How To Follow The Road Of Sustainable Cotton Development

2011~2012 Cotton policy The purchase and storage has ended. However, whether it is policy or industry, how can we achieve sustainable development of cotton industry chain? This problem has already been placed before us very urgently. In terms of the most sensitive purchasing and storage prices, textile enterprises generally believe that they are already very high, because the cotton price raised by the policy is higher than the international market by more than 3000 yuan / ton, but for farmers, they do not feel "thirst". According to grain and cotton at 1:10, from the perspective of rising labor costs, farmers do not "quench thirst". In the "round table dialogue" at the 2012 China Cotton Industry Development Summit Forum, the forum guests expressed their views on how the policy design level can make the cotton industry sustainable development and how to make the industrial chain win-win.

　　 Cotton purchase and storage in the long term

Gao Fang (executive vice president and Secretary General of China Cotton Association): "round table dialogue" is a reserved program of our forum. It is also a link between various ideas colliding, passion and sparks. The guests on the stage represent all aspects of our cotton industry chain. Let's listen to their wonderful speeches.

Lu Huaiyu (president of China Cotton Association cotton grower Cooperation Branch): the policy of purchasing and storage is very important for stabilizing cotton production and stabilizing the cotton industry, especially in the current market situation. In order to promote industrial development in a long-term and sustainable way, we need to take into account the interests of all parties. The interests of cotton farmers should be considered and the interests of textile enterprises should also be considered. In fact, each party can not achieve its own expectations, but for the whole industry, it is a major consideration for policy design to make profits or disadvantages. Although it is called temporary purchase and storage, I think this should be a long-term and effective policy.

Yao Mingye (general manager of China cotton reserve management corporation): China Cotton Storage Company as a country Macro-control One of the main executors of the task is to protect the interests of cotton farmers and ensure textile supply. Judging from the implementation of the temporary storage and purchase task in 2011, by the end of March this year, 3 million 150 thousand tons had been traded, and the actual storage reached 3 million 250 thousand tons (there was a storage error). Judging from the whole situation, it has exceeded the highest level of cotton storage in China in more than a year.

From the beginning of September 2011 to the end of March 2012, under the correct leadership of the national development and Reform Commission, with the efforts of all parties involved in cotton industry, the three satisfaction of cotton growers, cotton processing enterprises and cotton merchants has been basically achieved, and it has also been affirmed by the relevant departments of the state.

Many comrades are asking me whether they can carry out the purchase and storage work in 2012. For this reason, the comrades of the national development and Reform Commission have made a positive answer. China Cotton Storage Company as Interim Implementation Purchasing and storage policy The main body, we resolutely implement the national guidelines and policies, and resolutely fulfill the responsibilities and tasks entrusted to us by the state. In 2012, we will further summarize our experience on the basis of 2011, improve the process, improve our working methods, and better accomplish the temporary storage and retrieval tasks. Here, I would like to emphasize four points: first, we should pay more attention to lint price and seed cotton price; second, pay more attention to the problem of single package weight; overweight cotton bags must be limited this year; third, pay special attention to the proportion and quality control of water samples; finally, pay special attention to the relationship between the progress of the sale.

{page_break}

　　 Decision making is based on industrial demand.

Gao Fang: indeed, although the cotton storage and purchase in China may be the highest in history this year, is the real stock level the highest in history? I also checked that in the 1984 of last century, the total volume of industrial and commercial stocks and national cotton reserves exceeded 6 million tons in that year. In order to collect and store, the state built light steel structure warehouse in that year, and built the warehouse that year. Today, the Chinese government is more powerful in regulation and control. Such a little cotton country can still get it. It is understandable that everyone should have a little refreshment for the government in terms of purchasing and storing capacity. If China store cotton company is a state-owned enterprise that assumes the task of national regulation and control, then the China cotton group is an enterprise swimming in the big market of the market. China cotton group was founded in 1993, when cotton was not fully liberalized, it also took up some countries' reserve tasks. In the past few years, the market has been more market-oriented. This year, they were also the first to auction cotton reserves.

Shi Jinkai (Chairman of China Cotton Group Co., Ltd.): "the sustainable development of cotton industry under the global pattern" is very realistic and very large. I have some personal ideas about the national macro policy: the formulation of any national policy must proceed from the reality of the industry, and the basis for policy formulation must start from the needs of the industry. Can we analyze the current situation and problems of the entire cotton industry? For now: first, cotton production is stable and lingering; the two is the steady growth of the textile industry, especially in the past decade, especially the accession to the WTO. The textile production capacity and the development of cotton textile enterprises are obvious to all. Three, the market volatility is increasing, whether the cycle or the fluctuation amplitude is relatively intense since 2003, and the four is the difficulty of macroeconomic regulation and control.

And what are the problems in the current situation? The first is the shortage of production. Regardless of the output of 6 million tons or 7 million tons, compared with the demand of 10 million tons or 9 million tons, the gap should be more than 2 million tons. This is a normal situation. This contradiction should be the first contradiction existing in the whole cotton industry. The second contradiction is that the macroeconomic regulation and control is more difficult, because with the market changes and the change of the whole economic environment, the factors that affect the cotton market change are more and more complex, which has increased the difficulty of national macro-control. This is reflected in several aspects: first, the internationalization of China's cotton market shows that China's cotton development has been integrated into the international market. Second, the characteristics of China's agriculture have put forward higher requirements for macroeconomic regulation and control. From the point of view of market and circulation, the market is not perfect, the market players are small, scattered, competitive power is weak, and the operating basis is relatively low. In this market, we can only participate passively, let the market control, without many conditions and capabilities to face the market from the front.

　　 The market supply and demand amplitude is larger.

Gao Fang: as a circulation enterprise, facing farmers and facing the textile industry, it is very difficult to control. Below is the key link of our industry chain. The textile demand situation is affected by China and even the global situation. Enterprises generally feel very sad and even more difficult than the financial crisis in 2008. What is the view of the textile industry on the design level of the government and the trend of the next step? Let's listen to the views of President Yang.

Yang Shibin (Assistant to President of China Textile Industry Federation, President of China knitwear industry association): now the whole market system of cotton growers, cotton yarns, cotton cloth and cotton clothing is under one roof, not before, "you are yours, I am mine", so there is such an argument that it is really good for us to communicate with each other.

{page_break}

I want to talk about it from several aspects, one is how to look at the cotton policy, and the two is the current industrial situation.

Cotton policy is one of the few top-level design policy systems in China. The NDRC takes the lead together with ten national departments and banking systems. This policy is undoubtedly good, and it is also profitable for cotton farmers from the executive level. The main body of the contradiction before buying and storing is between collecting and breeding, and the contradiction after receiving cotton is changed to the contradiction between the recipient and the cotton buyer. How to deal with the circulation of cotton in the post road enterprises is basically considered from three aspects: the overall supply and demand of the market, the current volatility and price difference of cotton.

First of all, director Zhang Xianbin said that only so much cotton, so much consumption, especially in recent two or three years, cotton supply and demand did not have such a large amplitude. But in the trade market, it is not quite clear that cotton volatility is more than 150%. This is not only a situation caused by supply and demand, but there are other factors in it, which may have different judgments. Second, the spread of cotton yarn spreads obviously. When the wave amplitude is huge, there is a good opportunity for traders, but when the volatility is relatively small, it is beneficial to industrial enterprises. When cotton is rising rapidly, it is difficult to quote, like the production period of the latter road is almost 3 months. Under such circumstances, if cotton has a fast rising process within a week, two weeks, and Thursday weeks, the cotton needed now will mean a higher cost than before, and the enterprise will lose money; conversely, when the price of cotton drops rapidly, it is still a difficult situation for the enterprise to quote the price of the cotton. The price of cotton is still very difficult to quote. In, the price of cotton will increase. The original production cycle of 3 months, cotton at this stage of decline will have a beneficial impact on production and operation, because the enterprise is to get a relatively cost-effective price, however, customers also understand this cycle, in the order, will not according to the 3 month cycle to give you order, but the order cycle short, from 70 days to 60 days, so to textile production enterprises bring great pressure.

In the first 4 months of 2012, macroeconomic data leaders have already reported. In terms of exports, the EU dropped eight percent points, increased eight percent points to Japan, and increased 20% to Southeast Asia. There is a big reason for this. In the orders received, the United Nations has set up a world's least developed country and region, requiring large purchasers to consider the development of the balance problem, consider the humanitarian issue, and ask for a certain proportion of orders to be purchased from these countries. Therefore, some of the orders now have 5%~10%, or a higher proportion, from Southeast Asia, such as Bangladesh and Kampuchea. So, now the back-end industry, especially the garment manufacturing sector, has already moved a considerable number of enterprises out of production capacity. What's the consequence? They want to globalized their own resources, which will bring considerable difficulties and challenges to the follow-up implementation of the national macro policies we mentioned earlier. From our point of view, we hope to do our job well. China only produces 6 million tons of cotton, we need about 10000000 tons of cotton, and the supply can not meet the demand. This is a huge problem. In this process, we are very willing to cooperate with the government departments to promote the follow-up storage and storage work next year.

Generally speaking, the order began to pick up in March this year. The difference is that the previous orders may be relatively loose but relatively balanced, but this year's order concentration degree is even higher. That is to say, the big brands require more manufacturers to cooperate with him. In cooperation, we obviously feel that the viscosity of the international big brands is increasing for Chinese manufacturers and suppliers, and the funds are relatively well equipped this year. After such a big brand + large supplier + large capital operation, there will probably be a big pattern adjustment this year. This will be beneficial to the formulation of some policies, which will change some small and scattered situations and increase the concentration degree.

{page_break}

　　 Integration of industrial chain as a permanent solution

Gao Fang: President Yang has affirmed our top-level policy design from the entire industry level, and raised concerns about our textile industry. This is a very realistic problem. At the government level, the balance between farmers and textiles is more balanced. The balance is more focused on domestic cotton supply and demand. At present, the competitiveness of textile enterprises, especially cotton textile enterprises has also brought certain challenges. Next, we invite Mr. Sun Weiting from the forefront of textile production enterprises to talk about his views.

Sun Weiting (Chairman of Huafu color spinning Limited by Share Ltd): I am very glad to have this opportunity to communicate with you. I think so. From a macro policy perspective, the current policy of temporary purchasing and storage is the best policy, and the price is more appropriate. In the report of Zhang Xianbin, director of the NDRC, there is a saying "maybe this policy is a last resort", so I think this interim policy may not be sustainable. I think we should look for sustainable policies or the sustainability of policies. This is very important because the policy will have several side effects:

First, protecting backward agricultural production mode. The Lewis turning point, which has not appeared in many parts of the world, has emerged in China. The cost of the cotton production mode of the small-scale peasant economy is viewed as a negative effect from the perspective of global resources. Second, it is easy to generate two kinds of resources and two kinds of prices. Third, the purpose of regulation and control has been solved, but it will also generate new content that needs regulation and control. For example, the cost of collecting and increasing is increasing, so we must use regulation to solve the problem of regulation and control.

The formulation of cotton policy should be made planned economy Thinking and means are spanformed into the thinking and means of a complete market economy. Therefore, first, we should give China's cotton agriculture a spanitional period for president Lu. We should not protect it forever. Three years or five years must have a time limit. Perhaps our country is very short of money and financial deficit, but the cotton textile industry is a "mother" industry. After more than 30 years of reform and opening up, if the tax payers get the most, then it should be the cotton textile industry. Now the "mother" has difficulties, and become a son and grandson. Second, collecting and storing is a very effective measure. Instead, it should be replaced by depository system or consignment system, which can be stored in a market way. The problem now is that collecting and storing is relatively simple. It is very difficult to store and store. If we use the bidding method, we may raise the price. Then we put it in a planned way and put it in a quota way. So, besides these two ways, are there third ways? It's very difficult. Let go. The reason for the rise is the emergence of new fluctuations. Therefore, whether we can study the consignment system or the real right of enterprises, enterprises take risks.

Another point is to get through the supply chain of cotton, supply chain integration and the emergence of various trading modes for a long time and stability. This is my immature opinion on this industry for reference only.

{page_break}

From the perspective of cotton spinning industry, many data industry associations have reports. I stand in the perspective of enterprises, and I want to share with you my own judgement. Now the fiber consumption is not so large, there is no 29 million tons of cotton yarn. This is a key issue. My personal view is that 20 million tons of fiber demand is the normal now. Under this normal condition, half of the chemical fiber and half of the cotton are, therefore, from the point of view of industry, we must use all kinds of fibers to keep abreast of the impact of cotton fluctuation on the whole industry.

In addition, in order to increase the added value of cotton processing, the cotton industry should also be subdivided, and which areas should be divided into long staple cotton and those with fine staple cotton, which should be subdivided, and processed with subdivided quality standards into subdivision products to meet the needs of customers after subdivision. In this way, the price factor is not the main factor, and the factors of value will prevail in order to promote sustainable development.