Cotton Price: Shaking Up The Normal Production Of Enterprises And Squeezing The Profit Margins Of Enterprises

The reason for the launch of the group

The increase has resulted in a decrease of 36 million yuan in sales revenue compared with the same period last year, while the purchase volume of March in textile spinning Federation decreased by 15% compared with that of the previous year.

The way of price settlement leads to the decline of comprehensive benefits.

Qingdao Yao Jie Fashion Co., Ltd. directly affects the profit of cotton by about 10%.

Recently, the survey data released by the consumer goods industry bureau of the Municipal Commission of Commerce showed that cotton prices continued to run high in China this year, giving most cotton prices high prices.

The production and operation of enterprises has brought about a great impact, which has also made a serious impact on cotton textile processing enterprises in our city. The production and operation of enterprises are facing awkward situations, difficulties in capital turnover, insufficient stock of raw materials, and further decline in the efficiency of enterprises.

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The industry is an important product in China's export field. In the overall industrial structure of Qingdao, textile and apparel also ranks among the seven largest industries. At present, there are more than 3000 large and small textile and garment enterprises in Qingdao. The vast majority of them are based on the mode of foundry and export. As is known to all, China's textile industry is also in an awkward position with scale and no position, just like the steel and rubber industries. On the one hand, the price of cotton and the rise of labor prices, on the other hand, the lack of pricing power and market leading power in the downstream market area. Qingdao's textile and garment industry is encountering the situation of "two heads getting angry".

Reporters learned in the interview that this situation has attracted the attention of some departments in our city. At present, it is timely reflecting the difficulties and problems brought by the rising cotton prices to the relevant departments of the state, while taking various measures to expand the domestic market, and at the same time, seeking the breakthrough through the strength of the trade associations.

Shake up normal production of enterprises

According to the law of industry development, cotton is the main raw material of cotton spinning enterprises, accounting for 60~70% of the cost.

According to the average profit of 12% of the industry, cotton price rises by 1% every time, and the profit of enterprises drops by 0.53%.

As a typical export oriented industry, textile enterprises' "getting angry" at the two ends will not be easily accepted by consumers by increasing the price of their products, and the export orders will be largely lost if the textile enterprises increase their prices.

This situation has brought embarrassment to the production and operation of enterprises. According to the "hair" and "green spinning" association, the cotton price has risen sharply, which has seriously endangered the normal production of textile and garment enterprises. The loss of small bills and small profits has seriously affected the later stage production and operation of enterprises. The sales of this group have been reduced by 36 million yuan over the same period last year due to the rising cotton prices.

And the rise of cotton prices also brings another problem. Because the market risk is too high, enterprises generally dare not purchase raw materials in large quantities, which makes most enterprises lack stock of raw materials.

According to relevant industry sources, in the face of soaring cotton prices, purchasing enterprises and textile and garment enterprises have increased their direct or indirect production costs, and they dare not want to take the risk of high price acquisitions.

High cotton prices and low inventories bring unprecedented pressure to enterprises.

In March this year, the group did not purchase cotton abroad. Now the stock of cotton can keep the enterprise running for a month and a half. Under normal circumstances, enterprises should keep cotton for three months. The current gap is about 1500 tons. Haili lace company's stock is all quoted on the same day, and the customers will settle accounts at the same day order price, and the comprehensive efficiency will decline, which will affect the scale development of enterprises.

Squeezing profit margins

Whether it is extrusion order or insufficient stock of raw materials, will bring cash flow difficulties to the textile and garment enterprises that need a large amount of cash flow.

At the same time, the sharp rise in cotton prices has caused great pressure on textile enterprises. Textile prices and cotton prices are not synchronized, causing some textile enterprises to cash in difficulties, leading directly to the textile enterprises not dare to quote, dare not receive large single long list, weakened the market competitiveness, exacerbated the risk of camp.

In order to avoid the negative impact of the rising cotton prices, the green spinning Union had to take measures to reduce the quantity of purchases. In March, the purchase volume dropped by 15% compared with the same period last year. That is to say, 2010 increased the purchasing cost by 37 million yuan, which occupied the profit margin of the enterprises.

These conditions have also led to a further decline in the efficiency of enterprises. From cotton, cotton yarn to cotton cloth, every link is raising the price, which has a significant negative impact on the profitability of textile enterprises. Under the condition of increasing comprehensive costs, the overall efficiency of enterprises has declined sharply.

As the price increases vary, and the smaller the price rises, the higher the cost and the market risk, the more difficult for the downstream enterprises to survive.

Although the cotton supply basically meets normal production, the cotton yarn produced by Xi Ying men group can only meet the internal use of the enterprise, and the price of terminal products such as towels has increased by 20~35% compared with the same period last year, much lower than that of cotton price 77~106%. The enterprises such as beautiful and snow group reflected that the increase of cotton price caused the price and supply of cotton yarn and chemical fiber materials needed for production, which increased the production and operation cost of enterprises, and further reduced the profit rate. The order of 1~3 group decreased by 20% compared with the same period last year, and the direct loss was as high as about 10000000 yuan.

This year's 1~3 month, Qingdao Yijie Fashion Co., Ltd. has an average unit price of 14.55 yuan, an increase of 2.26 yuan over the same period last year, an increase of 18.39%, which has a direct impact on profit of about 10%.

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Adverse factors "combined encirclement and suppression"

According to the research materials of the consumer goods industry department of the Municipal Commission of credit, the cotton price in China jumped to the peak of 33000 yuan / ton in November 11th last year, and the turnaround dropped sharply to 26100 yuan / ton in December 1st, or 16.6%. After entering 2011, domestic cotton prices rebounded moderately, rising to 30 thousand yuan in March.

Taking 329 graded cotton as an example, the market price of Qingdao in March 18th was 33000 yuan / ton, an increase of 106% over the same period last year, and the growth rate was 4.4%, a 11.9% increase over the January 18 day of 29500 yuan / ton.

Taking 328 graded cotton as an example, the market price of Qingdao in March 18th was 29500 yuan / ton, an increase of 77.3% over the same period last year, an increase of 1.7% compared to the same period in January 18th, a 3.5% increase compared with 28500 yuan / ton in January 18th.

What is even more serious is that in this process, not only the single rise of cotton prices, the rise of wages, housing, water and electricity are all exerting a subtle influence on the development of textile and garment enterprises. Textile and garment enterprises are facing a series of bad news "joint encirclement and suppression".

It is understood that due to soaring cotton prices, according to the relevant agencies of the province's more than 100 enterprises monitoring, Qingdao, Weifang and other places of textile enterprises cotton and fiber ratio has reached 5:5.

At the same time, Huajin, Qingfang Union, Yi Fa, Xi Ying men and other island enterprises have built large industrial parks in Jiaozhou, Pingdu, Jimo and other places to pfer labor cost pressure built in the urban area.