After A Sharp Rise, It Plunged &Nbsp; Cotton Prices Fell Down Downstream Businesses.

After the crazy rise, cotton Prices turn down. Since April, domestic cotton prices have fallen rapidly on average on average of 500 yuan / ton per 3 days. In less than two months, cotton prices fell back to 24 thousand yuan / ton, or nearly 3.

The rapid decline in cotton prices comes from the lower reaches. industry The recession. In April, China's cotton industry inventory survey showed that the yarn sales rate of textile enterprises decreased by 8.8 percentage points, the lowest level since September 2008, and the sales rate of cloth decreased by 1.4 percentage points.

"Domestic cotton textile enterprises are affected by factors such as slow recovery in European and American markets, reduced procurement, coupled with appreciation of the renminbi, rapid increase in raw material and labor costs, and so on. Spin The order quantity of the enterprise is reduced, and the raw material purchase quotation of the enterprise has been greatly reduced. Liu Cheng, a researcher at the China commercial circulation Productivity Promotion Center, said in an interview with the China national economic news reporter.

Although there is a large number of Zhejiang funds coming and going in and out of the futures market, the market will maintain a pattern of sustained volume in the near future. However, with the support of the fundamentals, they will still be unable to recover the downward trend of the market.

Dong Shuangwei, a leading futures analyst, said in an interview with reporters that from the recent capital side, large quantities of large quantities of money in and out also did not get much benefit. Instead, the positions were frequently converted frequently, and the 3 trading days outside the bank rose. In the absence of basic coordination, the main funds will not go too far. With the announcement of the US economic indicators, the outbreak of the Greek debt problem in the euro area and the tightening of China's market regulation policies, it is difficult for speculative capital to create a collective atmosphere of commodity market collectivity.

The "diving" of cotton prices did not let the downstream businesses that died from high cost pressures rejoice but let them get entangled. "Cotton as raw material, its price rise will occupy the amount of funds of enterprises, while the decline will have a greater impact on enterprises, which means a direct reduction in profits." Liu Cheng said.

The high inventory of enterprises has become a curse that they can hardly get rid of. China's cotton industry inventory survey shows that yarn inventory increased by 13.1 days in April, the highest level since March 2009, and the inventory of inventory increased by 8.8 days, becoming the highest level since March 2010.

The drop in cotton prices also means that the price of cotton yarn will also fall. Cotton prices are falling all the time, and these inventories of enterprises seem destined to be sold at a loss. Of course, the premise is that they can really sell.

In addition, enterprises are also faced with "electricity shortage", soaring labor costs, difficulties in credit funds and other unfavorable situations. Today, cotton textile enterprises really need to make a reasonable plan to get out of the predicament.

Liu Cheng suggested that in the short term, reducing inventory is a way for most enterprises to avoid risks. In the long run, under the premise of ensuring the continuous improvement of product quality and the continuous development of new varieties, enterprises should realize the reduction of cotton consumption, cotton grade and million spindles employment, and increase the profit margin of unit products. We should strengthen the research and development of new technologies and products, speed up the renovation and upgrading of equipment, and improve product grades and added value.

At the same time, enterprises should also strengthen the research and development of new raw materials. All kinds of natural fibers, super Imitation cotton fibers, differential fibers, new functional fibers and high performance fibers, including silk and all kinds of chemical filament, will enter the cotton textile system in the future. Cotton textile enterprises should change their thinking mode and get rid of the traditional concept of "pure spinning" superiority. Increase the use of new materials and reduce the dependence on cotton.

"Enterprises should establish a complete industrial chain as soon as possible. Cotton textile enterprises should take the initiative to go to the cotton producing area and establish a cotton acquisition base, which can not only protect the income of cotton farmers, but also protect their own production needs, and form a complete industrial chain of cotton planting cotton processing cotton spinning weaving dyeing and clothing. Liu Cheng said.