Why Is The Textile And Garment Industry Unbearable Cotton Strike?

Over the past year, cotton prices have seen a rare "double first" and sharp cut.

The light cotton float up and down, the price fluctuate, not only let cotton.

"Practice has proved that nothing is worse than the sharp fluctuation of cotton prices."

Wang Tiankai, President of the China Textile Industry Federation, said in an interview with reporters that "cotton prices have been the most important problem facing the textile industry."

Skyrocketing and steep, cotton price is like roller coaster.

At the beginning of September 2010, when the new cotton in mainland China came into the market, the average price was only 18000 yuan per ton. After two months, the price rose to 32000 yuan, or nearly 80%. In 2010 December, it dropped to 26000 yuan per ton, and it rose to 34000 yuan in February this year. From March this year, cotton price has plummeted from the high price of 30000 yuan per ton, and has dropped to less than 19000 yuan per ton in November 24th.

The textile industry is a chain, and the downstream cotton mills are in poor condition, and the upstream cotton growers can not live well.

October and November should be the peak season for cotton farmers to buy cotton and cotton traders all over the world. However, this year's cotton area shows a huge contrast between "two fires".

Xiajin County, Dezhou City, Shandong province is a large cotton producing county where almost every family grows cotton.

Ma Junkai, President of Dezhou Cotton Industry Association, said that the purchase price of seed cotton is too low this year, which is now around 3.9 yuan per catty, compared with 7.1 yuan in the same period last year.

Now that the cotton farmers are sold, they may not even get their capital back, so they are slow to sell.

In sharp contrast to last year's rush, the deal between cotton growers and acquisition processing enterprises is deadlocked this year, and cotton processing is not making money. Many enterprises are still watching.

"This is the most difficult year for me to dry textile for more than 10 years."

A Shandong cotton yarn factory official told reporters, "the factory that has not stopped production during the international financial crisis has been shut down for over a month, and it can not start yet.

There are still 200 tons of inventory left unsold.

He counted out an account for reporters. When the price of cotton hoarding was 30000 yuan per ton, now it has dropped to 19000 yuan, plus water, electricity, rent, labor and so on, and I will lose nearly 10000 yuan for every ton of cotton yarn sold.

Tight funds, cotton prices to tie the textile industry

If labor costs rise and exports are sluggish, and other factors are unavoidable external hard pressures, then the sharp rise and fall of cotton prices has obviously become a "soft stumbling block" for the growth of textile enterprises. The increase in the cost of some production factors is less than 20% and multiple, doubling the number of enterprises, resulting in tight funds for enterprises.

When the cotton price rose in the early stage, the enterprises rushed to buy cotton for fear of shortage of raw materials.

The purchase cost at that time was generally three or four higher than the current cotton price.

Sun Huaibin, director of the China Textile Economic Research Center, told reporters that "now the high storage is hit by a sharp fall in prices and a sluggish demand, which has occupied a large amount of funds from the enterprises, causing some of the textile enterprises' capital turnover to be in trouble."

"In the recent research conducted by the Federation of textile industry," financing "has surpassed" order "as the first difficult problem commonly reflected by enterprises.

Wang Tiankai said.

According to the statistics of National Bureau of statistics, the financial cost of China's textile industry increased by 34.49% in the 1-8 months of this year, which is 4.48 percentage points higher than that of the same period.

In the past, it was generally believed that cotton was cheap to hurt farmers, cotton was expensive, and cotton prices were down, which was good for the textile industry.

"In fact, the risk of price cuts is even greater."

Wang Tiankai said that cotton prices have dropped greatly, but instead of buying them, they are watching. At the same time, some foreign businessmen instead use this as an excuse to lower the price of the end products. Many processing enterprises, especially small and medium-sized ones, are having a hard time.

Buying up or buying a down mentality lets foreign customers not dare to place orders, resulting in a reduction in demand.

Nanjing Hongqi Garments Co., Ltd. specializes in the production of women's clothing exported to the United States. The head of the company introduces that we quote customers two or three months in advance, such as the order of early Ming, now the price has been reported to the customer, and the customer will only pay the goods a month or so after taking the goods.

The price of cotton yarn has fluctuated greatly with cotton prices, which has raised difficulties for our quotation.

If the price of cotton yarn rises after a few months of ordering, the customer will ask for the execution of the original quotation. If the price falls, the customer will ask us to lower the price according to the actual price, otherwise it will not be.

Textile industry has no way to cope with cotton price fluctuation, and is largely constrained by cotton circulation.

In order to reduce the impact of imported cotton on the domestic market and protect the interests of cotton farmers, China has implemented a quota system for cotton imports, and there are 1.2 cotton textile enterprises above Designated Size in China, and only about 1000 enterprises eventually get the quota. Most enterprises, especially small and medium-sized enterprises, can not use the "low price" of international market prices to stabilize costs, which virtually reduces the ability of enterprises to allocate resources in the international market.

Ironing the amplitude, concentrating on adjusting the structure.

In order to solve the situation of cotton prices soaring and plummeting, this year, for the first time, the state purchases and stores the open storage price of 19800 yuan / ton. The aim is to stabilize cotton prices and to smooth the fluctuation of cotton prices.

The sharp fluctuation of cotton prices at home and abroad has seriously affected the pace of pformation and upgrading of domestic textile industry.

"Last year, because of the soaring cotton prices, many factory directors were concerned about cotton, because the profits brought by the operation of cotton far exceeded the profits brought about by technological pformation and management upgrading of enterprises."

Wang Tiankai said.