Is Cotton Price Falling Risk Or Positive?

China cotton According to the joint data released by the association, the domestic cotton price dropped from 31241 yuan / ton in March last year to 18325 yuan / ton at present, a drop of 41.3%. However, the reporter found that cotton prices Fall It did not bring benefits to textile enterprises and consumers. Not only did the textile enterprises complain, but the clothing on the market did not depreciate.

Cotton prices have risen sharply in recent years

Over the past two years, domestic cotton prices have plunged into a vicious circle. From September 2010, cotton prices surged from 18 thousand yuan / ton to 30 thousand yuan / ton, up to 34 thousand yuan / ton. Starting in September 2011, it also plummeted from 34 thousand yuan / ton to 19 thousand yuan / ton in December 2011. Recently, cotton futures and spot prices have dropped to the lowest point of the year. As of 22 days, China's cotton price index for the 18325328 grade cotton national weighted average price of 18325 yuan / ton.

"30 thousand yuan per ton is supposed to be high." Yesterday, Zhuo Chuang consulting cotton industry analyst Sun Liwu in an interview with our reporter, said a large number of hot money into speculation is pushing hands. According to Sun Liwu analysis, domestic demand has been maintained at around 8 million tons, plus the volume of imports, which is much larger than demand. In the downstream terminal market, the international consumer market recovery is weak. cotton textile Output has shrunk considerably compared with previous years, and weak market demand has also reduced cotton prices to a certain extent.

High and low enterprises suffer

Cotton prices continue to decline, which is not good news for downstream textile enterprises.

Zhou Wei is the general manager of Hechuan He Yi Textile Co. Ltd., which has been exporting grey cloth to the Middle East market for a long time. "Many people believe that the reduction of cotton prices is good for textile enterprises, but in fact, it brings a lot of risks to enterprises." Zhou Wei said that the decline in cotton prices will be transmitted to downstream textile enterprises that produce cotton yarn, grey cloth and clothing. Because of the psychology of "buying up or not buying down", textile enterprises will reduce orders, while cotton demand will decrease, and cotton prices will continue to fall, resulting in a downward trend in prices. At the same time, customers will also reduce product prices for this reason. "The choice we are facing now is either to stop production or to protect the market at a loss." Zhou Wei said with a bitter smile.

Domestic cotton prices are still high.

"Cotton price's impact on textile enterprises is mainly from domestic and foreign cotton price inversion, which has weakened the competitive advantage of export enterprises." Sun Liwu said that the cost of using cotton in domestic textile enterprises is higher than that of foreign textile enterprises, while the price of export textile products keeps the same price as foreign products. The difference in the cost of cotton consumption is weakening the international competitiveness of domestic textiles and garments and other export commodities, resulting in an increase in export speed and a worsening of external losses.

The reporter has learned that in addition to giving priority to the import of cotton yarn, finding alternative alternatives has also become another way to reduce risk.

Li Yong, Secretary General of Chongqing textile and garment trade association, told reporters that in the face of the variable cotton market, there are some new changes in the textile industry this year. For example, the ratio of textile to cotton is decreasing, and the consumption of polyester and other substitute products is increasing. At the same time, some textile enterprises have also adjusted their product mix accordingly.

　　 Clothing prices will not drop or rise

"Cotton prices fall, basically will not cause terminal cotton textile products to reduce prices." Li Yong, Secretary General of the Chongqing textile and garment trade association, analyzed the proportion of raw materials to cost in a garment industry. The proportion of labor cost increased from 15% to 30%, and the proportion of energy cost increased from 10% to 15%. "Labor costs and energy costs run against the impact of raw materials on terminal prices." Li Yong said, especially for the brand clothing enterprises, especially in the positioning of high-end brand enterprises, because the added value of products is higher, raw material fluctuation has less impact on them.