Spinning Enterprises Out Of "High And Low Cotton Price Difference" Dilemma

A few days ago, Liu Xiaonan, deputy director of the economic and Trade Department of the NDRC, said that after the implementation of the target price reform, the linkage between the domestic and foreign cotton market will be strengthened, and the price gap between the domestic and foreign markets will be reduced to a reasonable level. This will play a significant role in improving the market competitiveness of our cotton textile enterprises, especially the export oriented enterprises, which will be in a relatively fair and reasonable market competition environment.

However, from the point of view of cotton textile enterprises, the introduction of the new deal did not make cotton textile enterprises happy immediately. On the contrary, some enterprises believe that now is the most difficult time.

The industry also said that at present, there is no good showing for the industry, especially since the NDRC said it would no longer increase the import quota of sliding tax, making some cotton spinning enterprises producing high count yarn panic.

This is a difficult time.

cotton

The most important influence is the marketization of domestic cotton prices, linking them with the international cotton prices and reducing the cost of cotton production in cotton textile enterprises. This is the result that cotton textile enterprises have been expecting.

However, with the introduction of the new deal, the price of new cotton has dropped, which has brought a lot of pressure to cotton textile enterprises.

Tang Qiyi, assistant general manager of Wuxi cotton general, said that the new cotton picking and listing will form a big price difference with the spot price. The inventory of the enterprises and the cotton yarn will be devalued in the later stage. That is to say, the production side will lose money and the enterprises will face great pressure of production.

The industry believes that the new policy is good for cotton textile enterprises in the long run, but it may go through a longer digestion period.

According to Wu Faxin, general manager of Greater China, Guangzhou import and Export Trading Co., Ltd., recently, in Jiangsu, Zhejiang, Guangdong, Fujian and other traditional cotton textile base, there are constantly news of the textile enterprise boss running away.

He said that with the implementation of the new cotton policy in 2014, it is expected that this situation will continue.

Wang Huanlong, chairman of Zhejiang Tian Chang Textile Co., Ltd. also believes that the winter of textile industry has just started.

A cotton textile manufacturer in Shaoxing has learned that this year the country will release the price of cotton, and began to turn from the production of 100% cotton products to polyester products. Now polyester products account for half of the country.

"The cost price risk for cotton spinning enterprises, especially cotton intermediate products, will be increased if they are liberalized."

The company official said that the demand market has the habit of "buying up, not buying down". The product structure adjustment is aimed at dealing with the downward pressure of the cotton price.

According to the disclosure, the company currently uses about 10 tons of cotton yarn per day, but the procurement method has changed from the medium to long term to the required volume, and is very cautious.

Liu Ming, chairman of Shandong Hongcheng group, said that the labor pains brought by policy adjustment were more violent than imagined. But in order to realize the marketization of cotton prices, this must be experienced, because cotton prices at home and abroad are connected, and domestic cotton prices will have to decline, so that China's cotton textile enterprises can compete fairly with foreign cotton textile enterprises.

Now, it is important for companies to survive this painful period.

It will take time to get better.

At present,

The cotton of the production and Construction Corps has not yet been picked up in large quantities.

Because most of the Corps's cotton must be picked by machine, the machine can not start mining until more than 95% of the flowers are mature and the cotton leaves fall. It is expected that a large amount of production will take place in early October.

According to the insiders, when the price of new cotton is stable, it will take at least one month to produce new cotton.

In addition, the implementation plan for the pilot project of cotton target price reform in Xinjiang stipulates that this year's cotton inspection will be carried out in the "public inspection of warehousing", which will delay another 10 days or so. The time for processing well lint to the cotton textile mill in the coastal area is estimated to be delayed until the end of 11.

Tang Qiyi, assistant general manager of Wuxi cotton general, believes that enterprises will get better until at least after the new year.

He said that the downstream cotton mills had thought that the state would not interfere with the market, and could directly purchase cotton raw materials in the cotton producing area according to the requirements of their orders and product lines. However, a policy of "warehousing and public inspection" on the way had made many changes in cotton trade.

Some enterprises believe that the "warehousing inspection" will delay the time for new cotton production and increase the cost of 300 yuan ~400 yuan / ton.

A person in charge of a color textile enterprise said that because the processing plants were centralized production at the same time period, after the "warehousing inspection", the cotton processing plant produced cotton bags and sent them to the supervised warehouse, so that at a certain time, cotton processing plants had to queue up for storage, queue up for inspection, and then queue up for storage, which would delay the time of cotton to cotton mills.

Most cotton textile enterprises say that in the long run, the new policy is conducive to further promoting market fairness.

The responsible person of Bai Jiahui textile limited liability company said that because of the government's early release of the target price reform signal this year, many downstream enterprises have already sniffed the business opportunities that the upstream cotton yarn prices may be reduced, and have made phone calls to subscribe products. Some downstream businesses have ordered 100 tons of cotton yarn at once.

The official said that the implementation of the direct subsidy policy has really brought the cotton price to the market, and the cotton textile enterprises will get out of the dilemma of "high and low cotton prices" sooner or later.

A few days ago, Liu Xiaonan, the NDRC, made it clear that next year, in addition to issuing 894 thousand tons of cotton import quota promised by WTO, meeting the demand of textile and cotton blending, the import quota will not be increased, and the domestic textile enterprises will be guided to use more domestic cotton.

This news, a new round of worries for cotton textile enterprises.

According to the terms of agreement in China's accession to the world trade organization, China implements quota management system for cotton imports.

Import quotas can be divided into two categories, one is tariff quotas and the other is quotas outside tariffs.

The total tariff quota is 894 thousand tons, the tax rate is 1%, the tariff quota quota system is implemented, the lower the import price is, the higher the tariff is.

Due to the high domestic cotton prices in recent years, the demand for foreign cotton in textile enterprises is large, and the quantity of cotton imports in China is huge.

However, the quota of imported cotton is no longer issued, and only 894 thousand tons of high-quality imported cotton can be imported. Therefore, domestic cotton textile enterprises will produce a huge gap of high-quality cotton, and domestic cotton textile enterprises, especially high-grade high count yarn and bleached yarn production, will "cut grain".

According to the analysis of the industry, the state only issued 894 thousand tons of tariff import quotas to digest huge cotton stocks.

After years of storage, the Treasury already has the world's largest cotton reserves.

At present, the storage capacity of national cotton reserves exceeds 10 million tons, and the inventory pressure is very large. Restricting imports can make domestic textile enterprises use more domestic cotton.

However, some enterprises expressed great concern about restricting cotton imports: at present, the price of foreign cotton is only about 11000 yuan / ton, and domestic cotton prices are still very high compared with that of other countries, and the quality of domestic cotton is poor.

The cotton stored by the State Cotton in successive years is 1 years ago, 2 years ago, or even 3 years ago. The quality of cotton is greatly reduced, and it is difficult to meet the needs of domestic textile mills.

After tightening import, domestic high count yarn production may be blocked.