Cotton Prices Go Low, Spinning Enterprises Complain

"Every time we sell 5 yuan cotton or polyester cotton products, we have to pay 0.1 yuan."

Wang Xinzhen, sales manager of the Hebei textiles import and export Limited by Share Ltd at the 111st Canton Fair, said excitedly.

Wang Xinzhen said that the voice of the majority of enterprises at the 111st textile exhibition hall of Canton Fair.

2011

After the end of the purchase and storage measures, the domestic cotton market is still in the doldrums, which makes buyers choose to wait and see.

Export textile enterprises are worried about a further decline in cotton prices, and prefer losing their goods ahead of schedule.

The drop in cotton prices is supposed to be good for textile enterprises, which is conducive to reducing their production costs. But nowadays, the low cotton price brings greater risks. Some foreign businessmen use this as an excuse to lower prices, and the export of textile fabrics is much worse than before.

In this regard, the textile and garment enterprises participating in the 111st Canton Fair generally hoped that the relevant departments should take measures to stabilize domestic cotton prices.

Low cotton prices, buyers take the opportunity to lower prices

It is generally believed that cotton is cheap to hurt farmers and cotton.

It should be good for textile enterprises, but nowadays, low cotton prices bring more risks.

According to Wang Xinzhen analysis, although the increase in cotton prices will increase the production cost of textile enterprises, it can be digested by the price of cotton fabrics and the height of the boat. At the same time, buyers will also step up the order to speed up pactions as soon as possible after judging the rising trend of cotton prices in the future market.

The decline in cotton prices will make merchants choose to wait and see. Some foreign businessmen even use this as an excuse to lower prices, and the export of textile fabrics is much worse than before.

"Cotton prices have dropped, why do the prices of commodities do not go down?" Wang Xinzhen said that after the domestic cotton prices began to fall, this is the most heard question he heard from merchants.

"We also want to drop it, but we really can't drop it. We have lost money."

Wang Xinzhen said.

Wang Xinzhen said that the company's external quotations for cotton products have been reduced by about 10% compared with the same period of the previous year, and the company now has to pay 0.1 yuan for every 5 yuan of sales.

But if the goods are not sold, if the cotton price in the future market goes further down, it will lose more.

"Rather than that, we prefer to cut the meat ahead of time."

Wang Xinzhen also mentioned that many cotton yarn factories downstream have already closed some production lines, and even chose to close down and stop production, so as to sell stocks simply.

In this regard, Zhejiang textile import and Export Group Co., Ltd., general manager of Zhejiang Wei Tai Trading Co., Ltd. Zhang Tong also feel the same.

He said frankly that the low domestic cotton prices gave merchants the capital to lower prices, but for enterprises, the room for price reduction was not large enough.

"The cost of labor and other factors of production is rising, and the external demand market is insufficient, which has led to a sharp reduction in the volume of enterprise orders, and merchants repeatedly asked to lower the unit price, the volume and price plummeted, and how many employees of the company were raised," Zhang Tong said helplessly.

Order pfer textile enterprises appealed for smooth cotton price

Although at this stage

However, it still shows a trend of "hanging upside down" with the international cotton price, while the prices of cotton and cotton in India, Vietnam and other countries are much lower than that in China, and they occupy a lot of market share.

Zhang Tong pointed out that the greater the cost of the coarsely processed cotton fabric products is, the more serious the order pfer is.

The orders that the company had had almost completely moved to Southeast Asia and other countries.

"In fact, cotton textile enterprises are most afraid of fluctuations in cotton prices.

As for exchange rate changes, enterprises can also avoid risks through some financial instruments, while the impact of severe fluctuations in cotton prices can not be effectively avoided, and the cost is difficult to control.

Zhang Tong said.

Statistics show that since the second half of 2010, domestic cotton prices showed a rare "first doubled, waist cut" sharp fluctuations.

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 nearly 32000 yuan per ton, or nearly 80%. In December 2010, the price dropped to 26000 yuan per ton, and then rose to 34000 yuan per ton in February 2011. Cotton prices fell from 30000 yuan per ton in March 2011, and the domestic cotton price is only about 19000 yuan per ton.

For this cotton price "roller coaster", interviewed by the textile enterprises generally complain incessantly, hope that the relevant departments can take measures to stabilize cotton prices, reduce the loss of enterprises.