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Cotton Price "Diving" Hurt Textile Enterprises

2011/9/17 13:36:00 20

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For 5 consecutive working days, 19800 yuan / ton was broken down.

September is the first month of the 2011 cotton year.

As of September 7th, domestic cotton prices continued for 5 working days, lower than the fixed price of cotton temporary purchase and storage announced by the state, 19800 yuan / ton.

To this end, the national development and Reform Commission decided to start from 8, the first time the cotton temporary storage.

Cotton price "diving", originally

Textile enterprises

It is good, but some textile enterprises in Dongguan are worried about it.

According to our reporter's interview yesterday, some of the enterprises were buying a lot of cotton before high prices. At present, they are in the inventory stage. Because of the sharp fluctuations in cotton prices, they have a huge impact on the operation of enterprises, and even some enterprises are losing money.

One

Pain "digesting" high priced cotton purchased

Data show that in September 7th, China's cotton price index from this round.

Cotton price

The peak of 31000 yuan / ton fell to 19502 yuan / ton, or nearly 40%, which made Dongguan Weibo textile and garment factory (hereinafter referred to as Weibo) general manager Zhang Jinxian relieved.

Since the second half of last year, the cost of raw materials has increased all along since cotton prices continue to rise.

Zhang Jinxian said frankly that cotton prices rose rapidly, which once allowed enterprises to face enormous operating pressure.

Since February this year, because of the introduction of a series of regulatory policies, the price of cotton has been sliding all the way. As of 7 days, the price of cotton has fallen below the national temporary reserve price of 19800 yuan / ton for the 5 consecutive working day.

The drop in cotton prices is good news for downstream textile companies, but some enterprises in Dongguan are still in a predicament.

It is understood that a year ago, the peak of the cotton price has caused some small textile enterprises to be eliminated.

In order to deal with the rise in cotton prices, some enterprises have to buy a large quantity of cotton ahead of schedule, and many enterprises are still in the period of stock going.

Chen Yaohua, Secretary General of the city garment industry association, told reporters that some enterprises had bought a lot of cotton before high prices. Now that cotton prices continue to fall, some enterprises have already had an impact, and the cotton yarn produced can not even reach the price of cotton.

"I understand the situation is that some textile enterprises are losing money in order, and capital turnover is also a problem."

Chen Yaohua said.

In addition, according to Sheng Tai

knitting

Ye Zhaoliang, director of the clothing company, said that he had several friends in the textile and clothing business, and in the stage of cotton prices advancing all the way, a large quantity of cotton was hoarded, a part of which was used for the production of enterprises, and most of them were used for speculation.

"Some companies buy Cotton with a lot of money, and then wait for the opportunity to make profits."

Ye Zhaoliang said.

With the sudden drop in cotton prices, these enterprises have also paid a heavy price for this.

Since the early hoarding of cotton takes up a lot of capital and cotton prices fall, cotton in the hands of the enterprises has been greatly depreciated and the money has been withdrawn for a long time, so the capital chain is likely to collapse at any time.

Two

Improving bargaining power to deal with cotton price fluctuation

September is the first month of the 2011 cotton year, and the next October will be the new cotton market.

According to Chen Yaohua analysis, there will be a substantial increase in cotton supply in October.

At the same time, because of the downturn in European and American economies, the export volume of textile enterprises in Dongguan has slowed down, and the demand for cotton will decline. The relationship between supply and demand determines that cotton prices will not change much in the future.

This gave Dongguan textile and garment enterprises a reassurance.

The sharp fluctuation of cotton prices has made enterprises miserable. Chen Yaohua pointed out that compared to high cotton prices, textile enterprises are more worried about the huge fluctuations in cotton prices.

As for how to avoid the risk of fluctuations in cotton prices, Chen Yaohua's proposal is that the government should regulate the entire bulk commodity market, rationalize the design and operation from the system level, and stabilize the market price so as to safeguard the interests of enterprises.

For enterprises, industry experts suggest that they should abandon dependence on single raw material production, try other raw materials that are recognized by the market, and promote diversification so as to increase the added value of products and enhance their ability to resist risks.

Zhang Jinxian said that Weibo's approach to cotton price fluctuation is to insist on zero inventory.

"When negotiating with a customer, only when the price is reasonable will the order be received, and then the purchase of cotton according to the order quantity requires a certain bargaining power."

Zhang Jinxian explained.

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Corporate viewpoint

Cotton temporary purchase and storage is unfair.

As of September 7th, due to domestic cotton prices for five consecutive working days lower than the cotton temporary storage and fixed price of 19800 yuan / ton, the national development and Reform Commission issued a notice, decided to start from September 8th, the first time the cotton temporary storage.

As soon as the news came out, it immediately aroused heated debate in the industry and quickly split into two camps.

Some textile enterprises believe that the initiative did not take into account the interests of downstream enterprises, so textile enterprises first rebounded.

Zhang Jinxian said that in the era of high cotton prices, textile enterprises are under tremendous pressure of operation. When cotton prices fall, they must intervene through administrative means, which is obviously unfair to textile enterprises.

Chen Yaohua is in favour of this move.

He believes that the government's start up of temporary cotton storage and storage system will be unfair to the downstream textile enterprises in the short term, but this is to protect the interests of cotton farmers, so as to protect the upstream supply. Only sufficient supply can stabilize cotton prices, so in the long run, it will be beneficial to enterprises.

He suggested that how to balance the interests of various stakeholders should be well handled by relevant departments.