price rises or falls, the key is that our enterprises have laws to follow, but now cotton prices are rising and falling without justification, prices are going up and down, and businesses are suffering, and there is no way to decide."

The fall in cotton prices makes it difficult for companies to show their colours.

The latest data show that in April 29th, China cotton The price index was 26 thousand yuan, down 382 yuan from the previous trading day. And 28 days ago, the index remained at a high level of more than 30 thousand yuan.

Turning to the reasons for the decline in cotton prices, Chen Xinzhong analysis said that after last year's successful speculation on cotton, part of this year's hot money has gradually withdrawn from the cotton market. At the same time, enterprises and purchasers mostly give up or compress the share of cotton products for cost reasons, thus reducing the demand for cotton market, and further inhibiting cotton prices through supply and demand.

However, there is a big dive in cotton prices. Spinning and clothing export Corporate responses did not show much joy.

Wan Bingzheng, a business manager of Yantai North home textiles Co., Ltd., is similar to Chen Xinzhong. He believes that for export enterprises, the most important thing is the stability of cotton prices. "When the price is high, the cost of the business increases, and the quotation of the enterprise increases, and the customers are reluctant to place the order. But on the contrary, the cotton price goes down too fast. Although the production cost of the enterprise is reduced, merchants will still have reservations in order to prevent a further decline in the cotton price in the later stage, so it is difficult to improve the order of the enterprises." Wan Bingzheng said.

Chen Xinzhong added that the current decline in cotton prices is urgent, but it is not as high as cotton prices soared last year, and is still at a high cost for spinning and weaving enterprises.

When to return to long-term performance

In fact, since the soaring cotton price effect began to ferment, a new model of "non cotton products" was born among the large cotton producers in spinning and clothing enterprises.

The characteristics of this spun clothing enterprise are that cotton products have been occupying a considerable share of their export products before the cotton prices soar. Then, with the rise of cotton prices, they began to change the route of other products such as chemical fiber and hemp.

For example, Chen Xinzhong's company belongs to the new category of "non cotton products". According to him, before the adjustment, the proportion of cotton products in the company's export products was 80%~90%. After adjustment, the export quota of cotton products has been reduced to 20%~30%, and the output of cotton products has decreased by 60%~70%.

Wang Yao, a clothing manager of Anhui technology import and export Limited by Share Ltd, told our reporter that the share of their cotton products exports also decreased from 40% to 20%.

Both Chen Xinzhong and Wang Yao are right to say that this strategic turn is the result of the joint action of the company and the customer demand. On the basis of the transformation, Chen Xinzhong said that as a substitute for cotton products, the chemical fiber household textiles, which are cheap, are very popular with merchants. In particular, they introduced the upgraded fabrics of ordinary chemical fiber, both softness and touch are all equal to pure cotton cloth, but the selling price is lower than that of pure cotton products. {page_break}

As for Wang Yao, there are more practical considerations from the enterprise. He pointed out that as the garment industry, the production schedule decided that the raw materials for their purchase in the months of 3~4 and 6~8 were still some time away from the next round of raw material procurement. So at present, he has not yet decided whether to purchase cotton raw materials in large quantities. "Everything depends on the late performance of cotton prices. If this downward trend can be maintained and slowly stabilized, it will not rule out the proportion of cotton products in export products."