Market Analysis: Forecast The Future Trend Of Domestic Cotton And Clothing Market In 2023

The overall cotton output of China in the year 22/23 has increased, slightly changing from the previous expectation, with an estimated output of about 6.1 million tons.

Affected by the earlier epidemic, the processing progress of seed cotton in Xinjiang in December 2022 was slow, and the ginning plant was not enthusiastic about selling. It is expected that the sales pressure of new cotton will be relatively prominent in the first quarter of 2023; Due to a large amount of cotton inventory in ginning plant, the disturbance of potential supply pressure still exists.

After this round of periodical destocking in the downstream, both the raw material end and the finished product end of the yarn mill have the lowest inventory in the same period in history. At present, the cotton textile industry may be in a passive destocking period, and the downstream still has the power and demand for replenishment of raw cotton, waiting to enter the active replenishment stage.

From the perspective of vacation duration, 38.48% of enterprises will take vacation within one week in 2022, and the proportion will decrease to 21.57% in 2023; In 2022, 65.63% of enterprises will take more than 7 days off, and in 2023, this proportion will decrease to 41.18%. On the whole, due to the market improvement at the end of 2022, textile enterprises have more orders in hand, some textile enterprises have shortened their holiday plans, and the overall holiday duration is lower than the same period last year. From the perspective of production and marketing rate, compared with 2022, the proportion of enterprises whose production and marketing rate is expected to be 71% - 100% after the Spring Festival will increase from 55% to 84.31%; The production and marketing rate of enterprises with 51% - 70% dropped from 38% to 9.8%; The production and sales rate of enterprises below 50% is basically flat, which shows that the confidence and expectation of enterprises in the post holiday market in 2023 is higher than that in 2022.

On the whole, with the adjustment of epidemic prevention and control policies and the improvement of orders, the average vacation time of textile enterprises is also shorter than last year, and the market generally has strong expectations after the festival.

Judging from the total amount of social retail sales of textiles and clothing and the turnover of men's and women's clothing sales across the network, the current terminal consumption of textiles and clothing is at the absolute bottom. According to the National Bureau of Statistics, the total retail sales of consumer goods in December 2022 will be 4054.2 billion yuan, down 1.8% year on year. From January to December 2022, the total retail sales of consumer goods reached 43973.3 billion yuan, down 0.2% year on year. In December, the retail sales of clothing, shoes, hats, needles and textiles were 132.1 billion yuan, down 12.50% year on year and up 3.53% month on month. From January to December, the accumulated retail sales were 1300.3 billion yuan, down 6.50% year on year. With the opening up of the whole country and the gradual recovery of the economy, it is expected that the textile and clothing industry will have a large rebound space, and the demand for cotton raw materials will gradually start.

From the perspective of prosperity performance, the prosperity index of China's cotton textile industry in December 2022 was 49.94, up 2.79 from November, the highest value in the year, and the industry's prosperity level maintained a rising trend.

In December 2022, the purchasing managers' index of China's cotton textile industry was 52.61%, up 19.17 percentage points month on month. Since July 2021, it has returned to above the withering boom line again after 17 months. The index of new orders rebounded significantly above the withering boom line, reflecting that with the lifting of epidemic control, the downstream demand recovery is expected to drive the purchase situation to increase significantly; The production volume and cotton inventory index also rose significantly, and the situation of enterprises stocking up after the festival became more common. The overall number of enterprises receiving orders, especially internal orders, increased significantly, the willingness to replenish raw materials, and the operating rate increased steadily.

In the fourth quarter of 2022, the terminal consumption is at the bottom. With the economic recovery in 2023, there is a large rebound space, and the direction of consumer repair is relatively clear.

In December 2022, after China's full liberalization, the number of domestic infected people will surge in a short time, which will have an impact on consumption. Therefore, the comprehensive repair of domestic consumption may occur after the number of infected people has entered a relatively stable state. In addition, the epidemic has a great impact on the consumption power of residents, with a sharp reduction in consumption expenditure and an increase in excess savings in 2022; If there is no further consumption stimulus policy, the overall repair efforts will be limited. The improvement of residents' consumption still needs to rely on employment growth to bring about income growth, as well as the recovery of consumer confidence. Therefore, we judge that the repair of the consumer end in the first quarter of 2023 remains to be confirmed, including whether the number of infected people at the practical level has stabilized to stimulate consumption activities, and whether the consumer confidence at the expected level has been repaired to release excess savings.

At the same time, from a seasonal perspective, the consumption propensity of domestic residents (national per capita consumption expenditure/national per capita disposable income) generally rose in the second quarter and the fourth quarter.

According to the data of the General Administration of Customs, in December 2022, China's export of textiles and clothing reached 25.297 billion US dollars, down 16.25% year on year and up 3.74% month on month; Among them, textile exports were US $11.003 billion, down 22.95% year on year and 2.33% month on month, while clothing exports were US $14.294 billion, down 10.25% year on year and up 8.95% month on month.

From January to December 2022, China's textile and clothing exports totaled US $323.345 billion, up 2.64% year on year; Among them, textile exports reached US $147.948 billion, up 2% year on year, and clothing exports reached US $175.397 billion, up 3.2% year on year.