40% Cotton Textile Enterprises Loss Of Cotton Purchase And Storage Policy Controversial

"High price storage is actually protecting backward production mode."

Yesterday (September 24th) came to Chengdu to participate in the thirteenth China Western International Expo, China's textile industry pformation and upgrading Summit Forum in China.

Xu Wenying, vice president of the Federation of industry and honorary president of China Cotton Textile Industry Association, said in an interview with reporters.

Xu Wenying said that the cotton purchase and storage policy can stabilize cotton prices and protect cotton farmers' enthusiasm for planting cotton. The starting point is good, but this year the situation is different. At present, domestic cotton prices are far higher than international cotton prices, and the domestic cotton textile enterprises have lost competitiveness by purchasing and storing policies.

Xu Wenying suggested that the state could make direct subsidy to cotton farmers, just like grain subsidy.

In September 10th, the national development and Reform Commission announced that according to the relevant provisions of the 2012 cotton temporary storage and storage plan, the China cotton storage company launched the temporary storage and storage of cotton in 2012 in September 10th, and the provisional storage price was set at 20400 yuan / ton, an increase of 600 yuan / ton over the previous year.

The national development and Reform Commission said that the new cotton has begun to appear on the market. The timely start up of cotton temporary storage and storage will help further stabilize the market expectations, protect the interests of cotton farmers and promote the smooth operation of the domestic cotton market.

40% loss of cotton textile enterprises

"At present, cotton textile enterprises are facing a serious problem."

Xu Wenying said.

Data from the Ministry of industry in the first half year report of China's industrial economic operation released in 2012 earlier this month showed that since 2012, due to the weakening of the international market demand, the slowdown in domestic market demand, and the excessive cotton price difference at home and abroad, the operation of China's textile industry has shown a downward trend, the growth rate of production has obviously declined, the export volume has decreased, and the efficiency of enterprises has declined, and the loss of the front of the industrial chain (cotton spinning and chemical fiber) has increased.

In 1-7 months, the total textile output value of textile enterprises above Designated Size reached 3 trillion and 150 billion yuan, an increase of 10.9% over the same period last year, and the growth rate dropped 18.8 percentage points year-on-year.

Domestic sales growth slowed down significantly.

In 1-7 months, the retail sales of clothing, shoes and hats and needle textiles increased by 17% compared with the same period last year, which is 7.2 percentage points lower than that of the same period last year.

Exports grew negative year-on-year.

In 1-7 months, the total profit of textile enterprises above Designated Size amounted to 132 billion 300 million yuan, down 1% compared with the same period last year, and the loss of enterprises reached 17.7%.

The cotton mill of China Cotton Textile Association has seen a loss of 40% of its textile products, and less than 30 thousand spindles of spinning enterprises have cut production and production close to 50%.

In addition, because of the decline in international market prices, many textile exports "increase in volume does not increase", it is very difficult to maintain export growth.

"The outstanding problems currently affecting the operation of the textile industry are insufficient market demand, continuous expansion of domestic and foreign cotton prices, intensified competition in the international market, and high financing costs."

According to the report of the Ministry of industry and commerce, the current cotton problem is attracting much attention.

Since the fourth quarter of last year, the difference between cotton prices at home and abroad has been widening. By July 19th this year, cotton prices at home and abroad were about 4100 yuan / ton.

The increasing price difference between domestic and foreign cotton has seriously weakened the international competitiveness of China's textile industry.

According to the US Department of commerce data, cotton imports from the United States dropped by 1.4% over the same period last month, while cotton imports from India and Vietnam increased by 20.5% and 23.4% respectively over the 1-6 months.

People who participated in the Summit Forum on the pformation and upgrading of the textile industry in Western China yesterday confessed to reporters that they were in a difficult situation.

Cotton purchase and storage policy controversial

The central storage cotton company started the temporary storage and purchase of cotton in 2012 (September 2012 -2013 August) in September 10th.

According to sources from the national development and Reform Commission, 2011

3 million 120 thousand tons of cotton have promoted cotton price recovery and stable operation of the market, effectively protecting the interests of cotton farmers and achieving the expected policy objectives.

The 2012 year is the second year implementation of the policy of temporary purchase and storage of cotton.

The purpose of this policy is to normalize the measures of temporarily collecting and storing lint in the main producing areas, to release the reserve price ahead of time, and to open up and store the stocks after the new cotton is listed. The cotton stored and stored can be put in time when the market needs, so as to stabilize the cotton production, operators and cotton enterprises' market preview, protect the cotton farmers' interests and ensure the market supply.

In Xu Wenying's view, the difference between domestic and foreign cotton prices is getting bigger and bigger. High price storage and storage seriously affects the international competitiveness of domestic cotton spinning enterprises, and affects the healthy development of the entire cotton textile enterprises.

{page_break}

"The current purchase and storage price is reasonable, too low for farmers to grow."

Wang Yong, senior analyst of Hongyuan futures cotton, said in an interview with the daily economic news yesterday afternoon that the main reason for the existence of such a high price difference between domestic and foreign cotton lies in the implementation of the quota system for cotton imports at the same time.

The quota system plays an important role in controlling the excessive impact of Chinese cotton on foreign cotton and protecting the interests of cotton farmers.

The existence of the difference between inside and outside cotton makes China's many export oriented textile enterprises at the disadvantage of raw material cost in international competition.

Wang Yong believes that the difference between domestic and foreign cotton prices has an impact on textile enterprises, but it is not the most important factor causing their difficulties, and the temporary purchase and storage policy is focused on the long term. Under current conditions, I am afraid there is no better policy to replace the purchasing and storage policy.

"We should recognize the good effect of the national reserve. The fluctuation of cotton within 5% during the start of the national reservoir is a good indication that the difference between domestic and foreign cotton prices is not the original intention of the national reserve. The root cause of the poor cotton price is the global economic downturn."

Sun Liwu, an analyst with Zhuo Chuang information cotton industry, told reporters yesterday afternoon.

Sun Liwu said that the policy of State purchasing and storage is to stabilize the cotton market and protect the interests of cotton farmers, but it is impossible to buy and store them all the time. This will lead to the benign development of the industrial chain.

Wang Yong said that the best way to subsidize is to raise the price of seed cotton, and the effect of direct subsidy is not as good as collecting and storing in terms of operation.

Reporters noted that in the Western China textile industry pformation and upgrading Summit Forum, "pformation and upgrading" has become the hottest topic.

At this meeting, such as Yibin Silie group eliminated backward production capacity, construction of an annual output of 100 thousand tons of viscose staple fiber industrial upgrading cooperation projects and other industrial upgrading projects have been signed.

Sun Liwu believed that

In the face of difficulties, enterprises should make greater efforts to reform themselves, and adjust them from various aspects such as cost, technology, brand, raw material structure adjustment and pformation.