Flax Industry: Two Heads Hanging Up Are Bad For Long-Term Development.

China is a large country of flax production and export. It is also a large importer of flax raw materials. Over 85% of the world's flax raw materials are consumed by Chinese enterprises, and about 90% of Flax Yarns and fabrics are exported.

Although China's Hemp textile industry is only a small industry relative to the cotton spinning and chemical fiber industry, it is a typical "two ends outside" (raw materials outside and outside the market).

Although China's flax industry is developing rapidly, it is subject to fluctuations in foreign raw material prices and foreign countries which are difficult to control.

China's Linen industry is mostly small and medium sized flax enterprises, because they generally do not have the qualification to import flax raw materials from abroad. Most of them are mainly foreign direct linens and foreign flax raw materials, which are basically the same as foreign armeny, which are simply unable to fight the United European flax and hemp Association.

As early as 2008, the Chinese Flax Company had discussed with the European flax and hemp association the price of flax raw materials.

At that time, domestic linen enterprises sent senior executives to participate in the rally. However, the Europeans, who were prepared to come up with a series of data, had asked for higher prices of flax raw materials due to natural disasters affecting flax production, rising domestic prices, and other European plants that could be replanted to Europe.

The representatives of Chinese flax enterprises also put forward many reasons for not raising prices of flax raw materials, but they were not enough to refute the European's tough attitude. The two magic reasons were: first, flax planting in Belarus, Egypt and other countries slowly developed after the excessive price of flax raw materials in Europe, and linen planting in Europe will face greater challenges.

Second, China is currently the largest flax textile country, and the development of China's flax textile has saved Europe's agriculture, and their planting area has expanded year by year.

Even near the end of the meeting, there was a rush from the head of the flax company.

It is clear that the Chinese flax enterprises, whose purpose is not clear, did not form a united front, which was not an opponent of the European flax and cannabis Federation, which was not prepared and twisted. Then, in October 2008, even though the import price of linen raw materials increased to about 3 kg, the Chinese flax enterprises had to pay high price to import flax raw materials from foreign countries in the face of the shortage of raw materials.

In addition, the financing difficulties of small and medium-sized flax enterprises in China have also led to the fact that they can not cope with rising prices of foreign flax raw materials through hoarding. In recent years, the intervention of financial resources on the linen raw materials market is exacerbated.

A domestic linen SME chief told reporters that "financing difficulties have always been the weakness of SMEs, and the root cause of many peer failures is capital turnover."

From the perspective of linen industry chain, printing and dyeing enterprises, linen production enterprises, and flax yarn production enterprises, the slowest capital turnover is linen yarn factory.

Because small and medium-sized enterprises do not have the qualification to import flax raw materials from abroad, they often use the cash to buy flax raw materials directly from abroad, but the other side linen cloth factory does not necessarily pay immediately after receiving the product.

Because there are many yarn producing enterprises, this one will not do it, another will do it. There is always a yarn factory willing to take this list.

When the capital flow fails, we usually resort to underground banks. There are many such banks in the Zhejiang area. They are not standardized. The risk of loans is very large, not just money.

But we have no choice! "

In the first half of 2010, the Chinese flax trading market was set up by the China Linen Textile Association, China Chemical Fiber Corporation, Zhejiang JINDA Holdings Limited and several key enterprises of linen textile industry.

"Boycott capital" is also the purpose of establishing China's Flax trading market.

Yao Jianchun pointed out that the agreement between the Chinese flax trading market and the French Flax Textile Association agreed that the annual price increase of flax raw materials would be between 10% and 20% based on the reasons of order persistence and inflation.

"In fact, any sharp rise and fall will be disadvantageous to the sustainable development of the whole flax industry. In order to maintain the healthy development of the market, we must resolutely resist the malicious speculation of flax raw materials."

However, after less than two months after the opening of the business, the Chinese flax trading market has been keeping a low profile after the online bidding paction exceeded 100 million yuan. Although the price of raw materials has been curbed by the way agreed with the French Flax Textile Association, there has not been a strong domestic linen Alliance to cope with the rising of foreign raw materials, nor has it launched any measures such as physical mortgage for the financing difficulties of small and medium-sized flax enterprises.

Domestic flax production has been shrinking again and again.

In recent years, the production of Flax in China has been shrinking, which is not enough to cope with the rapid development of China's flax industry.

The main reason is that the technology of flax is low, the technology of retting is far behind that of foreign countries, the foreign trade enterprises of flax need to name foreign linen raw materials, and the risk of agriculture is much higher than that of planting traditional crops.

In Normandy, France, the largest flax producing area in the world, many flax planting farms are "ancestral" handicrafts. They have hundreds of years of flax planting experience and "no external" retting technology. Mr. Lin, who is a merchandiser in linen mill, has the honor to visit a flax farm in Europe. He said, "from the area of planting alone, compared with the output of only 300 kg of flax planted by domestic hemp farmers, the output of one mu of land in France can reach about 1000 kg.

Not to mention the technology of high technology such as retting, this technical difference is a hard nut to crack in China.

In a county in Heilongjiang, which was once popular, "Zhang Ma is rich", a farmer who has been planting linen for many years, told reporters, "planting flax more than 20 years ago made his family the first million yuan in the village. At that time, people in the whole village thought that planting linen was more profitable than planting crops such as wheat and corn.

Moreover, flax planting has high yield and low cost, and stems, stems and seeds are all treasures.

For a long time, many people in the village did make money because of their seeds.

But in recent years, the flax purchasing factory often defaulted on our money, and even later many of the purchasing factories did not buy flax in time according to the contract, some of them went bankrupt directly, so the family could not sell the hemp and lost a lot of money.

We planted flax according to the market situation last year to decide the planting area, catch up with bad year, some people Bai Manghuo.

We farmers are looking for a safe and stable place. In 2000, at least 80% of the people who planted flax in the whole village were basically not planted, and we can not afford this risk.

However, there is no way out for linen cultivation in China. For example, Jinying shares vigorously develop the "Yu Lu Ma" varieties close to the international level in Xinjiang, and has explored a set of basic and feasible operation modes, training the scientific and technological planting of linen and agriculture, increasing the maturity of the rain and dew retting technology, and making the hemp quality relatively high.

The raw material control strategy makes Jinying stock form a complete industrial chain from linen planting base to linen finished product, and forms its own unique industry profit pattern.

The strategy of jointly promoting the development of flax industry from the top to the downstream is very clear. The expansion of the planting base has greatly increased the output of linen. Therefore, the output of flax yarn has been greatly increased and the development prospect is wide.

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It is difficult to raise the price of export linen products, and the flax enterprises are unintentional to exploit the domestic market

Liu, who is engaged in the foreign trade of domestic linen enterprises, said, "the price of domestic flax products is basically impossible.

Because foreign businessmen are looking at the cheap labor force in China, when many domestic counterparts negotiate with foreign businessmen, they always talk about the impact of raw materials on enterprises, but foreign businessmen say that this has nothing to do with them. The price they can accept can only be this.

Moreover, some foreign businessmen are very mistrust of domestic retting technology. They will specify the requirement to use French flax raw materials when placing orders, which will increase the production cost of enterprises.

Even if the enterprises know that the two foreign business models are not conducive to long-term development, enterprises need immediate foreign orders to recover funds as soon as possible.

It is impossible to invest human and financial resources in developing domestic markets that do not know much about returns. "

Taobao, a seller of linen products, said, "consumers know little about flax materials. Many people stay in the initial stage of linen = sack bags, so we employ professional copywriters to carry out product packaging, which is packaged from the special properties of flax itself and extended reading of environmental protection and green, and sales are good.

For example, a 300 yuan flax car supplies are better sold than cotton products of the same price.

From customer purchase evaluation, we can see that consumers value green and environmental protection very much.

The price of imported flax raw materials has been rising, the financing of flax medium and small enterprises is difficult, domestic linen planting is less and less, and the price of flax products is not expected to rise.

As the largest flax production base in the world, the rapid development of China's Linen industry has been caught in an awkward situation.

It can be seen that instead of maintaining the status quo, we should take another shortcut to stimulate the domestic demand market.

Although the prospect of domestic flax market is unknown, it is not without possibility of development. After all, environmental protection and green are the popular ideas of Chinese people.

And raw material cultivation will always follow the market. If the domestic demand market is stable, it will be the most effective "strong heart" for the domestic flax farmers who are afraid of shrinking.

The long-term development of China's flax industry must grasp the "initiative" so that we can say "NO" to the international market of rising imported linen raw materials and refusing to raise prices.