Cotton Harvest Difficult To Break The Industrial Chain Wait And See Stalemate

"This is the fifth consecutive year that I have been picking cotton in Xinjiang."

Learned from China Cotton Association, this year

According to common sense, the cotton harvest is good news for cotton growers, cotton enterprises and textile enterprises. However, in the process of investigating cotton industry chain, journalists found that various strong wait-and-see sentiments permeated.

"Wait-and-see" has become the key word for upstream cotton growers, middle reaches cotton enterprises and downstream textile enterprises.

"Wait-and-see" is behind the fact that on the one hand, on the one hand, as cotton growing costs rise, cotton growers have a higher expectation of cotton prices, plus a state temporary purchasing and storage policy underpinning and serious selling mentality; and cotton enterprises are less cautious because of downstream demand, plus cotton price "roller coaster" in the first half of the year, and cautiously purchased. Meanwhile, domestic market is sluggish, peripheral economies are depressed, and foreign trade orders of textile enterprises are reduced.

Harvest cotton

Attracted by high cotton prices and high yield in 2010, 2011

Zhang Hua, a flower picking worker from Shangqiu, Henan, told reporters that he came to Xinjiang from his hometown in mid September. "The reward is pretty good, 1.7 yuan per kilogram, the bag is wrapped and the fare is reimbursed back and forth."

Lao Zhang is just an ordinary member of the hundreds of thousands of flowers in the Xinjiang flower picking army.

It is understood that every September cotton mature, there are 6. 7 million flower picking troops from all over the country came to Xinjiang cotton picking.

In the busiest days, there are several special trains arriving in Xinjiang every day.

These are mainly from Henan, Qinghai, Sichuan, Shaanxi and other places, the vast army of picking flowers, until the middle and late 11 cotton picking will be completed on the road back home.

Lao Zhang's "family" is also from Shangqiu, Henan, Li Qiang.

5 years ago, the Li Qiang family arrived at the 111 farm of Hutubi six agricultural division in Hutubi, Changji, and contracted for more than 300 mu of cotton land.

Li Qiang told reporters that the growth of cotton is very good this year, but it is very difficult to recruit flower workers.

No way, he had to take relatives from his hometown to bring more than a dozen people to help helpers.

"The cotton planted in my home this year, thanks to the efforts made in scientific farming, plus the good weather and good weather, can yield more than 350 kilograms per mu, which is better than in the past years."

Li Qiang said, "the flower picking workers are very vigorous and can pick more than 100 kilograms a day."

The data show that China has a wide range of suitable cotton planting areas. The whole country is divided into three major cotton regions: the middle and lower reaches of the Yangtze River (including Hubei, Anhui and Hunan), the middle and lower reaches of the Yellow River (including Henan, Hebei, Shandong, etc.) and the northwest inland cotton area (including Xinjiang and Gansu).

In 2011, the sown area of cotton in China reached 81 million mu, an increase of 5.2% over the previous year.

Judging from the growth of cotton, this year is a good harvest year for cotton. If the latter weather is normal, it is estimated that the total output of cotton will reach 7 million 380 thousand tons this year, up 10.9% from the previous year.

According to Gao Fang, executive vice president and Secretary General of China Cotton Association, attracted by the high cotton price and high yield in 2010, the enthusiasm of cotton growers in 2011 has been greatly improved, so the area of cotton planting in the whole country has increased.

According to the monitoring information of the China Cotton Association, since 2011, the national climate has been relatively suitable since the national cotton sowing.

Among them, the cotton growing in the Yellow River River Basin and Xinjiang cotton area is good. The climate condition in the Yangtze River Valley is slightly worse, and the yield per unit area in some cotton areas has declined.

In China's main cotton producing areas, Xinjiang accounts for almost half of China's total cotton output.

China Cotton Association predicts that in 2011, Xinjiang's cotton planting area increased by 23 million 840 thousand mu, an increase of 12.5% over the same period, and the total output of cotton will reach 3 million 425 thousand tons, an increase of 17.4% over the previous year.

Shandong, located in the middle and lower reaches of the Yellow River's cotton growing area, has an area of about 11 million 650 thousand mu, an increase of 4% over last year. It is estimated that the output of cotton will reach more than 860 thousand tons this year, an increase of 22% over last year.

And in the middle and lower reaches of the Yangtze River cotton production area in Hubei, in 2011 the province's planting area increased by 14.2% over the previous year, to 8 million 210 thousand acres.

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Domestic cotton prices have plummeted and plummeted, bringing the pains of the whole cotton industry chain, causing the industry chain to watch carefully this year.

In late 9 months of last year, a small cotton enterprise in Dongying, Shandong could at least pick up more than a dozen car wagons.

But entering the new cotton purchase year in 2011, it has been one month. The cotton business is not only unsuccessful, but also sporadic, and the sales are also very bad.

Manager Wang told reporters that what he feels most deeply is market sentiment.

Manager Wang further said that as cotton prices rose sharply last year, many cotton growers tasted the sweetness, so the cotton price expectations this year were generally high, plus labor prices and production materials rose, planting costs increased, cotton farmers were reluctant to sell seriously, and the purchasing market was deserted.

Speaking of the cotton market in the first half of this year, the head of the cotton business is still afraid.

Manager Wang said that due to the influence of cotton supply and demand, capital speculation and other factors, domestic cotton prices surged and plummeted in 2010 (September 2010 to August 2011), bringing the pains of the whole cotton industry chain, causing the industry chain to watch carefully this year.

Cotton prices rose all the way from last April. Cotton prices began to rise sharply after the Spring Festival this year. Cotton prices have reached the peak of 34 thousand and 870 yuan per ton in February this year, and back to 31228 yuan / ton in March, and cotton prices fell again.

The total decline in 5 months exceeded 12000 yuan per ton, or 39%.

At present, the price has fallen below 19800 yuan / ton in the new year. The current market price of the 3 grade lint market is about 19500 yuan, and the average turnover is about 18000 yuan. It is hard to sell below three grade, and seed cotton is basically around 3.7 yuan.

Cotton farmers have higher psychological expectations for cotton prices this year. Many cotton growers say they are not selling for less than 4.5 yuan / Jin, but they are reluctant to sell and are more serious.

In contrast to high cotton prices, textile enterprises are more worried about the sharp fluctuations in cotton prices, which will have a great impact on their demand behavior.

Last year, cotton farmers received substantial benefits, planting area increased significantly, planting intention was strong, but cotton harvest cotton farmers reluctant to sell psychological heavier, and cotton enterprises purchasing intention is not strong, lower prices, cotton trading market is mainly stable.

"This stalemate will last for one to two months. I believe that after the national day, cotton prices will rise as foreign orders for textile and apparel increase, and domestic demand will gradually strengthen, and the US economy will gradually recover."

In view of the current purchase price of cotton market, Xiong Guang thinks, "farmers' income can also be achieved, and the benefit of cotton enterprises should be between 3% and 4%."

Reporters on Shandong, Hebei, Anhui and other cotton enterprises survey found that "the market can not be judged, take a step by step" has become the majority of cotton business executives say the most.

Shandong Heze Juye Xie Ji industrial park Jinyuan cotton plant thirty-nine factory manager Xie told reporters that the current cotton prices have dropped drastically.

"This year Hebei cotton harvest, but the price is not very good, three, four grade seed cotton 4.1 yuan or 4.2 yuan / Jin."

Hebei Handan city Tengda Cotton Corp manager said.

Liu Jiangbo, a Cotton Corp manager in Dongying, Shandong, told reporters: seed cotton is 4.3 yuan / Jin, but last year it was 5 yuan / Jin.

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Lu Jian, a Cotton Corp manager at Wuwei cotton producing area in Anhui, told reporters that the price of four grade seed cotton was 4.2 yuan / Jin.

The reporter learned from the relevant officials of the China Cotton Association that cotton production increased in China this year, but demand did not increase at the same time. This is the biggest suppression of cotton prices.

Cotton demand in the new year is still at 10 million tons, unchanged from the previous year. Most of the main cotton producing countries in the world have had a bumper harvest of cotton in the past 2011 years, and supply is slightly larger than demand. There is a downward pressure on cotton prices.

Zhu Yun, chairman of Western Xinjiang silver force cotton limited company, said that from the current situation of cotton purchase and sale and the operation of textile enterprises, the probability that cotton climbed to 30 thousand yuan / ton in the previous year was less likely.

However, cotton prices are hard to come down again under the support of rising cotton planting costs and state purchasing and storage prices.

In the future, with the stability of all parties, cotton prices will remain at 22 thousand - 23 thousand yuan / ton.

Xiong Guang expressed the same view to reporters. "Since the state announced the reserve cotton system in August 16th, the price of 19800 yuan / ton will make cotton prices stable and the space for growth is limited.

A bumper harvest of cotton this year will not go up sharply like last year. "

But he believes that "the next 2 months up to 21000 yuan / ton."

However, some people hold reservations about the stabilization of cotton prices in the future.

A long-term concern about China's cotton prices experts believe that, from now on, the cotton price stable operation factor is dominant, if once the hype funds focus on the cotton market, plus upstream funding push, do not rule out the possibility of a substantial increase in cotton prices.

Helpless spinning enterprises

Cotton price "roller coaster" makes textile enterprises take more risks. Textile enterprises dare not rush to hoard cotton, nor dare to take large orders.

As the downstream products of cotton, the cotton prices in the first half of the year have gone up sharply, and a large number of small and medium-sized textile enterprises located in the low end of the industry have been greatly affected.

It is understood that about 1/3 small textile enterprises in Jiangsu and Zhejiang provinces are in a state of shutdown or semi shutdown due to their weak ability to resist risks.

Located in the the Yellow River coast of Shandong Binzhou is known as "China's Cotton Textile City".

At present, a number of small and medium-sized cotton spinning enterprises in Binzhou are having difficulty in operation, and many enterprises have stopped production, and even a few enterprises have gone bankrupt.

Small and medium-sized textile enterprises ceased production news constantly spread, large cotton textile enterprises are also facing inadequate work.

"The underemployment of enterprises is very common now. The situation of large scale cotton spinning enterprises is not so good. Many are barely supporting."

The head of a textile enterprise in Binzhou told reporters that "at present, the industry's largest bridge opening rate of Wei Qiao is about 8, and that of Phoenix Bamboo textile is nearly 7, and Huafang textile is about 5."

The person in charge also said that this year's textile enterprises are too strong to watch and have insufficient orders.

The peak season is not as good as the off-season, and the textile enterprises are also very helpless.

A textile industry source said, the current textile industry is more difficult than the 2008 financial crisis.

In the past cotton year, cotton prices surged to a record high of 31288 yuan / ton from the initial 18000 yuan per ton, and then dropped to below 25000 yuan / ton.

The sharp rise and fall of the textile industry has made it difficult for enterprises to run and commit suicide.

Gao Fang, executive vice president and Secretary General of the China Cotton Association, pointed out that the sharp fluctuations in cotton prices have made it difficult for textile enterprises to determine the cost, big single and long sharp reduction, low raw material inventory, limited cotton procurement, light turnover and slow turnover of commodity cotton.

In the first half of 2011, China's textile enterprises above Designated Size completed 13 million 413 thousand tons of yarn production, an increase of 11.14% over the same period last year. The weaving enterprises above Designated Size finished 28 billion 340 million tons of cloth production year-on-year, an increase of 15.36% compared with the same period last year. The profit margin of cotton textile industry from 5.26% to 1 was slightly lower than that in the first quarter, and the average monthly profit margin in the 452 months was 4.90%, and the average production and sales rate dropped to 97.90%, reaching the lowest level since the fourth quarter of 2009.

2011, the problems faced by the textile industry are very complex, and the international economic situation is generally in a doldrums. Domestic inflation, labor, raw materials and other cost prices have greatly squeezed the profit margins of enterprises.

According to the survey, the average cost of cotton planting is 1632.32 yuan / mu this year, an increase of 14.18%.

And cotton accounted for the largest cost of textile enterprises, accounting for 60% to 80%.

In addition, many factors such as the appreciation of the RMB exchange rate weaken the international competitiveness of textile enterprises.

As China's textile products 70% rely on the international market, and the more obvious advantages of Southeast Asian countries accelerate the development, more than 30% of the low value-added low order orders began to pfer to these countries, the export situation of textile enterprises is grim.

Gao Yong, vice president of China Textile Industry Association, believes that the turning point of textile industry in a short time is unrealistic. The key is that China's textile industry is closely related to the international market, and the developed countries have not yet come out of the economic downturn.

China is in the process of economic adjustment and monetary policy is still tightening.

Another industry insider said that if the cotton price stabilizes, it is expected that by the end of this year, under the environment of domestic demand pull and the gradual improvement of the international economic situation, as the demand for downstream garment market increases, the struggling textile enterprises will have a turning point.

Cotton price "roller coaster" has made textile enterprises take more risks. Textile enterprises dare not rush to hoard cotton, nor dare to take large orders. Most of them take a wait-and-see attitude, while textile enterprises do not have enough bargaining power for downstream garment manufacturers. Even if cotton prices fall at a low level, the downstream garment manufacturers will press down the price accordingly and squeeze the profit margins of textile enterprises.

Spinning enterprises should also bear the pressure of high cotton price inventory in the early stage of digestion. Therefore, the impact of cotton harvest on textile enterprises is not direct, and the key is the fluctuation of cotton prices.