Cotton Prices Will Rise Next Year Or Hurt Chinese Textile Mills To Make Profits.

According to industry sources, cotton prices rise next year, which will hurt Chinese cotton mills because the government continues to buy cotton and crops. Seeded area Shrink.

Comprehensive media reported on December 19th, industry insiders said on Monday that the cotton price increase next year would hurt Chinese cotton mills because the government continued to buy cotton and the crop sown area was reduced.

They said that the adjustment of cotton import slip tax could also increase the cost of textile mills requiring high-quality crops.

The Ministry of Finance announced that from January 1, 2012, China will continue to implement a sliding tax on a certain quantity of cotton imported from the tariff quota. adjustment The formula of sliding tax.

Sliding duty is a method of importing tariff from low to high with the price of imported goods from high to low. commodity The higher the price, the lower the import tariff rate and the lower the import price, the higher the import tariff rate. Its main feature is to maintain the relative stability of the domestic market prices of sliding quasi tax commodities and minimize the impact of price fluctuations in the international market.

Vice chairman of China's major textile group said, "we have no choice but to accept the rise in cotton prices," he added, adding that his company is still consuming cotton purchased at a high price.

Cotton prices have collapsed since the beginning of this year, and the Zhengzhou Mercantile Exchange's cotton contract in March has fallen by more than 40% in mid February.

There is not much high-quality cotton available for domestic textile mills because the government is actively developing cotton acquisitions to support domestic prices.

As of Friday, the government bought 1 million 620 thousand tons of cotton to farmers. Analysts forecast that the total amount of storage and storage will reach 250-300 tons, accounting for 35-42% of the NDRC's total output forecast for 2011.

In 2011, the cotton temporary storage price was 19800 yuan per ton of standard grade lint to the warehouse. Some analysts speculated that the profit of the government would not be less than 2000-3000/ tons.

Futures prices also showed the trend of cotton prices in China this year. The main contract of Zheng Shang cotton futures reached a record high of 34870 yuan per tonne in mid February this year.

"If the government does not announce the import quota of sliding tax as soon as possible, the cotton price will go up, and the textile mills will compete for domestic crops early next year," said an analyst from China cotton textile information network.

China's 2012 cotton quota is 894 thousand tons, with a tax rate of 1%. This import quota has remained unchanged since 2004. In addition, the government approves a certain number of sliding quota import quotas annually, sliding tax rates ranging from 5% to 40%.

Last week, the Chinese government adjusted the sliding tax formula.

After the implementation of the new sliding tax policy, the import cost of New York cotton futures will remain unchanged at a price below 50 cents per pound or above 100 cents per pound.

But if the quotation is 50-100 cents, the import cost per ton will increase by 512 yuan.

Guo Hai Liang Shi futures analyst said that through the new calculation method, the government hopes to reduce the impact of low international cotton prices on domestic prices.

Analysts said that the shrinking demand for textiles and increased production costs also depressed cotton producers' enthusiasm for production.