Cotton Import Quota Is Exploited Small And Medium Sized Textile Enterprises Are Getting Worse

Domestic and overseas this year cotton The price is inverted. The price difference is about 4500 yuan/ton. Textile enterprises try to use imported cotton. Even if they pay the import quota at the current price, the total cost will still be lower than the domestic cotton price.

"The cotton import quota has been hyped crazy, and the highest transaction reached 3800 yuan/ton, but I didn't buy it." On August 8, Guangzhou textile traders told reporters.

Fortunately, as early as August 2, he snapped up the import quota of 500 tons of cotton from the market, and the price of each ton of quota ranged from 2800 yuan to 3300 yuan, of which 2800 yuan bought 200 tons of quota, 3200 yuan bought 200 tons of quota, and 3300 yuan bought 100 tons of quota.

A year ago, the maximum price of cotton import quota on the market was 1200 yuan/ton. This year, the price of cotton at home and abroad is upside down, and the price difference is 4500-5000 yuan/ton. Textile enterprises try to use imported cotton. Even if they pay the import quota at the current price, the total cost will still be lower than the domestic cotton price. "Many cotton merchants are trying their best to reverse the quota," said the trader. "To get the quota is to get the business."

Speculation quota

He runs a small textile factory. At present, his factory is only operating 50% to maintain large customers, and the rest of the production capacity is in a state of shutdown. In order to maintain the normal operation of this half of the production capacity, traders often inquire around to purchase import cotton quotas.

In order to limit the impact of foreign cotton imports on the domestic cotton market, China has stipulated quotas for cotton imports since 2004. If cotton textile enterprises want to obtain imported cotton, they must apply for quotas. According to the data released by the National Development and Reform Commission last year, this year's tariff import quota is 894000 tons, which has not changed since 2004.

According to his introduction, 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, due to the influence of foreign trade operation rights and credit lines, textile processing enterprises have limited imports of cotton. Therefore, in the current market, only the cotton imported by cotton traders and the quota in hand of cotton spinning enterprises or processing plants can complete a cotton import transaction.

The traders said that the circulation of cotton import quotas in the market was mainly due to the fact that some enterprises that applied to the state for quotas every year did not have substantial cotton textile production and trade, and they did not need to import cotton and sold it again after getting quotas; In addition, some of them falsely reported the production and trade volume, applied for cotton import quotas higher than their own production capacity needs, and then reselled the surplus quotas.

For a long time, some small and medium-sized textile processing enterprises purchase imported cotton through purchasing quotas to ensure production when domestic cotton supply falls short of demand.

China is the country with the largest cotton consumption and import in the world. According to Wang Jianhong, Deputy Secretary General of the China Cotton Association, in 2011/12, China's cotton output was about 7.2 million tons, and the consumption was about 9 million tons. The temporary cotton storage online transaction in 2011 ended on March 31 this year, with 3.125 million tons of cotton actually traded. The cotton storage and collection accounted for 49% of the national cotton output in 2011, and 53% of the domestic ending inventory of 5.95 million tons, All of them have reached a new historical high.

According to the survey, by the end of June, the national commercial inventory of cotton was only 1.73 million tons, of which the mainland commercial inventory was 1.33 million tons. Apart from the port imported cotton, the mainland can supply only a small amount of local cotton.

"The high proportion of the country's purchase and storage has further exacerbated the rise in the price of market circulating cotton." The traders believe that "from the perspective of China's cotton output and total import quota, it is lower than China's cotton consumption."

A new sliding allowance tax quota will be issued after the end of cotton storage in the new season every year. This year's new season of cotton storage will begin in September. In the last two months of this year, the remaining cotton import quota on the market has been consumed little, and the price has been extremely high.

Lost profits

In his opinion, the rising space of quota price is directly determined by the price difference of cotton at home and abroad. "Not to mention that 3800 yuan per ton is the quota price of 4000 yuan. With the low price of 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 cannot get enough cotton import quotas, so they can only use domestic cotton. Traders said that the current cost of purchasing domestic cotton to produce cotton yarn is 24000-25000 yuan per ton of cotton yarn, while the mainstream price of 32S knitting yarn in the market is 24500 yuan/ton, and the mainstream price of 32S high configuration yarn is 26000 yuan/ton, "which must be a loss".

Taking Huafu Sefang (002042. SZ), the world's largest color spinning leader, as an example, the company reported that in the first half of this year, it realized an operating income of 2.792 billion yuan and an operating profit of 4.49 million yuan, respectively 0.84% and 98.44% lower than the previous year.

some spin The chairman of the board of directors of the company said that the customer structure of sales growth was basically stable, and orders were all continuous orders, so there was no significant change throughout the year. The main factor affecting the company's performance was cost.

This year, the entrusted market price of cotton in the new season is 20400 yuan/ton. At the same time, the price of imported cotton in the coastal cotton import port area is less than 15000 yuan/ton.

The direct reflection of its cost pressure is that, affected by the continuous decline of international cotton prices, domestic cotton fell 1000-1500 yuan/ton year-on-year, but still 4000-4500 yuan/ton more expensive than imported cotton.

According to the national standard, the annual production of cotton yarn exceeds 1 million spindles, which requires about 110000 tons of cotton. Therefore, if domestic cotton is ordered in China, the company's cotton cost will float between 110 million yuan and 150 million yuan. In the spot market, the company's cotton cost is 450 million yuan to 550 million yuan more than the production cost of using imported cotton.

Securities analysts said that as yarn products adopt the "cost plus" pricing model, the cost benchmark for export orders in pricing is the lower international cotton price, so the price of yarn orders hovers at a low level; On the other hand, due to the limited cotton import quota issued by the state, domestic textile enterprises mainly use domestic cotton with high prices in production, and the production cost pressure cannot be underestimated.

"Domestic high cost cotton is used to produce cotton yarn that is falling in price internationally, which means that the larger the production volume of enterprises, the more profits will be swallowed up." The trader said, "Therefore, most small and medium-sized enterprises in the industry try to reduce their output, idle capacity and maintain core customers."

And listed companies have to increase production capacity in order to impact annual performance. According to the company's central report, the sales volume in the first half of 2012 increased by 41.31% year on year, but the gross profit margin of sales dropped significantly, leading to a sharp decline in the performance of the first half of 2012. By the second quarter of this year, the gross profit rate of Huafu Sefang had dropped from 19.9% to 12.6%.

Waiting for cotton

According to analysis, Huafu Color Textile is just a microcosm of the industry. In the first half of this year, the loss of the textile industry exceeded 80%, and the degree of pressure and duration of enterprises were far greater than in 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 material are in a loss state; Mixed textile enterprises that use cotton and chemical fiber at the same time are between small losses and small profits; Enterprises that do not use cotton but use chemical fiber are profitable, but their profitability is significantly lower than in previous years.

"Buy cotton at a high price and sell yarn at a low price. This turnover will not last for any enterprise for a year." The trader told the reporter, "Since this year, few enterprises have dared to buy cotton in season. Generally, small and medium-sized enterprises buy cotton in season and use it now. Large enterprises also use cotton in season as little as possible." Therefore, import quotas have become a lifeline for spinning enterprises. This year's quota distribution has been relatively slow, which is a headache for many enterprises who want to get cheap cotton.

"The whole industry is waiting for cotton." Trade Shang said, "In the first half of the year, the gap of idle capacity in the textile industry can only be made up by importing cotton yarn."

Since there is no quota limit on China's cotton yarn import, cotton textile enterprises prefer to import cotton yarn directly from India and Pakistan and then sell it to downstream textile fabric enterprises or garment enterprises.

"There are also many cotton textile enterprises that have to directly transfer their production capacity to Southeast Asian countries to produce spinning yarns and then export them to China, which directly weakens the competitive advantage of domestic textiles," he said.

According to the historical data released by the General Administration of Customs, from January to May this year, the number of cotton yarn exports decreased by 9% year on year, the import of cotton yarn increased by 78% year on year, the import of pure cotton grey cloth increased by 133% year on year, and the export of cotton products decreased by 3.4% year on year.