What Is The Real Reason For The Continued Decline In Cotton Imports?

In November 12th, the Chinese Customs announced the domestic market in October.

Imports, as announced in the previous 8 and September, continue to decline in imports, and who has ended the importation of cotton in the domestic cotton market.

According to China Customs data, the import volume in 2013 was about 4 million 160 thousand tons, in 2014 China.

The amount of cotton is about 2 million 750 thousand tons, while the import volume of cotton in 2015 is about 1 million 200 thousand tons in 1-10 months. We can see that since 2013, cotton imports have been cut down year by year.

Not only the total import volume of cotton in China continued to decline, but also the monthly import volume also showed a downward trend. According to the statistics of China Customs, 70 thousand tons of cotton were imported in August 2015, 50 thousand tons of cotton were imported in September 2015, and the import volume dropped to 42 thousand tons in October 2015.

As the import volume continues to decline, who is behind the scenes? Some say the difference between the inside and outside cotton prices is narrowed. Others say that the cotton enterprises in the mainland have moved abroad to build factories, and some even say that they are quotas.

The above is not unreasonable, but who is the real behind the curtain? I think the main reason is the import yarn impact and the downstream demand market weakness.

Current domestic

The survival situation of the industry is quite difficult, orders are reduced, and the profits of products have been greatly reduced. Many enterprises have basically lost profits after deducting the relevant costs.

Live to become the biggest luxury of textile enterprises.

According to China Customs data, in 2015 1-9, China's cotton import volume has reached about 1800000 tons, and by the end of the year, 2 million tons is not a big problem.

When a large number of imported yarns are raging, the domestic textile enterprises are hard to resist, and basically withdraw from the competition of 40 lower end cotton yarn products. More enterprises can only compete for the high-end market in order to survive.

Ye Jianchun, vice president of China Cotton Textile Industry Association, once said that the actual operating rate of domestic textile enterprises in 2014 was 7000-8000 million ingots, and the actual operating rate in 2015 was only 5000-6000 million spindles.

Indeed, over the past two years, a large number of domestic textile enterprises have been shut down and shut down, even though the start-up enterprises have not been able to produce normally.

When visiting Shandong textile enterprises, it is understood that the local enterprises start up rate is generally 60-80% (the size of enterprises is different, the product grades are different, and the starting rate will vary).

Cotton imports are in line with last year's cotton imports. However, the import volume of cotton has dropped sharply, which is also related to the more intense competition and weak demand in the global market.

As ASEAN and other emerging markets and developing countries use low-cost advantages to accelerate the development of export-oriented industries, especially the clothing trade industry, China's trade protectionism and competition pressures in the international market are further increasing. The trend of orders shifting outward is obvious, leading to the poor export situation of textile clothing and exports, coupled with the slow recovery of the international economy, and the reduction of export orders. Therefore, domestic cotton imports have declined sharply.

Although the momentum of import cotton growth has been curbed, the cold winter experienced by domestic textile enterprises is not far away. The only way out is to do hard work and enhance product competitiveness.