Import Cotton Price Low No Way Out Domestic Cotton Price High Drag Cotton Enterprises

"It's going to burst." in the morning of March 15th, it had just been done for more than a year. Cotton import Wang Xinghua, a Shandong Binzhou businessman, told reporters on the phone that although the price of imported cotton was 5000 yuan lower than that of domestic cotton, it still could not find the next home.

In March, in the Qingdao bonded port area, a large number of cotton traders were anxious about the imported cotton that was full of warehouses. Wang Xinghua told reporters that the cotton storage in the bonded port area was nearly 100 thousand tons, which has reached the inventory line, and the warehouse is almost full.

Over there, a large number of imported cotton slept in the warehouse of the bonded area. A large number of cotton spinning enterprises here were forced to buy high priced domestic cotton because of the limited import quota. The cost increased sharply, and the bankruptcy and downtime rate of the cotton textile enterprises in Qingdao exceeded 1/3.

"Crazy cotton" is playing a "dead end" this year.

　　 Cotton price inversion New heights

In March 11th, China's cotton price index soared to 19346 yuan / ton, which is the 18 consecutive day of the index's rise this year, rising 1190 yuan per ton compared with the low of last July.

In March 11th, the cotton COT-LOOK international cotton price index was 93.50 cents / pound, equivalent to 12776 yuan / ton. That is to say, cotton prices in the same period were 6570 yuan more than the international cotton price per ton.

The upside down of cotton prices at home and abroad is not new, but the price difference has never been so great. "Although the cotton price has dropped substantially compared with the" crazy cotton "of a price of more than 30 thousand yuan in the previous two years, the difference between domestic and foreign cotton prices has widened. Wang Xinghua said he saw it last year before deciding to do cotton business.

According to China textile industry According to the Federation, in 2011 9~12, the average cotton price at home and abroad was 2410 yuan per ton, but by 2012 1~3, the average cotton price difference at home and abroad rose to 3638 yuan per ton. From the end of August to the beginning of September, domestic cotton price was 18520 yuan / ton, while the price of foreign cotton increased 1% yuan after the tariff and value-added tax was 13060 yuan / ton, and the price difference was 5460 yuan / ton. Compared with previous years, cotton price difference at home and abroad has reached a record high in 2012.

"Over the past decade or so, the domestic and international cotton price differentials have been maintained at 1500 yuan to 2000 yuan per ton." Wang Xinghua told reporters that India and other places to import cotton and cotton yarn, the average price is 20%-30% lower.

What caused the gap between domestic and international cotton prices? Gao Yong, vice president of China Textile Industry Federation, said that in 2010, the domestic cotton price was once as high as 33000 yuan / ton, and the international cotton price also stared at the domestic cotton price. When the domestic cotton price fell from 33000 yuan, the price of cotton flower was lifted, and the state bought a price of 19800 yuan / ton to stabilize the domestic cotton price. But international cotton prices continue to fall, forming a huge gap with China. In order to protect cotton farmers, the government continued to raise the purchase price of cotton to 20400 yuan / ton in second years.

"After that, in order to cope with such a price gap and increase procurement efforts in the international market, the cotton price in the international market has not been brought up. Instead, it has formed huge inventories and high domestic cotton prices, which has brought enormous pressure to the textile industry." Gao Yong said.

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The meaning of 6000 yuan difference

"The foreign enterprises that place orders are usually priced at the international cotton price, but the cotton yarns they produce are produced with higher cost domestic cotton. Zheng Mingmei, Secretary General of Qingdao textile and Garment Association, said that under the condition of continuous cotton price difference at home and abroad, low-end cotton spinning enterprises will inevitably be eliminated. Up to 2012, the highest point of cotton price inversion has reached 6000 yuan, which has undoubtedly become a fuse to the predicament. What does the difference of 6000 yuan mean?

Wang Zhixin, manager of Qingdao Xintian Textile Co., Ltd. said that under normal circumstances, the domestic and international cotton price difference is 2000 yuan per ton, so that the enterprise can remain competitive. The current huge price gap has far exceeded the scope that the enterprise can afford.

Li Hong, general manager of Qingdao Irina Home Textile Co., Ltd. made an account of the media: producing at least 1 tons of cotton yarn, at least 1.15 tons of cotton, the cost of raw materials is 22 thousand yuan, the cost of labor, energy, transportation and finance has increased by 10% over the past. With the consumption of machine materials, the cost of one ton of yarn is no less than 28 thousand yuan. Last year, the market price is about 26 thousand yuan, which means that cotton textile enterprises will lose 2000 yuan for producing 1 ton cotton yarn every year.

Due to insufficient orders, many textile enterprises in Qingdao have reduced production inventories.

According to local media in Qingdao, the bankruptcy and downtime rate of cotton spinning enterprises in Qingdao has exceeded 1/3.

Gao Yong, vice president of the China Textile Industry Federation, said at the news briefing of the beginning of last year that the total industrial output value of 37 thousand Textile Enterprises above Designated Size reached 57810 billion yuan last year, an increase of 12.3% over the same period last year. The total export volume of textile and clothing in the whole society reached 262 billion 560 million dollars, an increase of 3.3% compared with the same period.

"In addition to the negative growth in total exports in 2009, this figure is the lowest in recent years." Gao Yong said. According to the data released by China Textile Federation, the proportion of China's textile industry in the European Union and Japan's import market decreased by 1.8 and 1.1 percentage points respectively from 1 to November last year.

"Rely solely on Textile enterprises Self adjustment is very difficult to completely resolve the impact of the spread. Gao Yong said.

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　 Difficult knot

"Cotton price upside down is not only the upstream and downstream links of cotton spinning, but also has a deeper crisis." Wang Xinghua said.

Because there are no quota restrictions on cotton yarn imports, many enterprises simply choose to import cotton yarns directly from India and Pakistan. Because the cost of manpower and raw materials is low, the price of imported cotton yarn is even cheaper than that of domestic cotton. In order to survive, some cotton spinning enterprises even sell imported cotton yarn to downstream textile enterprises or clothing enterprises.

"The production of cotton yarn is not as good as selling cotton yarn, but the frustration of some enterprises will lead to a more chaotic market." Wang Xinghua thinks this is a difficult knot. The price advantage of imported cotton is obvious, but due to the "high threshold" of the 1% tariff quota approval, the number of quasi tax quota issuance is uncertain.

"In order to solve the predicament of domestic and international cotton prices hanging upside down to enterprises, I know that the policy of the government departments is to throw away the reserves and to throw 3 million tons at the price of 19000 yuan / ton. In fact, the price of such dumping is actually subsidised by the government, and how much depends on the government's affordability in the future." Gao Yong said.

Reporters noted that some time ago, the country began throwing cotton reserves. From all aspects of reaction, dumping and storage transactions are slack, and some small cotton textile enterprises are afraid to earn national cotton reserves in the face of shortage of raw materials. In the final analysis, this is due to the inverted cotton price.

According to the insiders, China should change its cotton circulation system. The production and circulation of cotton should be marketization instead of regulation by import and export quotas. The situation is somewhat distorted.

"(cotton purchase and storage) means that the state will pay no less than 170 billion yuan for the collection and storage of funds, plus huge storage costs, various management and operating costs, which is undoubtedly a test of the financial capacity of the state." Tan Yanwen, vice chairman of the cotton industry and economic academic committee of China Cotton Association and professor of South China Agricultural University, said.

According to industry analysis, if the cotton purchase is still in accordance with the way of last year, the state will face the situation of no storage cotton in 2013.