Exclusive Interview With Li Xushuang: The Cotton Industry Is Still Full Of Confidence.

Recently, the reporter interviewed Mr. Li Xushuang, chairman of Hubei Baiyin cotton industry. He said that although the cotton planting area in Hubei province has dropped significantly this year, the ginning factory has seen no benefit from the acquisition. The ginning plant involved in the purchase has been reduced by about 40% compared with last year, and some small factories have changed, but the silver and cotton industry has insisted on the acquisition in the case of reduced resources.

At the beginning of 2015/16, we were constantly exposed to a lot of negative news: Xinjiang's weather was not good, the quality and output of the whole country decreased, the price of seed cotton dropped again, cotton growers became busy in a year, and the number of closed down cotton enterprises increased.

After another price cut, spinning enterprises are struggling to ensure production.

In front of the full negative energy, there is still a new way for enterprises to survive. Why do they not give up the cotton business? What secrets do they have to "cure" the shortcomings of reality? Recently, the reporter interviewed the director of Limited by Share Ltd of Hubei Baiyin cotton group (hereinafter referred to as "Hubei Baiyin cotton industry").

Sir, from his answer, the reporter once again felt the warmth and boundless positive energy of cotton.

Reporter: how about the purchase of seed cotton in Hubei silver cotton industry this year? What is the comparison with last year?

Mr. Li Xushuang: this year, Hubei Baiyin has 2 400 type ginning plants in Zhijiang to take part in the acquisition. Originally we planned to make a processing in the Xinjiang packing plant, but after investigation, we found that the risk in Xinjiang this year is still very large. Although the price of the bag factory has dropped a lot, considering the factors such as the purchase price, quality and internal cost of Xinjiang seed cotton this year, we have abandoned the package factory plan.

Now, the purchase volume of the 2 factories is 5000-6000 Jin Jin, which was about 10 thousand tons in the same period last year, and the purchase volume dropped by 50%.

At present, the acquisition is mainly medium term flower, the quality is better than last year. In addition, according to our research, this year, Hubei peach top peach, peach bell weight and maturity are good. The quality of this year's tail flower should also be good.

At present, the purchase price of white cotton grade 3 seed cotton is about 3.05 yuan / Jin, compared with 3.2 yuan / Jin last year, and the price has dropped slightly.

The biggest difficulty in the acquisition process is the capital problem. Commercial loans, processing fees and financial costs can not be avoided.

In addition,

It can't go up, but this situation is better than in previous years.

Cotton farmers are basically reluctant to sell their spirits. Now cotton farmers will understand the market situation through many ways, and understand that seed cotton prices are hard to rise.

Reporter: how is the sale of lint sales in Hubei silver cotton industry this year?

Mr. Li Xushuang: the quality of lint made this year is good. The color grade is mainly 12 and 31. The sales are smooth and no inventory is better than in previous years.

It is mainly exported to cities and towns around Zhejiang, Jiangsu and Hubei, with old customers as well as new customers.

Customers buy Cotton basically requires more than 28mm length, horse value B2, grade 12 or more.

Now our quotation is the paction price, basically not negotiable price, the 3128B class sale price is 12700 yuan / ton.

Reporter: what breakthroughs and innovations have been made in the operation of Hubei's silver cotton industry? Will it reduce the share of cotton processing?

Mr. Li Xushuang: since last year, the Hubei Baiyin cotton industry began to buy wheat, corn and other crops, and built 3 drying towers and 4 grain warehouses, of which the construction cost of grain warehouses was 1000-2000 yuan / square, higher than that of cotton warehouses.

After the plan, grain crops and other grain crops will be acquired. These crops are mainly protected by price and benefit is better.

For us, it does not necessarily reduce the share of cotton processing.

This year, when we visited the farmers, we learned that the price of corn and wheat is relatively low this year, while the cotton price is lower than that of last year. However, the highest yield per unit area can reach 700 Jin / mu, and the average yield per unit can reach 600 Jin / mu, which is higher than the average yield of 450 Jin / mu and the average yield of 500 Jin / mu in the normal year last year. Besides, this year, cotton pests and diseases in Zhijiang area have been significantly reduced, and cotton farmers have saved the cost of medicine.

On the basis of comprehensive consideration, many farmers in Zhijiang will continue to grow cotton next year. It is estimated that cotton planting will increase by 20% on the basis of a decrease of 60% this year. The increase is mainly due to the fact that the peasants have their own labor force in their homes or the couple who are in the household farm, and the 40% peasants who have not picked up are the cash crops that are time-saving, labor-saving and mechanized.

Despite the sharp drop in cotton planting area in Hubei province this year, the ginning factory saw no benefit from the acquisition. The number of flower ginning plants involved in the acquisition decreased by 40% compared with last year, and some small factories changed, but the silver cotton industry insisted on acquisitions in the case of reduced resources.

This year, Hubei's acquisition of the market has not seen a rush in previous years. It can be said that the situation of acquisitions and sales is much better than in previous years.

Based on the survey of Zhijiang area and the acquisition situation this year, we still have confidence in the cotton industry.

Reporter: up to now, the Cotton Subsidy Policy in the mainland has not yet been promulgated. Does this affect the cotton farmers' sale?

Mr. Li Xushuang: last year, Cotton Subsidy in Zhijiang area was released in April. The subsidy amount is 150 yuan per mu.

Although the mainland's Cotton Subsidy Policy has not been introduced this year, there were documents published last year: "the Cotton Subsidy in the mainland ranges from 9 provinces in Shandong, Hubei, Hunan, Hebei, Jiangsu, Anhui, Henan, Jiangxi and Gansu. The subsidy standard in 2014 is 2000 yuan / ton, and the subsidy standard in the following year is based on 60% of the subsidy for Xinjiang, and the ceiling is not more than 2000 yuan / ton."

In the case of Xinjiang, the subsidy amount for the mainland should be 2000 yuan / ton this year.

If the policy changes, the state will issue relevant documents ahead of time, so the local cotton farmers are not particularly concerned about the cancellation of subsidies, and think that subsidies are only a matter of time.

Reporter: Recently, there is a problem in the market speculation of cotton reserves. If the reserve cotton turns out, will it affect the spot sales of the enterprises? Will it participate in bidding?

Mr. Li Xushuang: we have been paying attention to the price of the reserve cotton wheel.

In the 7-8 month of this year, the demand for auction companies was released, and the circulation enterprises could participate in the auction.

Therefore, once the price and quality of the cotton reserves meet the requirements, we will consider participating in the auction.

If the price of the cotton is again round or about 7 or 8, the impact on the spot market will be greatly reduced. If the price is lower than the spot price, then the spot price will be close to the price.

But we are not worried about the low price of the wheels. The most important thing is that the impact on the spot market depends on the quality of the reserve cotton. If the high quality Xinjiang cotton and the imported cotton are delivered, then the buyers will be attractive.

For Hubei Baiyin, we do not have any lint stock. There is basically no pressure on us.