How To Deal With Resilient Cotton Rose Heartbeat, Fell Panic.

Last year, 18 thousand yuan per ton, 28 thousand yuan per ton at the beginning of this year. Cotton price The rapid rise made many cotton spinning enterprises a bit confused. But in recent months, cotton prices have plummeted down nearly 30% of the roller coaster. "The heart rises and falls," and some cotton spinning enterprises describe their feelings with such words.

Why do cotton companies rush up and down? How can those companies who ride on roller coaster deal with such resilient cotton?

"The price of raw materials in our plant has dropped from 33 thousand yuan per ton at the beginning of the year to 25 thousand yuan per ton now." The sales staff of the textile Co., Ltd. told reporters that even if the price dropped by 8000 yuan per ton, cotton prices were still high and cotton yarn products had a larger decline, which led not only to reduce the number of enterprises, but also to reduce the profits of the products.

It is not only cotton spinning enterprises, but also light textile enterprises with man-made fibers as raw materials. "The price of man-made fiber has also dropped from the price of 29 thousand yuan per ton to 20 thousand yuan per ton at the beginning of the year." Yi Yi Domestication Mr. Wu, a fiber manufacturer, said cotton prices fluctuated, which also implicated the chemical fiber industry.

Why are cotton prices fluctuating for a year? For what reason? "Most of them are artificially hyped. Last year, from 18 thousand to 28 thousand at the end of the year, cotton growers hoarding goods at the end of last year. But wait until new cotton is on the market. Cotton grower Cotton in hand is not worth the money, and selling easily leads to price dive. The current price is not high but not low. " A person in charge of the textile industry department of the Economic Commission for Industry and Commerce analysed the reporter.

Cotton prices "diving", the first impact is downstream orders. The sales staff of the company said that the number of orders this month has decreased by at least 50%. "The customers who buy the order are not buying or selling, but the cotton is going up very much. Their orders are much more, and the cotton is falling so much that the customers' orders will be reduced, because the customers are afraid that the order will be placed now, and the fabric will fall even more later."

"These two days I am free." Mr Wu, chief textile operator of the textile company, said that although the order was scarce, the factory would not stop working, and the stock of yarn finished products had reached several times as many as before.

"The stock is very large. The product is produced and put aside." Another cotton spinning enterprise is not only short of orders, "long term single, I do not want to pick up, now profits are very low, down 30%, and then will lose money." Mr. Zhao, director of the company said.

Facing the frenzied cotton market and the variable market situation, some cotton spinning enterprises are tired and hard to support. The sales manager of the company has admitted that the current market situation is almost the same as that of the financial crisis in 2008, almost to the bottom. "In the past, we can see the hope of a rebound in cotton prices, but as the price of cotton is likely to fall again, there is little hope of a rebound."

"At present, our dependence on cotton is getting smaller and smaller, which is compelling." Chun Chun Jiang light textile group is affected by many textile enterprises. General manager Sun Boyong said that because cotton prices are always ups and downs, the risk of making cotton products is extremely high. In the first half of last year, Sun Boyong began to consider adjusting the product mix. That is the adjustment, which saved him from the influence of "crazy cotton" in the past year.

"As far as possible the production of chemical fiber and blended products, reduce the dependence on raw materials of cotton, at present, cotton accounts for only 20% of the raw materials of all products." Sun Boyong said that the blended products are made of more than three kinds of materials, which also prevents the product from being tied down by a certain raw material and reduces the risk.

If cotton prices have been falling down, how should people engaged in related industries be prepared instead of being passive?

"There is no way to deal with it, only to observe the market changes." Mr. Wu said that the future market is too difficult to predict, only waiting for the market to improve. Recently, he has stopped putting in a lot of raw materials and stockpiling goods carefully.

Reducing raw material inventory is a way for most enterprises to avoid risks. "Cotton inventory is controlled from the original three months to a month, which is the limit of production." Sun Boyong said that the current situation is probably that the more we go in, the more we lose, and the reduction of inventory is conditioned. {page_break}

"I think the current situation, cotton business enterprises must be low inventory. The processing period should be shortened, strict contracts should be strengthened, and funds safety should be strengthened. Hold on to your money, and sell it again. A senior buyer of cotton textile industry told reporters.

Regarding this, the Huatai Futures Research Institute commented that "orders for foreign enterprises are more cautious this year. In the face of a sharp decline in cotton prices, the survival of large enterprises is acceptable, and many small businesses are facing closure. High inventory leads to the shortage of disposable capital, and the purchasing of cotton in major textile enterprises is good and bad, and is in the process of industrial transfer.