Vice President Of China Cotton Association: August 30% Cotton Enterprises Capital Chain Or Fracture

Last year to this year,

Cotton prices dropped nearly ten thousand yuan in two months

Sun Weiting has 30 years experience in cotton spinning industry.

He led Hua Fu color spinning, one of the largest colored spinning enterprises in the world, and has more than 40% share in the world's top color spinning market, with an annual cotton consumption of 200 thousand tons.

Huafu color spinning has 80 thousand acres of quality long staple cotton field in Xinjiang.

Even Sun Weiting, who was able to hold information from the head of the field to the head of the shop, could predict the market in the early season. "It never occurred to me that cotton prices would go up that high and fall so fast."

The price of cotton rose from 21 thousand yuan per ton last year to three hundred thirty four at the beginning of the year. "We thought it would be down, and the result was about a month to cut the steep slope down to two thousand four five."

"This situation did not happen in 30 years", let a person "panic".

Cotton was injured in the control of cotton spinning industry

Sun Weiting analysis said that the cotton market was completely manipulated by capital and had three characteristics that had never been seen before.

First, domestic cotton prices are upside down with foreign cotton prices, while foreign cotton is 4000 to 5000 yuan higher than domestic cotton per ton, while living abroad is 3000 to 5000 yuan per ton.

Second, cotton yarn prices rose more than cotton, indicating that the whole industry chain panic; third, not futures affect spot instead of spot futures futures.

These characteristics show that the interpretation of cotton market has completely exceeded the basic demand and supply of the industry, and cotton, like many agricultural products, has been regarded as a tool for speculation.

It is precisely because the market has exceeded the past experience that many people have made the opposite decision, and the losers have greatly exceeded the winners, causing a fatal blow to the whole cotton spinning industry.

According to media reports, half of the Shandong spinning enterprises as cotton prices down, stockpile losses.

In Xinjiang 20 thousand Wenzhou cotton merchants, and a considerable part of cotton is still hoarding on hand, the capital chain has been very tight.

Sun Weiting said that because cotton prices fell too fast and cotton yarn prices remained unchanged, the order rate of cotton yarn downstream enterprises was only 60%, making many cotton yarn enterprises suddenly faced "shock".

For these enterprises, the last fatal blow is the withdrawal of loans from banks or private lending.

He estimated that by August, when the Agricultural Development Bank cleared cotton loans, there would be 20% to 30% of the cotton strand enterprises' capital chain collapsed.

"The sharp rise and fall of cotton prices this time hurt the industry far more than the sharp pullback of the financial crisis."

Cotton spinning is hard to make a tough year

Lin Guofang, chairman of fuanna, told reporters yesterday that cotton prices had gone up and cotton yarn had not been produced since last year's cotton boom.

Cotton yarn enterprises all the way to produce at full capacity, all the way hoarding cotton.

Last year cotton yarn business caught up with the bumper harvest of ten years.

This year is the most difficult one.

Sun Weiting said that cotton prices skyrocketed, cotton yarn business has never made a good profit, the original normal 3% industry average net profit, rose to 7% to 8%.

Last year, 10 million spindles were added nationwide.

"Everyone has gone to fight for resources rather than practicing internal skills and technological innovation."

China is a big textile country but not a strong textile country. This is a setback.

The original cotton yarn production capacity of extensive operation should be eliminated, but some enterprises have made a big profit through speculative resources.

Sun Weiting said that this market is favorable to the market in the long run. It is the strategic direction of the industry and then "to make up", that is, to rely on extension and profit by speculation, and to make brand technology and painstakingly return.

"Despite the tragic situation, the social resources are too wasteful."

Sun Weiting said that this year there will be a good opportunity to M & A, before the acquisition of an enterprise to spend 100 million, and now can be taken at 30 million, industry concentration will further improve.

There is a specialized futures department in Huafu color spinning. Sun Weiting himself sees the cotton futures market inside and outside the company every day. "After this test, we all understand that in today's global integration, we must pay more attention to futures and more futures in the cotton spinning industry, and the way of hedging will be more radical in the future," Sun Weiting said.

Even in the context of sharp fluctuations in the raw material market, enterprises that have strong pricing power and strong financial strength can grow faster because of the successful completion of the price increase.

Huafu color spinning profit increased 154%, net profit growth in the first quarter of this year is still 33%.

Last year, fuanna increased its net profit by 48.37%, and its net profit grew by 63.25% in the first quarter of this year.

Fried cotton and war

Recently, domestic and foreign drought weather, let cotton all the way down market uncertainty.

Zheng cotton contract 1109 rebounded to 26230 yuan per ton on Tuesday.

The uncertainty of cotton's later period makes the cotton frying capital a bit eager.

The head of a textile enterprise told reporters yesterday that we are still observing the market of cotton. If cotton is further lowered to the right price, we will buy it and sell it when serving high.

An insider told reporters that the recent changes in weather have made cotton producers rekindle confidence in cotton.

As far as it is concerned, some of the cotton hoarding buyers in Xinjiang who are buying at 24 or 5 are now in no hurry to launch. They are still waiting for a turn in the market.

Sun Weiting said that no matter how the cotton market has changed, the purchase price of 1980 yuan per ton this year will play a decisive role in the stability of the cotton spinning industry, even though this policy is only one year.

For the home textile and garment industry, the sharp rise and fall of cotton is generally beneficial to them, because the price of the terminal products going up is hard to come down again.