Market Analysis: Economic Operation Of Cocoon And Silk Industry In The First Half Of 2021

I. Basic Situation of industry economic operation

(1) the output of main products is basically stable

From January to June 2021, according to the statistical data of Enterprises above Designated Size by the National Bureau of statistics, the silk output was 22859 tons, a year-on-year decrease of 3.7%, and a decrease of 18.05 percentage points over the same period of last year. Among them, the output of silk was 1492 tons, a year-on-year decrease of 3.17%; The output of silk and satin was 184.37 million meters, a year-on-year decrease of 5.53%, and a decrease of 7.86 percentage points compared with the same period of last year; The output of silk quilt was 12.69 million, a year-on-year increase of 28.33%, and a decrease of 37.51% in the same period last year. See Table 1, table 2 and table 3 for the output of main products in various provinces and cities.

(2) the operation quality and efficiency have been significantly improved

According to the statistics of 574 silk textile and finishing enterprises above the designated scale by the National Bureau of statistics, the business income of the whole industry from January to June was 30.03 billion yuan, an increase of 10.36% over the same period of last year, an increase of 27.05 percentage points over the same period of last year. Among them, the silk reeling processing business income was 12.352 billion yuan, with a year-on-year increase of 11.16%; The business income of silk weaving processing was 14.875 billion yuan, with a year-on-year increase of 7.21%; The business income of silk screen printing and dyeing was 3.104 billion yuan, with a year-on-year increase of 24.3%. See Figures 1 and 2.

?

From January to June, the whole industry realized a profit of 1.199 billion yuan, a year-on-year increase of 112.14%, an increase of 144.51 percentage points over the same period of last year. Among them, the profit of silk reeling processing was 560 million yuan, with a year-on-year increase of 671.88%, that of silk weaving processing was 530 million yuan, with a year-on-year increase of 18.85%, and that of silk printing and dyeing processing was 109 million yuan, with a year-on-year increase of 113.07%. See figures 3 and 4.

From other economic indicators, from January to June 2021, 161 enterprises in the industry suffered losses, with a total loss of 239 million yuan, a year-on-year decrease of 53.69%; The loss area was 28.05%, with a year-on-year decrease of 15.51 percentage points. From the loss situation of each sub industry, the number of loss making enterprises decreased significantly, and the loss area was significantly narrowed. Among them, 57 silk reeling processing enterprises suffered losses, accounting for 24.36%, a year-on-year decrease of 24.11 percentage points; 89 silk weaving and processing enterprises suffered losses, accounting for 30.9%, a year-on-year decrease of 8.83 percentage points; 15 silk screen printing, dyeing and finishing enterprises suffered losses, accounting for 28.85%, a year-on-year decrease of 11.89 percentage points. The total amount of industrial liabilities was 33.084 billion yuan, up 3.8% year on year; The inventory of enterprises was 12.252 billion yuan, up 0.14% year on year; Sales expenses increased by 3.67%, management expenses increased by 8.69%, and financial expenses decreased by 5.97%.

The above data show that, compared with the same period in 2020, the economic indicators of the industry in the first half of this year have improved significantly, and the loss area of the industry has been greatly reduced, which is 7.4 percentage points lower than that of the textile industry, indicating that the quality and efficiency of the industry is gradually improving.

(3) silk trade

1. The domestic market continues to grow

According to the monitoring of the Ministry of Commerce, the sales volume of 50 Silk sample enterprises in China from January to June was 1.483 billion yuan, a year-on-year increase of 33.99%. Among them, the sales volume of silk and satin was 602 million yuan, with a year-on-year increase of 72.79%; The sales volume of home textile products was 554 million yuan, with a year-on-year increase of 27.70%; The sales volume of silk clothing was 194 million yuan, with a year-on-year increase of 13.57%; Clothing sales volume was 104 million yuan, up 1.41% year on year; The sales volume of other products was 30 million yuan, down 42.37% year on year. From the monthly sales data, since March, the sales amount of that month increased by more than 30% year-on-year, indicating that the domestic silk market has been effectively recovered, as shown in Figure 5.

2. The export market is gradually warming up

According to the statistics of China Customs, from January to June 2021, China's real silk exports reached 587 million US dollars, a year-on-year increase of 6.25%, accounting for 0.41% of the national textile and clothing exports, and the textile and clothing exports increased by 12.79% over the same period. Among them, silk exports reached 129 million US dollars, down 13.6% year-on-year; The export of silk and satin reached 153 million US dollars, up 9.24% year on year; The export of silk clothing and products reached 305 million US dollars, up 15.92% year on year. The export value of silk satin, silk clothing and products accounted for 26.06% and 51.96%, respectively, up 0.68% and 4.33% over the same period last year, as shown in Table 4.

From the perspective of the export amount in a single month, except for January and March, which decreased compared with last year, the other months had different growth rates. The export data of the second quarter was obviously better than that of the same period last year, indicating that the export of real silk goods began to pick up gradually. However, the average monthly export in the first half of the year is only 98 million US dollars, which is still a large gap compared with the average monthly export of 145 million US dollars in the first half of 2019, as shown in Figure 6.

From the perspective of the structure of export commodities, the export of silk products to the European Union and Japan increased from decline to increase, with a year-on-year increase of 1.0%, accounting for 40.47%; Exports to India decreased by 48.98%, accounting for 14.33%; Compared with Japan, it increased by 2.04%, accounting for 14.08%. The decline rate of silk and satin exports to the EU was significantly narrowed, and the growth rate of silk and satin products to Hong Kong, China increased, and Hong Kong rose to the second place in the export market. Among them, exports to EU decreased by 11.48%, accounting for 23.74%; Hong Kong, China, increased by 48.73% year-on-year, accounting for 14.43%; Pakistan increased 107.95% year-on-year, accounting for 13.07%; India decreased by 23.01% year-on-year, accounting for 5.65%. The export of silk clothing and products to the United States has increased, the export to the EU has changed from decline to increase, and the export to the UK has maintained a rapid growth. Among them, exports to the United States increased by 10.77%, accounting for 35.22%; The EU increased by 2.84% year on year, accounting for 22.18%; Hong Kong, China, increased by 8.56% year-on-year, accounting for 9.11%; The UK increased by 78.57% year-on-year, accounting for 8.01%; Japan increased by 18.86% year on year, accounting for 7.87%. It can be seen that the European Union is the largest export market for silk and silk products, while the United States is the largest export market for silk clothing and products, as shown in Figure 7.

From the perspective of exports to major markets, the growth rate of exports to the United States has expanded, and the United Kingdom ranks fifth in the export market, surpassing India. The top five markets were as follows: the EU decreased by 1.47% year-on-year, accounting for 26.60%; The United States increased by 11.26% year-on-year, accounting for 19.60%; Hong Kong, China, increased by 22.75% year-on-year, accounting for 8.69%; Japan increased by 9.64% year-on-year, accounting for 8.23%; The UK increased 71.36% year-on-year, accounting for 4.82%, as shown in Figure 8.

Judging from the export situation of major provinces and cities, the export amount of Real Silk Commodities ranked in order of Zhejiang, Jiangsu, Guangdong, Shanghai and Shandong. Among them, Zhejiang increased by 0.32% year-on-year, accounting for 35.35%; Jiangsu increased by 10.93% year on year, accounting for 17.41%; Guangdong decreased by 7.17% year-on-year, accounting for 10.44%; Shanghai decreased by 12.23%, accounting for 8.24%, while Shandong increased by 33.70%, accounting for 8.20%. The export growth of Jiangsu and Shandong continued to expand, while the export of Zhejiang province changed from decline to increase. The export value of Real Silk Commodities in the top five provinces and cities accounted for 79.64% of the total export value of the whole country, and the export advantages of the eastern coastal areas were still obvious.

3. Import demand has increased significantly

According to the statistics of China Customs, from January to June 2021, China's imports of real silk goods amounted to 211 million US dollars, up 105.39% year-on-year, and the import volume of textiles and clothing increased by 25.63% over the same period. Among them, silk imports amounted to 28.153 million US dollars, up 172.49% year on year; The import of silk and satin was US $9.4503 million, up 3.71% year on year; The import of silk clothing and products was 174 million US dollars, up 108.18% year on year (see Table 5 and Figure 9).

In terms of the main source regions of real silk imports, China's import amount from the EU has maintained a substantial increase, ranking continuously and steadily, maintaining the first place in import. The top five source countries and regions of silk imports are EU, India, China, Uzbekistan and Vietnam. Among them, the EU increased by 117.10% year-on-year, accounting for 76.11%; India increased by 113.58% year-on-year, accounting for 5.46%; China increased by 20.43% year-on-year, accounting for 5.38%; Uzbekistan increased 310.99% year on year, accounting for 4.69%; Vietnam increased by 74.70% year-on-year, accounting for 1.31%.

In terms of imports of major domestic provinces and cities, the top five provinces and cities in terms of import value are Shanghai, Zhejiang, Guangdong, Beijing and Anhui, accounting for 92.95% of China's total imports. Among them, Shanghai's real silk imports increased by 106.44% year-on-year, accounting for 76.34%; Zhejiang increased 257.92% year on year, accounting for 8.52%; Guangdong increased by 35.72% year on year, accounting for 4.32%; Beijing increased by 17.67% year on year, accounting for 2.00%; Anhui increased 184.65% year on year, accounting for 1.77%.

　　 （4） Cocoon silk price rises steadily

Since 2021, due to the gradual recovery of international market demand, the rising domestic consumption demand, some enterprises hoarding goods, and the tight supply of raw materials, the price of cocoon and silk has continued to rise (see Figure 10 and Figure 11). By the end of May, the price of dried cocoon and raw silk reached 148400 yuan / ton and 449700 yuan / ton respectively, Compared with the end of last year, the increase rates were 36.90% and 36.89% respectively. In view of the rapid rise in raw material prices in the first half of the year, while silk consumption at home and abroad has not been effectively restored, in order to strengthen macro-control of the cocoon and silk market, the Ministry of Commerce issued an announcement on May 31 to release 900.49 tons of reserve factory silk in an open manner, which to a certain extent inhibited the irrational rise of domestic cocoon and silk prices. At present, the prices of dried cocoon and raw silk maintain a narrow consolidation pattern.

According to the association's survey, affected by the rise in silk prices since the beginning of the year and the reduction of cocoon production in some areas, the purchase prices of spring cocoons in Yunnan and other places even exceeded 70 yuan / kg, while those in Guangxi and Sichuan exceeded 60 yuan / kg. It is estimated that the average purchase price of spring cocoons in China will be about 55 yuan / kg, A record high in the same period of history. By the middle of July, the highest purchase price of summer cocoon in Luliang County of Yunnan Province was 60 yuan per kilogram, while that of Napo County in Guangxi Province was still around 50 yuan per kilogram. However, due to the high cost of cocoon raw materials, and the subsequent reeling process needs a certain period of time, the downstream links such as silk weaving and clothing are greatly affected by the changes of domestic and foreign markets, which makes the risk of cocoon and silk prices hanging upside down.

2. Main factors affecting the industry at present

In the first half of 2021, in the face of the complicated economic situation at home and abroad, the cocoon and silk industry thoroughly implemented the decision-making and deployment of the CPC Central Committee and the State Council, and comprehensively promoted the epidemic prevention and control and economic and social development. In the case of repeated outbreaks at home and abroad, the industry economy showed strong development toughness and vitality, laying a good foundation for the "14th five year plan" new situation, However, the risks and challenges faced by the industry development can not be ignored. It mainly includes the following aspects:

(1) there are many uncertain factors in the international environment

Since 2021, the international political and economic environment has been unpredictable, the new global epidemic situation has fluctuated, and the virus has frequently mutated, which has led to the instability and uncertainty of the world economic and trade environment. In terms of the impact of the epidemic situation, the coverage rate of new coronavirus vaccine in developed countries and major economies is relatively high, and the economic recovery speed is accelerated. However, the global vaccination is not balanced. Due to the shortage of vaccine in emerging economies and underdeveloped countries, virus variation and local epidemic situation are still likely to break out from time to time, thus affecting the resumption of work and production and impacting the global commodity supply, It is a drag on the overall recovery rhythm of the world economy. There are big differences in the judgment of the Federal Reserve on reducing quantitative easing and raising interest rates in the second half of the year in the international financial market. The stronger US dollar will lead to increased pressure on currency devaluation in some emerging economies, and there may be severe shocks in the global financial market. In addition, disturbed by the new geopolitical situation, such as the spread of "anti globalization" trend and the politicization of "virus tracing", the uncertain factors of world political situation in the post epidemic period increased, which aggravated the instability of geopolitical pattern. At the end of July, the International Monetary Fund predicted that the global economy would grow by 6% in 2021, and the overall recovery growth of the global economy in the second half of the year may slow down.

(2) the domestic economy maintained a steady and positive trend

With the overall stable situation of domestic epidemic prevention and control and the recovery of domestic and international markets, the domestic economy has been steadily improving. According to the preliminary calculation of the National Bureau of statistics, GDP in the first half of the year increased by 12.7%, higher than the expected target of more than 6%, with an average growth of 5.3% in two years; The total retail sales of consumer goods reached 21.19 trillion yuan, an increase of 23% year-on-year and 9% compared with the same period in 2019. The domestic economy is characterized by improved efficiency of manufacturing industry, stable investment foundation, active development of new business forms, constant release of new kinetic energy, rapid growth of residents' income and strong aftereffect of expanding consumption. At the meeting of the Political Bureau of the CPC Central Committee held on July 30, the economic work in the second half of the year was arranged. It was emphasized that the continuity, stability and sustainability of macro policies should be maintained with positive fiscal policy and stable monetary policy, and the economic operation should be kept in a reasonable range. In the second half of the year, domestic investment is expected to grow steadily, the price rise tends to be stable, the production price index is expected to gradually fall, the risk of imported inflation will be further reduced, and the consumer market will be further improved. It is expected that China's economic growth will be high in the first half of the year and stable in the second half of the year, with a moderate to high growth rate this year and next.

(3) the relevant policies and plans of the industry have been issued in succession

On June 11, 2021, the "14th five year plan" development outline of textile industry issued by China Textile Industry Federation pointed out that it is necessary to continuously deepen the industrial structure adjustment, transformation and upgrading, and promote the dynamic balance of supply and demand in accordance with the development direction of "innovation driven science and technology industry, culture led fashion industry, and responsibility oriented green industry", We should strengthen scientific and technological innovation and personnel training, create new advantages in international cooperation and competition, promote regional coordinated development, build several world-class advanced textile industrial clusters, form a number of well-known multinational enterprise groups and textile and clothing brands with international influence, and accelerate the pace of moving towards the middle and high-end of the global value chain, It plays an important role in consolidating the position of textile power and realizing the goal of manufacturing power and quality power. In the second half of this year, the National Cocoon and silk Office of the Ministry of Commerce will issue the guiding opinions on the development of the cocoon and silk industry during the "14th five year plan", which puts forward the specific objectives and key tasks for the development of the cocoon and silk industry during the 13th five year plan period. At present, Sichuan, Jiangsu and other provinces and cities are formulating the "14th five year plan" of the industry, and Hechi, Nanchong and other prefecture level cities are also formulating local industrial development plans, and relevant policies and measures are worthy of high attention of the industry.

3. Industry development trend in the second half of the year

Judging from the above situation, it is estimated that the output of major domestic silk products will increase steadily in the second half of 2021, the industrial economic growth will slow down, the domestic silk market will maintain a stable growth, the silk commodity export will maintain a small growth trend, and the economic prosperity of the industry is expected to be further improved.

In view of the complex and severe external environment faced by the industry, the overall growth momentum of consumption demand in the internal and external markets is weak, the rising pressure of commodity prices is greater, the production and operation difficulties of enterprises are more, and the uncertain and unstable factors in the economic operation of the industry can not be ignored. Therefore, it is suggested that industries and enterprises should pay close attention to the changes of economic situation at home and abroad, seize the strategic opportunity of national expansion of domestic demand, accelerate the cultivation of domestic demand system of silk, rely on the strong domestic market, connect all aspects of production, research and development, design, circulation and consumption, form a higher level dynamic balance of demand leading supply and supply creating demand, and adopt new technology, new business forms, new business forms, etc The new model injects strong momentum into industrial transformation and upgrading. At the same time, it is necessary to continuously optimize the structure of silk export commodities, promote the upgrading from the low end of the value chain to the middle and high-end ones, further consolidate and enhance the international competitiveness, accelerate the construction of a new development pattern with the domestic big cycle as the main body and the domestic and international dual circulation promoting each other, so as to lay a more solid foundation for promoting the high-quality development of the industry during the "14th five year plan".

(source: China Silk Association)

?