Textile Enterprises Have Been Fired Because Of The Import Quota Of Cotton.

This year, domestic and foreign cotton prices upside down, the difference is 4500-5000 yuan / ton, textile enterprises try to use imported cotton, even if the current price of additional import quotas, the combined cost will still be lower than domestic cotton prices.

"Cotton import quota was fry, the highest paction reached 3800 yuan / ton, but I did not buy it."

In August 8th, Guangzhou textile trader Xiaoshan told reporters.

Xiaoshan is very glad that as early as August 2nd, he snapped up 500 tons of cotton import quotas from the market, ranging from 2800 yuan to 3300 yuan per ton, including 2800 yuan for 200 tons, 3200 yuan for 200 tons and 3300 tons for 100 tons.

And a year ago, the price of cotton import quotas in the market was 1200 yuan / ton.

This year, domestic and foreign cotton prices upside down, the difference is 4500-5000 yuan / ton, textile enterprises try to use imported cotton, even if the current price of additional import quotas, the combined cost will still be lower than domestic cotton prices.

"Many cotton merchants are trying their best to reverse quotas."

Xiao Shan said, "getting a quota is equivalent to getting a business."

Stir frying quota

Xiao Shan runs a small textile mill. At present, his factory only starts 50% to maintain big customers, and the remaining capacity is in a state of shutdown.

In order to maintain the normal operation of the half capacity, Xiao Shan has been inquiring about buying cotton quotas from time to time.

In order to limit the impact of foreign cotton imports on the national cotton market, China has imposed quotas for cotton imports since 2004. Cotton spinning enterprises must apply for quotas if they want to get imported cotton.

According to the data released by the national development and Reform Commission last year, the import quota of this year is 894 thousand tons, which has not changed since 2004.

According to Xiao Shan, cotton import quotas are mainly concentrated in large state-owned cotton foreign trade enterprises and large textile processing plants, and small and medium-sized enterprises do not have import quotas.

However, textile processing enterprises are affected by the right to operate foreign trade and credit lines, and the quantity of imported cotton is limited.

Therefore, in the current market, Cotton Traders imported cotton, plus

Or the quota on the processing plant can complete a cotton import paction.

Xiao Shan said that the reason why there is a circulation of cotton import quotas in the market is that some enterprises applying for quotas to the state each year do not have substantial cotton spinning production and trade. They do not need to import cotton and get quotas for resale. In addition, some also falsely report production trade volume, apply for cotton import quotas higher than their own capacity requirements, and then sell surplus quotas.

All along, domestic cotton supply is in short supply, some small and medium-sized textile processing enterprises purchase imported cotton through the purchase quota to ensure production.

China is the largest country with the largest consumption and import volume of cotton in the world.

According to Wang Jianhong, Deputy Secretary General of China Cotton Association, 2011/12, China's cotton output is about 7 million 200 thousand tons, and its consumption is about 9 million tons. The 2011 year cotton temporary storage and storage online paction ended in March 31st this year, and the total turnover of cotton was 3 million 125 thousand tons. The number of cotton storage and storage accounted for 49% of the total cotton output in 2011, accounting for 53% of the 5 million 950 thousand tons of domestic stock at the end of the year, all of which reached a record high.

According to the June business inventories survey, by the end of June, there were only 1 million 730 thousand tons of commercial cotton in the whole country, including 1 million 330 thousand tons of commercial stocks in the mainland.

"A high proportion of the state's collection and storage has increased the price of cotton in the market."

Xiao Shan thinks, "from the total output of cotton and import quota in China, it is lower than cotton consumption in China".

New cotton slip quotas will be issued every year after the end of the new cotton harvest.

This year's new cotton purchase and storage will start in September. In the last two months of this year, the market quota of cotton import quotas has not been consumed much, and the price has also been extremely high.

Lost profits

Xiao Shan believes that the increase in quota prices is directly determined by the spread of cotton prices at home and abroad.

"Do not say that 3800 yuan per ton, that is, the quota price of 4000 yuan, plus the price of cheap imported cotton, the total cost is still lower than the domestic cotton price, textile production enterprises will still choose to use imported cotton."

Most enterprises do not have enough cotton import quotas, so they can only use domestic cotton.

Xiao Shan said that the cost of buying cotton yarn for domestic cotton production is 24000 yuan -25000 yuan per ton of cotton yarn, while the mainstream price of 32S knitting yarn is 24500 yuan / ton in the market, and the mainstream price of 32S high yarn is 26000 yuan / ton.

Take 002042.SZ, the world's largest colored spinning leader, for example, the company reported that its operating income in the first half of this year was 2 billion 792 million yuan and its operating profit was 4 million 490 thousand yuan, down 0.84% and 98.44% respectively from the same period last year.

Song Chenling, vice chairman of Huafu color spinning, said that the sales volume of the Huafu color spinning company is basically stable, and orders are all continuous orders. Therefore, there is no significant change throughout the year, and the main factor that affects the company's performance is cost.

Huafu color spinning product line mainly covers pure cotton yarn, blended yarn, pure cotton grey cloth and blended grey cloth, and the cost of cotton accounts for 60% of the production cost.

Last year, the national price of the new season for the storage of cotton was 20400 yuan per ton.

At the same time, the price of imported cotton from the coastal cotton import port area is less than 15000 yuan / ton.

Directly reflecting the cost pressure of Huafu color spinning is that domestic cotton is down 1000-1500 yuan / ton compared with last year, but is still 4000-4500 yuan / ton more than imported cotton.

According to the national standard, Huafu color spinning produces more than 1 million spindles per year, and consumes about 110 thousand tons of cotton.

Therefore, if the domestic cotton is ordered at home, the cost of the company's cotton will be 110 million -1.5 billion yuan. If we look at the spot market, the cost of the cotton will be more than 450 million -5.5 billion yuan more than the cost of using the imported cotton.

Li Jie, an analyst with Everbright Securities, said that because of the "cost plus" pricing model of yarn products, the reference cost benchmark for export orders was lower than the international cotton price, so the yarn order price was low. On the other hand, because of the limited quota of cotton import quotas issued by the state, the domestic textile enterprises mainly used high priced domestic cotton in production, and the pressure of production cost should not be underestimated.

In the interim report, Huafu color spinning said that the price of yarn sold in the first half of this year dropped by nearly 30% compared with the same period last year.

"Domestic cotton production with high cost is constantly falling in price, which means that the larger the volume of production, the more profits will be consumed."

Xiao Shan said, "therefore, most SMEs in the industry try to reduce output, spare capacity and maintain core customers."

But Huafu color spinning, a listed company, has to increase its capacity in order to impact its annual performance.

According to the company's report, sales in the first half of 2012 increased by 41.31% over the same period last year, but the gross profit margin decreased significantly, resulting in a significant decline in the first half of the year.

In the second quarter of this year, the gross profit margin of Huafu color spinning has dropped from 19.9% to 12.6%.

Waiting for cotton

According to Xiaoshan analysis, Huafu color spinning is only a microcosm of the industry.

In the first half of this year, the losses of the textile industry exceeded 80%, and the pressure and duration of the enterprises were far greater than that of 2008.

Ma Junkai, Deputy Secretary General of Shandong Dezhou Cotton Association, also said that this year, all cotton textile enterprises that use cotton as raw materials are in a state of loss. At the same time, the mixed textile enterprises which use cotton and chemical fiber are in between micro deficit and small profits. The use of cotton makes the chemical fiber enterprises profitable, but the profit level is much lower than in previous years.

"Buying cotton at a high price and selling yarn at a low price will make it impossible for any enterprise to last for a year."

Xiao Shan told reporters, "since this year, few enterprises have bought cotton for the period. Small and medium-sized enterprises are buying and selling now, and large enterprises are also using cotton as little as possible."

Therefore, import quotas have become a lifeline for spinning enterprises.

This year's quota issuance has been relatively slow. This is a headache for many enterprises that want to get cheap cotton.

"The whole industry is waiting for cotton."

Xiao Shan said, "in the first half of the year, the gap of spare capacity in the textile industry can only be made up by imported cotton yarn."

Because China's cotton yarn imports have no quota restrictions, cotton spinning enterprises prefer to import cotton yarns directly from India and Pakistan, and then sell them to downstream textile enterprises or clothing enterprises.

"Many cotton spinning enterprises have to pfer their capacity directly to Southeast Asian countries, producing spinning and re exporting to China.

This directly weakens the competitive advantage of domestic textiles. "

Xiao Shan said.

According to the historical data released by the General Administration of customs, the number of cotton yarn exports decreased by 9% in the 1-5 months of this year, and the import of cotton yarn increased by 78% compared with the same period last year. The imports of pure cotton fabric increased by 133% compared with the same period last year, and the export volume of cotton products decreased by 3.4% compared with the same period last year.