Wei Qiao Rushed To Grab Cotton &Nbsp; How About Cotton Price?

Despite the increase in cotton prices after the Spring Festival in the doldrums for more than 3 months, the world's largest textile enterprise, Shandong Wei Qiao Venture Group Co., Ltd. (hereinafter referred to as "Wei Qiao group") has launched the purchase of cotton.

In February 14th,

"The roller coaster type cotton prices in recent two years have made most textile enterprises wait-and-see. This year, most textile enterprises started a lot later than before."

In February 22nd, Ma Junkai, Deputy Secretary General of the cotton association of Dezhou City, Shandong, told the "China Times" reporter: "especially after last October, the price of cotton has dropped, leading to a downward trend in cotton yarn prices. Textile enterprises are basically in a state of loss or profit."

Wei Qiao tries to rob cotton

It is reported that the 1 billion yuan short term financing certificate issued by Wei Qiao group is the first issue in 2012, and it is intended to use all the proceeds to buy lint.

According to business news, cotton prices continued to rise in February 21st, and the purchase price of three grade lint of textile enterprises was 19800 yuan / ton, and the volume of imports was very small, but the purchase amount of imported cotton increased.

According to the analysis of the industry, the reason why the cotton picking of Wei Qiao group is early should be related to the new cotton temporary purchase and storage policy.

"In March of this year, the state will introduce the 2012 temporary collection and storage policy."

In a recent conference organized by a securities dealer, the head of the China Cotton Storage Information Center said, "the basis for the purchase and storage of the price last year came from the grain price parity of wheat, corn and rice.

This year, grain subsidies and grain purchase prices are rising. In order to stabilize the overall situation of cotton, the final purchase and storage price should be slightly higher than that of 19800 yuan / ton.

This means that in the case of the state reserve city, cotton prices in 2012 are hard to come down sharply.

"In the past year, the new cotton purchase season will end until the end of April and early May. This year, it is estimated that there will be less than two months, and that is the end of March."

In February 22nd, Ma Junkai told the "China Times" reporter that after the Spring Festival, the enthusiasm of cotton processing enterprises was higher than that of the previous years because of the rebound in cotton prices.

Always low-key.

According to our understanding, since the launch of new cotton in October last year, Wei Qiao Group intends to purchase 500 thousand tons of new cotton in the fourth quarter of 2011 and the first quarter of 2012, with an estimated cash expenditure of about 10 billion yuan.

This issue of 1 billion yuan short margin, is clearly to make up for the liquidity gap, to ensure the supply of raw materials.

Dispute settlement reserve price

In the eyes of one industry, the market price of the 19800 yuan / ton storage price is very different now. Because the cotton price has already seriously affected the competitiveness of China's cotton textile industry compared with the high foreign cotton prices, the textile industry has repeatedly reflected this issue.

Looking back cotton prices will depend more on the policy of the central reserve, downstream demand and so on.

The above told reporters that at present, due to factors such as the national reserve city and other factors, the domestic cotton prices for a long time are located at more than 20000 yuan / ton, and the price of cotton in India is currently only 11000 yuan / ton (that is, domestic cotton price is higher than India cotton price is about 80%), which has obvious advantages compared with China, and its labor cost is also low.

At present, cotton consumption demand in various countries is still generally weak, and the market output exceeds demand.

But these people believe that, "in 2012, the domestic cotton prices remain weak market turbulence operation is more likely, after all, the state's rigid purchase and storage price is there, down or down."

Ma Junkai analysis, because the current supply of 40% of the domestic supply of foreign pport in Xinjiang area still has some problems, and its main flow to the national storage system does not enter the circulation field, so the market supply is tight, cotton in February -3 month price will probably remain strong.

Another problem is that the price of roller coaster cotton since 2010 has made textile enterprises suffer a lot.

In 2011, the price of 328 grade cotton in domestic market was 27500 yuan / ton in early January, and rose to 31550 yuan / ton in March.

Last year, cotton prices plummeted as foreign economic slump brought about a decline in export orders, tightened domestic liquidity and reduced enthusiasm for idle capital speculation. In August, it fell to 19034 yuan / ton. Until September 8th, when the state implemented 2011 cotton purchase and storage, cotton prices were able to stop and rebounded slightly.

And after mid October, cotton prices fell again, and the whole quarter of the quarter, the cotton market has been in a low state.

"If the cotton price fluctuates greatly, no matter the rise or fall, it is not conducive to the stable operation of cotton spinning enterprises."

Gu Qingliang, Professor of textile Economics Research Institute of Donghua University, analyzed that if the cotton price is high and the cost of raw materials can not be pferred to the finished products or intermediate products, it will inevitably squeeze profits; otherwise, the situation of inventory depreciation and Book profit decline will be easy.

As the largest textile enterprise in the world, Wei Qiao group is also deeply affected.

Wei bridge group also disclosed in this short margin prospectus, in the fourth quarter of 2011, the company's main business profits declined significantly.

Wei bridge group explained that this is mainly affected by the sharp decline in product prices, the company has prepared a price decline for the existing inventory preparation, thereby negatively affecting the profitability of the quarter.

Wei Qiao group

This newspaper noted that the recent RMB exchange rate against the US dollar broke 6.3 points.

The pressure of continuous appreciation of RMB is a big test for China's export oriented textile industry.