Why Cotton Prices Fall Fast?

Just after the beginning of autumn, the autumn dress was quietly placed in front of the season. Many brands have posted new logo on the autumn market at the most striking location of the counters. Most of the summer wear has been transferred to the discount area, while the domestic cotton price has been on the decline since June 15th of this year, but the price of the autumn clothes just listed on the market has not kept up with the cotton price, but it has not gone up and down.

The industrial chain of clothing and textile industry is made up of cotton farmers and cotton textile enterprises. printing and dyeing Enterprises constitute four main links of clothing manufacturers. Cotton prices and clothing prices are exactly two ports, and the prices of raw materials are falling. Why does the price of finished garments increase? Zhu Qinghua, a researcher at CIC light industry, pointed out that the demand for cotton yarn is generally in the 3-4 months after the spring Festival and the 9-11 month in the new flower market, while the off-season is 7-8 months. In February this year, the domestic 328 grade cotton price reached the highest price of 29 thousand yuan per ton.

When cotton prices are high, it is the peak season for cotton yarn demand. cotton spinning Weaving enterprises have to buy raw materials at high prices to maintain production, while the prices of raw materials purchased by garment manufacturers at this time are also at a high level. However, the cotton price rise has not lasted for a long time. Cotton market has been adjusted downward to a minimum of around 19 thousand yuan in the early August after months of adjustment. Cotton textile enterprises are facing a problem of high inventory. Generally speaking, cotton textile enterprises will keep their inventory for 1-2 months, while downstream garment manufacturers require low price purchases of raw materials. Contradictions between high priced stocks and low-priced products make cotton textile enterprises reluctant to sell, resulting in reduced supply and higher prices.

It is worth noting that clothing Manufacturer Generally speaking, the design and production of clothing products are carried out ahead of schedule in the next season. Therefore, the raw materials purchased are mainly used for the next quarter of the production. The raw materials used in spring and summer clothing are mostly raw materials purchased last year, while the raw materials for purchasing cotton at the highest price are used for the production of autumn clothing, coupled with the increase of human capital and logistics cost, and the tension of seasonal electricity consumption. Multiple factors have pushed up the current autumn clothing prices. Zhang Yanlin, research director of CIC, stressed that in addition, the added value of clothing contained in clothing also kept the price of terminal garments high.

The 2011-2015 year China textile industry investment analysis and prospect forecast report released by CIC pointed out that the industrial chain of clothing and textile industry has time lag in the process of price transmission, and that the effect of raw material price rising to terminal garment needs a certain time. This requires companies with strong market insight and forecasting ability to grasp the raw material purchase quantity.