Cotton Price Reform Let Cotton Enterprises Suffer From Labor Pains

This year, the national cotton temporary purchase and storage policy has been abolished.

Realizing marketization.

However, with the implementation of China's cotton target price reform, the whole cotton industry chain has gone through an unprecedented predicament.

Especially for cotton processing enterprises, because of the cancellation of the policy of "iron rice bowl", the enterprises need to face the difficulties of market and operation again.

Processing from planting to spinning is an essential step in the processing of ginning plants. However, the state's temporary purchase and storage policy for 3 consecutive years has led many cotton processing enterprises to adapt to the objective benefits and convenience brought by the storage and storage, so that the cotton purchasing enterprises concentrate their efforts on the storage and storage, and give up the maintenance of the relationship between the downstream customers.

The implementation of the cotton target price reform policy will bring cotton enterprises back to the market and operate in a completely market-oriented way. The primary problem facing them is the sale of lint.

In addition, this year is the first year of the implementation of the target price reform. The progress of picking and selling cotton farmers in Xinjiang and the mainland is relatively slow. The decline in cotton prices has kept the textile enterprises on the sidelines, and the shortage of market demand has brought great pressure to cotton business. Especially in recent years, cotton enterprises generally reflect the state of losing money when they are working.

But risks are accompanied by more opportunities.

The industry believes that the state can not keep collecting and storing, cotton processing enterprises in the face of market competition is sooner or later, only to provide high-quality cotton, provide better services, in order to stand out in the market competition.

Slow progress in overall acquisition

Because of the late Cotton Subsidy Policy, cotton picking and acquisition has been relatively slow this year, whether in Xinjiang or in the mainland.

Especially in the cotton area of the mainland, due to the delay in the cotton subsidy policy, the price of the cotton market has dropped considerably, and the cotton farmers' reluctance to sell is very strong.

Hebei Hong Feng Cotton Industry Co., Ltd. received about 10000000 kilograms of cotton last year. It only received 12 million kilograms this year to mid October.

The company responsible person said, although the purchase price fluctuated, but the market is not strong, enterprises have been losing money in the acquisition.

This year, the cotton planting area itself has been reduced. Now cotton growers are drying their cotton and hoarding at home.

At present, this is also happening in many parts of the mainland, and the slow acquisition of cotton in Shandong and Jiangsu has slowed down.

According to reports, as of the end of November, 47 cotton type 400 cotton processing enterprises in Dezhou city of Shandong province processed 39 thousand and 200 tons of lint, which is 56% of the same period last year.

Although the quality of local cotton is obviously better than that of previous years, the price of seed cotton has fallen below 6 yuan / kg due to the continuous decline in cotton prices in recent years. Cotton farmers are reluctant to sell prices. Cotton enterprises are afraid to lose money. Some enterprises have stopped collecting, and cotton market is almost stagnant.

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Direct subsidy policy was introduced earlier than the mainland, but due to weather reasons, cotton picking in Xinjiang was generally postponed for 10~15 days this year. Until now, many cotton fields still have not picked cotton.

North Xinjiang hand picked cotton 3128 platform offer 13600 yuan ~13800 yuan / ton, machine picked cotton 3128 level quote 13000 yuan ~13300 yuan / ton.

Because cotton prices are at a low level, the two level differentiation of ginning plants is serious. One is the positive pfer of sales to the mainland, the price negotiation is quite large, while the other type of ginning plants do not recognize the current cotton price, and stop waiting for sale.

Cotton prices fall serious losses

Policy uncertainty and price continue to decline, most of the mainland cotton merchants are facing the embarrassment of "buying tomorrow may be lost", so that cotton pickup this year cotton enterprises do not want to scale up acquisitions.

Shandong Dongying Lijin Xintong cotton factory official said, from last September to March this year, the total processing of 3600 tons of lint cotton, earn 800 yuan per ton, a total of 2 million 880 thousand yuan, excluding interest, labor, electricity and other expenses, net profit 2 million yuan.

But now, corporate acquisitions are very prudent because cotton prices continue to fall, and they may lose money if they buy.

Because of the estimated cotton purchase situation this year, most of the 400 cotton enterprises in Hubei started to weigh late and set prices prudently.

A local cotton enterprise official said that he did not want to make money, so that he could make ends meet.

However, small processing plants sniffed this year's opportunity to enter the market, and earlier priced blindly for the expansion of the purchase price. The price was often higher than that of Dachang 0.2~0.3 yuan / kg, and many cotton growers were actively selling it. But as the lint price went down all the way, the cost of small lint cotton appeared hanging upside down. Now the stock pressure is strong. Many small factories have lost about 700 yuan ~800 yuan / ton.

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Recently, seed cotton acquisitions and lint sales in Nanyang, Henan also showed a downward trend. Due to the delay in the Cotton Subsidy regulations in the province, the price of spot and futures markets continued to decline, and the acquisition of seed cotton purchasing enterprises increased the risk. Cotton enterprises had to cut down the purchase price of seed cotton to prevent the unfavorable factors resulting from the low sale price of lint cotton and the sluggish sales of the market. Even so, most cotton enterprises showed that the sale of the cotton seed sold at current prices was basically guaranteed or slightly damaged.

Compared with the cotton processing enterprises in the mainland, cotton enterprises in Xinjiang also face difficulties along with the closing of cotton picking and the falling prices of cotton.

A ginning factory in Akesu, Xinjiang, said that as of the end of November, a total of 5500 tons of seed cotton had been purchased this year, with an average price of 41% and an average price of 6.43 yuan / kg. According to the current price of lint and cottonseed (processing fee of 800 yuan / ton), the cost of lint production has been higher than the market price. If the cost of financial cost and machine depreciation is included, the loss of a ton of lint is more than 500 yuan.

A cotton enterprise employee in Manasi County, Northern Xinjiang, said that in 2014, the factory acquired more than 8000 tons of seed cotton, basically processed and sold out. Now the employees in the factory have been on holiday, leaving only a few staff on duty.

Because of the strategy of "quick acquisition, quick processing and quick sale", the cotton market, which has experienced a drop and fall, is better than other companies.

It is understood that at present, most cotton enterprises in Manasi County stop collecting and receiving holidays mainly because the local cotton farmers have basically sold out, cotton enterprises have no flowers to accept, the current seed cotton prices are not ideal, the decline is more than, cotton enterprises purchase and processing risks are great, and after entering December, even if there are individual cotton farmers selling seed cotton, later quality of flowers is poor, and the lint cotton produced is likely to be unsalable, so most enterprises choose to stop working and take holidays to avoid risks.

Market competition is good in the long run.

When the state stores and stores, because the target price has been determined, cotton processing enterprises only push down the price of seed cotton in accordance with the state's cotton purchase and storage price, and purchase a certain profit space according to the price previously issued, so that the quality of acquisition and processing can be well controlled.

On the one hand, the price of lint cotton is determined by the market, and the price of seed cotton is difficult to be determined without the target price of the national storage and the price guidance of the downstream customers.

Because cotton farmers have adapted to the price of national storage, if the seed cotton price is low, cotton farmers are unwilling to sell, seed cotton pricing is high, lint sales will not go out and face losses, and the market risk of cotton enterprises will increase.

In addition, in recent years, in order to meet the standards of storage and storage and meet the new grade inspection standards, 400 type processing enterprises with the qualification of storage and storage have updated and added some new equipment. With the increase of production capacity and quality, the cost of lint processing has also increased.

After the cancellation of the storage and purchase, the 200 type processing enterprises without the qualification of storage will seize some market because of low processing cost, and the market competition will further intensify.

But risks are accompanied by more opportunities.

According to the insiders, the market competition between cotton enterprises is not necessarily a good thing, and the state can not always keep it in storage. Cotton processing enterprises are faced with this kind of market competition sooner or later. Only by providing high quality cotton and providing better services can they stand out in the market competition.

And for the current cotton enterprises widespread loss problems, professionals said that the current loss of cotton enterprises is only temporary. In the long run, it is favorable for the development of the cotton industry. Especially after the implementation of the new deal, the competition in the cotton market will become more intense. Cotton processing enterprises will have "Eight Immortals crossing the sea" and pay more attention to building the cotton brand and ensuring the quality of cotton so as not to be eliminated by market competition.

Xiao Yuqing, the general manager of Xinjiang Cotton Industry Group Co., Ltd., said that under the cotton direct subsidy policy, the cotton circulation enterprise will be both opportunity and challenge, and the opportunity is greater than the challenge.

In the severe market situation, cotton quality is the lifeline of cotton circulation enterprises. This year, the enterprise strengthens the quality control and management of the whole process of cotton acquisition, processing and sales, and optimizes the process management of acquisition, processing and so on, and achieves good results in the market competition.

A cotton enterprise official said: "after the abolition of the cotton purchase and storage, who will have more customers and who will be more competitive?"