Improving The Added Value Of Products Will Help Textile Enterprises Survive The "Cold Winter"

After reaching the highest price in the past 150 years, China's cotton is surrounded by cheap international cotton. Strategic interests in national cotton and spin How to balance the interests of the industry? This is a problem.

Winter in textile industry

In the hot summer, it is the "cold winter" of textile enterprises.

"The production of textile enterprises has been adjusted to a very low level. As far as the operating rate is concerned, 30% - 50% of the large manufacturers, and many of the small factories have stopped working. The lack of orders and the bad market have led to the shortage of production of textile enterprises." Zhang Wenmin, director of the cotton research and development center of Wanda Futures, told reporters.

China is a large textile country, with more than 40 million employees in the textile (including clothing) industry. Public data shows that as of 2011, the spinning production capacity has reached half of the global total output. Recently, the China Cotton Association's survey of 17 provincial key cotton textile enterprises showed that from January to May 2012, the cumulative yarn output of enterprises above designated size decreased by 1% year on year.

Rome wasn't built in a day. The textile industry has been in winter since last year. According to the data released by China Customs, China's textile exports totaled US $94.7 billion in 2011, up 22.9% over the same period last year, but the growth rate fell 6.5 percentage points. According to the 2011 annual report of Weiqiao Textile (HK. 2698), the world's largest textile enterprise, its revenue in 2011 was more than 15.2 billion yuan, a year-on-year decrease of 14.8%. Affected by the downturn in the international demand market and cost factors, some international orders began to shift to Southeast Asian countries with lower costs.

It seems that the downturn in the international market and the cost of textile enterprises are the main reasons for the cold winter. Cotton accounts for 70% of the cost of textile enterprises. The price of cotton, to some extent, determines the life and death of textile enterprises.

Since 2009, the domestic cotton price has risen all the way. From October 2010 to February 2011, the cotton price once reached an astonishing 32000 yuan/ton.

Ma Junkai, secretary-general of Dezhou Cotton Association, Shandong Province, analyzed the rise of cotton prices to the reporter of the Times Weekly. On the one hand, the downstream textile industry has strong demand, while the domestic output is low, that is, the natural rise in economic sense; On the other hand, it is the speculation of hot money. Some analysts pointed out that there were a large number of commercial bank funds entering at that time. Driven by domestic cotton prices, international prices have also risen.

When you go up, you go down. From September 2011 to March this year, the state took advantage of the decline in cotton prices to purchase and store, making the domestic standard cotton price stable at 19300 yuan to 19600 yuan/ton from the end of 2011 to March 2012, and gradually falling to about 18000 yuan/ton recently.

The sharp decline in international cotton prices this year is due to the large cotton planting area, large output and oversupply in the world. In addition, the world economy is depressed, consumption is sluggish, and the downstream textile industry is depressed, so cotton consumption is reduced.

"By the end of March this year, the state had collected more than 3.3 million tons of reserve cotton at the price of 19800 yuan/ton, and the reserves carried forward in 2009 added up to about 4.4 million tons. Due to the excessive reserves, the price difference between domestic and international per ton was 3000 to 5000 yuan." Zhang Wenmin told reporters.

At present, Australian cotton is 18000 yuan/ton, and Indian cotton is 16000 yuan/ton. In China, cotton of the same quality can only be purchased at 21400 yuan/ton.

"The current situation is that the textile enterprises will definitely lose money by using domestic cotton, and can barely maintain by using imported cotton," Zhang Wenmin stressed.

However, textile enterprises must import cotton according to quotas. According to the World Trade Organization agreement, China's annual cotton import quota is 894000 tons, and 1% preferential tariff is levied; For imported cotton beyond the quota, a sliding tax of 5% - 40% will be levied.

Ma Junkai told reporters that China consumes 10 million tons of cotton every year, produces 7 million tons, and imports an average of 3 million tons every year.

In other words, the rigid demand of 3 million tons is real. This means that excluding the quota of 894000 tons, the rigid demand for cotton exceeding 2 million tons every year will be imported by paying high sliding standard tax.

The annual output is 7 million tons, with a gap of 3 million tons. In 2011, the state collected and stored more than 3 million tons. Therefore, the gap now is at least 6 million tons. Due to the restrictions of the national reserve system (buying and storing when the market price is low, and supporting the market to guarantee the price; increasing the volume when the market price is high, and stabilizing the price), many insiders interviewed by reporters believe that according to the current stable price trend of domestic cotton, the country cannot sell reserves at this time; Then, the only way to solve the gap is to increase imports. {page_break}

According to the recent data released by the National Development and Reform Commission, China imported 502000 tons of cotton in May, a year-on-year increase of 246.2%; From January to May this year, China imported 2.58 million tons of cotton, up 113.8% year on year.

At this time, the advantage of quotas (only 1% tariff) appeared. Many cotton enterprises and traders are hoping to get more import cotton quotas to get out of the predicament, because the price of imported cotton with quotas is very low and the profit space is large. Zhang Wenmin revealed that the resale price of import quotas in the market exceeded 3000 yuan/ton.

Authoritative data shows that in the first three months of this year, China's textile and clothing products exported to Japan increased by about 7% year on year, while Japan's imports of similar products from Vietnam and Cambodia increased by more than 40% year on year. Moreover, the origin of some brand clothing has changed from China to Vietnam, Bangladesh and other Southeast Asian countries and regions.

The reality has sounded the alarm bell that China's advantages in raw materials are no longer obvious. If you want to continue to seize the overseas textile market share, you must find another way to improve the added value of products, which has become a subject that every export enterprise must face.

hold still cotton ?

In order not to repeat the mistakes of soybeans - the entire oil industry chain is controlled by foreign capital, it is the good intention of the country to ensure China's cotton planting area and output by relying on the market to collect and store, and ultimately protect the entire cotton industry chain. Including the imposition of sliding rate tax beyond the quota, which is equivalent to setting a floor for the price of imported cotton, in order to reduce the impact of imported cotton on the domestic cotton market and ensure the income of cotton farmers.

Ma Junkai calculated an account for the reporter: the cost per mu of cotton field in Dezhou is 480 yuan, including seeds, pesticides, fertilizers, watering land, etc. (excluding labor). In previous years, the normal yield per mu was 520 jin, but due to the disaster, the average yield of cotton in 2011 (from April 2011 to November 2011) was only 475 jin per mu.

From September 2011 to March 2012, in order to protect the interests of cotton farmers, the state collected and stored cotton at exposure. According to the national purchase price of 19800 yuan/ton of lint, the direct income per mu of cotton field is 1300 yuan after conversion.

"Cotton can only be planted one season a year," Ma Junkai told reporters. "If one mu of land is planted with the last season of wheat and corn, the income will be about 1600 yuan.". Obviously, the benefits of growing grain are greater than those of growing cotton. Moreover, planting cotton takes more time than planting grain.

"Thanks to the collection and storage of the country, if there is no such protective collection and storage, the price of cotton will be lower, and cotton will be even more unpopular," Ma Junkai said. "If there is no storage, it may fall to 17000-15000 yuan/ton."

Even so, the cotton planting area is still declining. Ma Junkai introduced that the cotton planting area in Dezhou, Shandong Province in 2012 was 1.3 million mu, 20% lower than last year; However, Shandong Province as a whole declined by 15%, and 9% nationwide.

Based on this, the state recently issued the 2012 annual purchase and storage policy, which increased the price by 600 yuan compared with 2011, reaching 20400 yuan per ton.

Storage is a double-edged sword. The national cotton purchase and storage price policy has played an important role in improving cotton farmers' planting intentions, stabilizing domestic cotton prices, and avoiding sharp fluctuations in cotton prices; However, the other result is that the domestic cotton price is difficult to reduce due to the support of the purchase and storage prices, and the domestic and foreign cotton prices are upside down, resulting in the high cost of China's cotton textile industry and a certain resistance to the export of textiles and clothing.

"On the one hand, we should protect the interests of cotton farmers, and on the other hand, we should also protect the interests of the cotton textile industry, which should be taken into account. The textile industry should not be ignored: the annual output value of 200 billion dollars, 40 million workers." Zhang Wenmin told reporters.

"This year, if China continues to open up to purchase 6.4 million tons of cotton, plus the existing 4.4 million tons of reserves, this year will exceed 10 million tons, which will create new pressure on the market. After receiving such a huge amount, what should we do next year?" Zhang Wenmin told the Times Weekly, "We need to adjust the protection policy of cotton farmers. Can we borrow the policy of planting subsidies from food and agriculture? After supplying cotton farmers, cotton prices will float freely, so that we can stay at the same price level as foreign cotton. If this effect is achieved, there will be a big change."

Zhang Wenmin said that as long as self production accounts for 1/2 or 3/5 of the demand, industrial safety can be guaranteed. In 2011, the consumption of cotton reached 10 million tons, and the output of China accounted for 7 million tons, up to 70%.

The China Chamber of Commerce for Import and Export of Textiles also made a public statement to the media that at present, it is an option to appropriately increase some cotton import quotas, and the national finance should appropriately bear some cotton losses, and finally cancel cotton Import quota I'm afraid it is imperative.