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    The Price Of Cotton Is Upside Down, And The Textile Industry Is Struggling.

    2015/2/4 13:31:00 17

    Cotton PricesTextile IndustryPrice Policy

    Cotton prices fell, not only the cotton farmers, but also the cotton industry.

    industry chain

    They are "implicated".

    Since 2011, in order to protect the interests of cotton farmers, the state has implemented a temporary cotton purchase and storage policy to ensure the price and sale of cotton.

    However, in recent years, with the continuous decline of cotton prices in the international market, the downturn in domestic textile industry, the lack of market demand, the number of State purchasing and storage and the sharp increase in inventories, this year, the state has cancelled the policy of temporary purchasing and storage and implemented the target price policy.

    Cotton growers are reluctant to sell, they are not selling cotton, and buying companies do not buy and wait for the cotton market. This year's new cotton purchase seems to have entered a stalemate of acquisition, and the current stalemate in acquisition is directly reflected in the "upside down" of cotton prices.

    Takeovers are reluctant to buy.

    "Cotton production has been seriously reduced this year", which is the overall situation of cotton production in China this year. "Cotton prices fell the most this year", which is also the situation of the national cotton market this year.

    This reporter learned from various sources that this year the state abolished the cotton purchase and storage policy for the first time, and took the lead in implementing the target price reform pilot policy in Xinjiang. However, the new policy has not yet been implemented in other regions, and the market price of cotton is currently only 3.5 yuan per kilogram, which is the lowest price in recent years.

    The policy uncertainty has led to many cotton purchasing stations, processing enterprises dare not rush to cotton, this is the current situation of cotton purchasing market.

    Cotton prices are low. Cotton farmers believe that the market price is not up to their expected price at present. Only when the price is right can they not lose money. However, the processing enterprises believe that the downstream cotton textile enterprises must enter the international market competition, and the domestic cotton price must be basically in line with the international cotton price, otherwise they will process cotton, and the textile enterprises will not buy it.

    Cheng Guoqiang, a researcher at the State Council Development Research Center, said that under the background of oversupply of international cotton market, high cost of domestic cotton and high national cotton reserves, China implemented the new cotton policy, hoping to promote the long-term downturn of the cotton industry to upgrade, improve the quality of domestic cotton, reduce domestic and foreign cotton prices, and increase domestic prices.

    Textile enterprises

    International competitiveness.

    It is reported that the risk of low cotton prices for cotton textile industry is whether the prices of cotton and cotton products of related enterprises are "resilient".

    Affected by the decline in raw material prices, downstream textile prices are also partly under pressure.

    At the same time, cotton price trend is unknown, such as continuous downward exploration, may also have a certain impact on the sales of cotton textile industry market.

    The sharp decline in cotton prices has led to cautious orders for downstream cotton textile producers, and a steady cotton price will be conducive to order recovery.

    This year, the state abolished the temporary cotton purchase and storage policy, and implemented the target price policy. However, the new policy has not yet been promulgated. Cotton farmers have difficulty in selling cotton, and the processing and purchasing enterprises are afraid to rush to buy, which directly affects cotton growers' enthusiasm for cotton planting next year.

    Industry analysts believe that according to the current market trend, cotton prices are hard to pick up, which will definitely affect cotton growers' willingness to grow in the coming year.

    At present, "selling cotton is difficult" continues, processing enterprises wait and see cautiously, cotton farmers wait and see, and textile enterprises reduce stock. Until the end of the year, when farmers have to sell cotton in large quantities, cotton market disorder is likely to happen.

    Textile enterprises complain, difficult pformation in the doldrums

    The fluctuation of textile raw material prices is a test of the cost risk control ability of enterprises. This is already an old problem in the textile industry. It has not been well solved over the years.

    The decline of cotton prices this year is supposed to be a good thing for textile enterprises, because the reduction of raw materials means the direct reduction of procurement costs and the increase of profits. But is this the case?

    "This year is the most difficult year for the textile industry," said Deng Jun (a pseudonym), the head of a small garment processing factory in Hunan. "This year is the most difficult year for the textile industry. Most textile and garment enterprises are experiencing unprecedented survival crisis and development pressure because of the sluggish market, difficult export, rising costs, and the difference in cotton prices between inside and outside."

    "You see how many companies are in normal operation now, and when they are in financial crisis, they do not feel so difficult. Now they just lose money when they start."

    Deng Jun said.

    Deng Jun told this reporter, "especially private small and medium-sized."

    Textile and garment production enterprises

    Only purchasing raw cotton is a major expenditure, coupled with rising labor costs year by year, and then facing labor shortage, which is a difficult step for the traditional labor intensive industry's textile industry.

    Deng Jun calculates to reporters: cotton prices at home and abroad are seriously upside down, the current price difference reaches 2500 yuan to 3000 yuan per ton, and high value-added tax is deducted, resulting in heavier tax burden on enterprises and rising labor costs.

    "These are the main reasons for the survival difficulties of cotton spinning enterprises.

    Cotton prices are low this year, but we can't buy raw cotton, so we can't buy cotton farmers' houses next to each other.

    The industry believes that this year's cotton textile industry situation is still difficult to make a big improvement. At present, some enterprises are going bankrupt and bankrupt. This year cotton textile industry is integrated, eliminated or trend.

    The cost risk control ability of enterprises has not been overall and substantially improved in the past ten years after joining the WTO. The future development of the textile industry will still face this old pain.

    "Cotton stocks are few and orders are few. We are not worried about whether we can save cotton or cotton.

    But because the state reserves and supplies are abundant, most of the textile enterprises are mainly cotton and cotton, and insist on buying with them.

    Deng Jun said.

    The cost advantage of China's textile industry in international competition is basically gone.

    According to the relevant statistics, in recent years, the cost of production factors in China's textile industry has continuously increased, and the per capita wages have increased at an annual rate of over 10%. The wage level is much higher than that of the developing neighbouring countries, and cotton prices have continued to be higher than 30% of the international market in the past three years.

    In order to fight for orders in fierce competition, many textile and garment enterprises have shifted their manufacturing base to Southeast Asia where production costs are lower.

    Wang Tiankai, President of the China Federation of textile industry, has publicly stated that the constraints on China's textile raw materials are becoming increasingly apparent, and the supply of high-quality cotton is seriously inadequate. Cotton prices have been higher than 30% of the international market for three consecutive years, and the development and application of chemical fibers are inadequate, and the processing technology of recycled fibers and the development of recycling channels are lagging behind.

    In addition, the situation of energy saving and emission reduction is grim, and the industrial layout and resources and environmental carrying capacity are not in harmony, leading to the development of China's textile industry since 2011.


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