The Sharp Rise And Fall Of Cotton Prices Hurt The Textile Industry.

In the past 3 months, Zheng

The grid is almost straight up, breaking through people's expected price. Although there have been several brief pullbacks, the upward trend has not been reversed.

Since April July, the biggest increase in the main contract of zhengmian has reached 56.42%.

At the same time,

The selling base price is also rising, which makes the downstream textile enterprises once again in trouble.

At present, the amount of state cotton storage is only 20 thousand tons per day, far lower than the market expected, and cotton spinning enterprises are at low inventory level. In the short term, the market is in short supply, resulting in the rise of cotton prices and current prices.

Cotton prices skyrocketed and plummeted.

Industry injury is huge. From the perspective of industry, it is also hoped that cotton prices will remain relatively stable.

With the end of the import of cotton resources, the paction price of national cotton stores is increasing. The difficulty of purchasing has caused most enterprises to stop production and halt production, and the situation is expanding.

At the same time, the domestic commodity cotton is nearly sold out, and the competition of national cotton stores is fierce. The main reason is that the amount of delivery is too small, and the actual delivery amount is less than 40% of the national development and Reform Commission's commitment.

According to the survey, the rise in cotton prices has not only led to the problem of "intestinal obstruction" in Chinese textile enterprises, but also the "cotton bowl" in India, Pakistan and Vietnam. Such a high cotton price has discouraged domestic cotton mills such as India and Pakistan, and cotton purchases have declined considerably. Textile enterprises in Gujarat, Lahore and other places indicated that since late June almost no longer received orders. After the completion of the previous contract, they planned to cut down production or stop production. Cotton prices were too high, resulting in the loss of more production, the loss of more products, and the loss of more stockpiles.

Some international cotton traders reflect that the domestic textile mills have made an inquiry on the low grade cotton in 1-3 2016/17 (M, SLM, mainly spun OE10S-21S), but the excessive cotton price has seriously restricted the demand of the textile enterprises. The cotton mill has a large stock of gauze in the near future, and the sales of the downstream enterprises have not improved.

The rise of global cotton prices has brought a fatal blow to the entire cotton and cotton spinning industry.

Cotton tight to 100 textile mills in Pakistan

Pakistan National Textile Mills Association said that the United States or cotton instead of India cotton has become the largest source of cotton imports in Pakistan.

Since the beginning of this year, Pakistan has imported 510 thousand tons of cotton, of which 425 thousand tons are India cotton.

In recent years, the rapid rise of cotton prices in India has highlighted the competitive advantages of the US cotton industry, and the US cotton is becoming the main source of Pakistan's cotton imports.

The association said that in the past half a month, India cotton prices rose 35%, higher than the international market 8-10%, the domestic textile mill procurement from India cotton to cotton.

Pakistan's industry expects that cotton production will reach more than 1 million 900 thousand tons in 2016 if yields increase and pest problems are small.

USDA expects the end of this year to stock 544 thousand tons in Pakistan, which will last two and a half months.

Although the Pakistan textile mill will not cancel the India cotton order, cotton traders may break the contract by making up the difference.

According to the industry sources in Pakistan, the inventory of Pakistan ginning mills is very low, and Pakistan trading company has no inventory at all. The market supply is very tight. The cotton prices in Pakistan are rising, and the rapid rise in cotton prices has led to panic buying in textile mills.

Due to the tight supply of cotton, the Pakistan textile mill has begun to suspend production or reduce production, and about 100 factories have been closed.

Industry figures in the country said there was a huge reduction in cotton production last year, but the government still levied 1% tariffs on cotton imports, which was completely unjustified.

The government of Pakistan has announced a 10% tariff on imported cotton yarn after the import of cotton yarn is tariff free.

According to statistics, Pakistan's imports of cotton yarn amounted to US $27 million 350 thousand in the first half of 2016.

India textile mill is also suffering from high cotton price.

Recently, India's domestic cotton prices have unusually suddenly risen, making textile mills shocked.

In January, India's domestic high-grade spot price was 32500 rupees / candle, which rose to 33700 rupees in early March and soared to 47800 rupees in July 12th.

Cotton prices have risen by 47%, the biggest increase in recent years.

Textile companies expect cotton prices to continue to rise in July.

Although there is no way to control cotton stocks in circulation channels, India insiders believe that the actual inventory is about 765 thousand tons, which is two times the same level in the same period in previous years.

India textile mills believe that the current domestic cotton prices soaring is not sustainable. Judging from the price trend in the past ten years, cotton prices in the first week of August are expected to be callback.

A textile factory official said that at present, besides China, the global stock is very abundant, and there is no need for panic buying.

As for the impact of soaring cotton prices on business operations, the official said that the southern India textile mill could purchase imported cotton with a price lower than that of domestic cotton, but the problem is that it takes 3-4 weeks for cotton to arrive at the factory, while the small plant has no money to purchase in large quantities.

According to India's industry estimates, cotton imports in India this year have exceeded 340 thousand tons, far higher than the expected 187 thousand tons.

The South India Textile Mills Association suggests that the textile industry hopes that the government will not intervene in the market at this time. The textile industry should have a fair competition environment, because the financing cost of India enterprises is high and the fluctuation of cotton prices is too large.

The government can consider raising the standard of financing and margin level, because it will not cause capital outflow or consider the cotton reserve policy.

The association suggested that the India government should introduce a "price stabilization mechanism" or discount scheme at least during the month of November when -4 was launched in large quantities to enable textile mills to ride out price fluctuations.

The India industry said that the Cotton Corp of India should collect and store 110-120 tons of cotton and maintain it at this level and sell it to textile mills only.

China's 184 home textile enterprises jointly signed the relevant state departments.

Due to the absurd rise in cotton prices, 34 cotton textile enterprises in Henan province have jointly written to the relevant departments of the state. Recently, nearly 150 cotton textile enterprises in Hubei, Hunan, Shandong, Hebei, Zhejiang, Fujian, Jiangsu, Guangdong and other places also reflected the problems in the cotton textile industry association in the form of telephone and joint letters, and hoped that the relevant departments of the state would be encouraged to solve the cotton problem in cotton textile enterprises as soon as possible so as to ensure the normal production of cotton textile enterprises.