The Recent Decline In Cotton Prices Will Help Improve The Profitability Of Textile Enterprises

In recent years, domestic cotton spot prices have dropped, and domestic textile enterprises are facing greater operational pressure. The fall in cotton prices is conducive to improving the profitability of textile enterprises.

According to domestic media reports, the spot price of domestic cotton has been decreasing in recent years. As of September 24th, the price of the 3 grade lint settled in a textile enterprise in Hebei province was between 12600-12700 yuan / ton.

The relevant person of the enterprise said that they were not optimistic about the future market. It is estimated that the domestic cotton prices will run between 12000-12300/ tons in the new year. Therefore, the stock of raw materials is being compressed as far as possible.

At present, the textile industry is in a difficult position. The adverse factors such as RMB appreciation, export tax rebate rate and cost rise have brought great pressure to the companies in the industry.

Judging from the 08 year interim results, there have been a number of companies' performance declines. For example, maindda (002034) (002034) is appreciated by the renminbi. The price of dyestuff, auxiliaries and other raw materials and steam, hydropower and other power prices has increased, resulting in a rise in the cost of the company and a decrease in gross profit margin, resulting in a loss of operating profit and net profit in the first half of 08 years.

De cotton shares (002072) (002072) also caused almost 43.70% net profit year-on-year for almost the same reasons.

Xun Xing shares (002098) (002098) achieved net profit of 27 million 335 thousand and 200 yuan, down 16.80% compared to the same period last year.

The recent decline in domestic cotton and cotton prices will help improve the profitability of textile enterprises.

But at the same time, we should also see that it is precisely because of the overall recession of the textile enterprises that the sales of cotton have been reduced, which is unfavorable to cotton prices.

The Ministry of Finance and the State Administration of Taxation issued a notice that the export tax rebate rate of some textiles and garments increased from 11% to 13% since August 1, 2008. Although the policy helps to reduce the cost pressure of textile and garment enterprises, it is difficult to reverse the slowdown in the whole industry and the decline in profits.

According to customs data, China's textile and apparel exports in August amounted to 18 billion 590 million US dollars, up 2.8% over the same period last year.

08 years from January to August, textile and apparel exports totaled 118 billion 900 million US dollars, an increase of 9.1% over the same period last year, an increase of 10.2% over the same period last year.

According to statistics, ICE cotton futures prices fell sharply in September 7th, the main contract in December fell 132 points, the settlement price of 64.28 cents / pounds.

In September 10th, the price of Zheng cotton fell again, and the contract opened at 13260 yuan, closing at 13210 yuan, which was down 170 yuan / ton compared with the previous day's settlement price. In September 23rd, ICE cotton futures prices fell sharply, the main contract in December fell 209 points, and the settlement price was 62.3 cents / 901.

In September 24th, the price of Zheng cotton was low, and the contract opened at 12905 yuan, closing at 12970 yuan, down 110 yuan / ton compared with the previous day's settlement price. In September 25th, the price of ICE cotton futures rose slightly, the main contract rose 31 points in December, and the settlement price was 61.66 cents / 901.

In September 26th, the price of Zheng cotton rose slightly, and the contract opened at 12970 yuan, closing at 13080 yuan, up 110 yuan / ton from the settlement price of the previous trading day in 901.

In short, the domestic textile industry is in severe form. Under the influence of new cotton coming soon, Zhengzhou cotton price will continue to oscillate.

The "2008 national cotton business teleconference" jointly convened by the seven ministries and commissions of the national development and Reform Commission showed that the outstanding contradictions and problems faced by cotton work in the 2008 year were mainly reflected in the tightening of cotton purchase funds. Cotton farmers and cotton enterprises could see each other's stalemate and stalemate in the early stage of the acquisition. The rising cost of cotton planting has raised the cotton farmers' psychological expectations for cotton prices this year.

The meeting clarified the general requirements of cotton work in 2008, namely, to grasp the acquisition of new cotton, ensure the supply of funds, stabilize the cotton market, protect the interests of cotton farmers, strengthen macroeconomic regulation and control, meet the needs of the market, speed up the reform of quality inspection and ensure the quality of cotton.