Market Analysis: Why Chinese Ginning Plants Fade Out Of The Market

With the cotton spring sowing work is about to start, the mainland market for this year's cotton business can be described as "retreat.". In Hebei, Shandong and some parts of Henan Province, the author knows that there are few 400 type ginning plants planned to continue to purchase and process this year. Taking Cangzhou, Hebei Province as an example, there will be about 20 processing plants involved in the acquisition in 2020, and it is expected that the number will drop to less than 10 this year. The same is true in other regions.
Why are ginning plants fading out of the mainland market? The author's analysis is as follows
　　 The first is the sharp decrease of resources. In recent years, the phenomenon of "insufficient food" has appeared in ginning plants. Take Hebei Province as an example, the cotton output of the whole province will be 209000 tons in 2020. Based on the capacity of 8000-10000 tons / year of 400 type ginning plant, only more than 20 enterprises can complete the processing. However, on the whole, there are more than 1000 registered 400 ginning plants in Hebei Province, which are seriously "more monks than meat". Enterprises are gradually running out of rice.
　　 Second, in recent years, the ginning plant's profit is too low, the investment is large, the income is low and even the deficit situation, which makes more and more ginning plants change their ways.
　　 Before 2015, there were more than 200 400 type ginning plants in Cangzhou area, and by 2020, it would be reduced to about 20. The root cause is still large investment and low return.
　　 Affected by the epidemic situation, the vast majority of 400 type ginning plants did not make money in 2020. Therefore, more and more enterprises retreated this year.
　　 The third is the rise of Xinjiang. Xinjiang has natural geographical advantages, high yield and good quality of cotton. In addition, the policy support is relatively strong. In recent years, Xinjiang industrial base is rising.
　　 Many mainland enterprises have contracted factories or leased production lines in Xinjiang. This year, many enterprises have moved their factories to Xinjiang.
Therefore, with the decrease of cotton production in the mainland and the growth of Xinjiang industry, the domestic cotton industry is concentrating to Xinjiang and giving full play to the cluster advantages. (correspondent: Camel thorn)