Cotton Prices Plummeted And Sichuan Textile Enterprises Understarted

September is the acquisition season for new cotton, but the head of cotton and hemp company in Xinjiang went to the market in June 10th.

The behavior of cotton and linen company is not difficult to understand. Since last August, cotton has gone all over the country. Rise Price channel, to February this year, boarded the peak price of 35000 yuan / ton. But after March, cotton prices fell to a downward path. By April, they fell by an average of 500 yuan / ton per 3 days, and now they have dropped to 24 thousand yuan / ton, or nearly 30%. Cotton prices are rising and falling. Textile and garment production and export enterprises can not afford such a toss. At present, many cotton spinning enterprises in the province have cut down production or stop production.

　 Injured in capital games Sichuan clothing Exit Sharp reduction of 60%

In a short span of a year, why are cotton prices fluctuating like roller coaster?

In the second half of last year, the international market revival, but domestic cotton was reduced by 9% due to drought output. Then, hot money enters, big businesses hoard goods, and cotton prices are pushed up. Speculators didn't arrive at the new cotton shopping season in Xinjiang to control the market price and quantity of cotton. On the other hand, under the pressure of the world trade organization, the United States will cancel the cotton planting subsidy in 2012. In order not to let the cotton farmers suffer losses, the Americans have become the traders of the global cotton price rise. With the control of cotton exports from India and Pakistan, the main cotton importers of China, it is difficult to stabilize the market price through imported cotton.

In March this year, the state issued the minimum reserve price of cotton for 19 thousand and 800 yuan / ton. This is undoubtedly a major negative for speculators, and the futures market is changing rapidly. The "high price" of the spot market was passed to the consumer terminal in February this year. "European merchants can accept the price fluctuation range of 2%-5%," Zhou Yali, vice president of the Sichuan Textile Science Research Institute, analyzed the situation of Canton Fair, and the order of textile and clothing in Hong Kong dropped sharply. Most of the enterprises were at a loss. The domestic demand for clothing decreased due to inflation, which ultimately contributed to the decline in cotton prices.

In this capital game, the cost of hoarding cotton enterprises is estimated at billion yuan. Sichuan textile production enterprises are small in scale and have no capital strength to hoard goods, but they can not escape passive "beaten" doom. Chengdu customs data show that in this round of cotton prices fluctuate sharply, Sichuan clothing exports in 1-4 sharp decline of 60%.

　　 Cotton spinning enterprises do not see clearly when the market starts to work.

Many cotton spinning enterprises in the province have cut down production or stop production. Jiang Deping, executive director of Sichuan Tianjiao cotton mill, said that the factory produced 6 million tons per month, compared with 100% last year and 90% in the first few months of this year.

Buy or sell. If cotton prices drop by 10% from cotton to cotton yarn, the drop is still expected - the factory's cotton yarn should at least fall by 20%.

Most enterprises in the province receive small bills and urgent orders this year. Foreign orders have been transferred to countries and regions with lower cost in the first quarter. Tianjiao has a client who is in the South African market. His former headquarters in Shanghai has moved to Hanoi, Vietnam.

The reporter made a market survey, and the domestic retail price of clothing has not been cut down because of the cotton price. Liu Li, a clothing store owner of Yuefu street in Chengdu, said that the price of Guangdong garments was 10%-20% higher than that of a year ago. The industry believes that clothing prices are mainly in the digestion of last year's cost increase. Many garment trade enterprises worry that the cotton price will go down, and the finished products will be "depreciated".

Feng Jinhua, director of the textile and light textile department of the provincial Commission for economic and Trade Commission, said that the current cotton mills were generally under construction. Because the market situation is not very clear, the wait-and-see sentiment is strong.

　　 Improve product value-added and actively adapt to market

Cotton prices fluctuate greatly. How should enterprises respond?

Zhou Yali, vice president of the Provincial Academy of textile science and technology, suggested that enterprises should strengthen their technological innovation ability, speed up the added value of products, seek a way out through developing new markets, strengthen their adaptation to various production materials, avoid the risk of exclusive dependence on cotton and their products, and strengthen the market anticipation, so as not to blindly carry out vicious low price competition.

Tianjiao is going to invest 100 million yuan this year to buy advanced equipment such as spinning long cars and automatic winding machines with collective doffing. Jiang Deping said that in November, the company will upgrade its technology. At that time, the advanced equipment will account for 70% of the total capacity of the company; the production capacity will increase to 170 thousand spindles, which is 40% higher than the current growth rate; at the same time, the "two liters" and "two down" will be realized: the added value of products will be greatly increased, the production efficiency will be increased by 30%-50%, the unit energy consumption and the comprehensive cost will be reduced by 5% and 10% respectively.

The cotton yarn manufacturer, which used to rely on foreign trade companies to export, is actively building its export team to export products to emerging markets such as South America and Southeast Asia. These market textile industries are accelerating, but most of them rely on China's industrial chain.

"Changing the way of development is not a slogan, but a guide to corporate action." Jiang Deping said that the new products have been gradually released. Due to the increase in the added value, the new product is 5% more expensive than before the technical transformation, but the order has been saturated. Now the production order for July has been started, and it is preparing for the autumn product.