Textile industry struggles with high cotton prices

Since the beginning of this year, cotton has soared and it has kept its record for nearly 10 years. On October 9th, in the spot market, the Chinese cotton price index was 22,900 yuan/ton, which was 190 yuan/ton higher than the previous day. ** On the market, Zheng cotton 1105 contract opened higher and stayed higher on the 8th and continued to rise, compared with the previous transaction. Day rose by 6%.

The sudden increase in prices has caused great impact on the textile industry in our province. Many heads of textile companies are concerned that if this continues, the province’s textile industry will fall into a large area of ​​production cuts or production cuts. The outlook is worrying.

The textile industry, which has just fallen out of the shadow of the financial crisis, once again fell into trouble.

Reporters found that in wholesale markets around Hangzhou, such as Sijiqing Clothing Wholesale Market and Huanbei Small Commodity Market, autumn wholesale prices have risen, and the general increase has exceeded 10%. Even the low-cost attractive Taobao online clothing stores have With the new listing timing adjustments.

On the Yongchang section of Lanxi, State Highway 330, there are hundreds of offices set up from cotton mills across the country. Recently, the business is particularly busy. From time to time, trucks carrying cotton yarns are loading and unloading cotton yarn. A cotton yarn salesman said that because of the increase in cotton prices, customers were still waiting to see some time ago, but the two-day trend has already made many customers sit still. Local textile companies have doubled cotton yarn purchases to reduce the impact of price increases.

Due to the rapid recovery of the textile industry in the early stage and the industry boom, the inventory of domestic textile companies is also low. "Lanxi is also the same, the current inventory of textile mills are generally used in half a month to one month." Zhang Shugen, president of Lanxi Textile Association and head of Zhejiang Ma Yunshan Textile Company, said, "The continuous soaring price of cotton has caused local Many textile companies are panicked."

The biggest impact of the rise in cotton prices may be export-oriented textile companies. Ye Xiandong, chairman of the China Children's Wear Chamber of Commerce and chairman of the Red, Yellow and Blue Children's Wear Company, said that in addition to the cost factor of cotton, the recent appreciation of the exchange rate of the US dollar against the US dollar has added to the predicament of the textile industry, which was originally at a low profit.

Why cotton prices rose from cotton to clothing, prices seem to spread to the entire industry chain, and even related chemical fiber products prices also showed a larger increase. Consumers and companies all hope that prices can come back to bear.

According to Zhang Shugen's analysis, there are many factors driving this round of cotton price increases. According to the China Cotton Association, in addition to the rising cost of fertilizers, pesticides, seeds, and other cotton planting, delays in sowing this year and meteorological disasters have affected cotton yields. The purchase price of cotton is certainly higher than last year; on the other hand, foreign orders after the financial crisis. With soaring demand for cotton, there has been a gap between cotton production and demand, which has led to a rise in cotton prices.

Changes in international cotton supply and demand also have an impact on domestic cotton prices. According to reports, the global cotton production area was affected by disasters, and production fell. India reduced cotton exports. The lower dollar drove cotton prices higher, and these superposition factors helped boost China's cotton prices. In addition, the rise in cotton prices also caused speculation in hot money and cotton farmers reluctant sellers.

The state has adopted throwing reserves to solve the short-term supply shortage. According to statistics, from August 10 to September 25, China Storage Cotton has sold a total of 540,000 tons of reserve cotton, and the China Cotton Textile Industry Association released a message on its website on the 26th that the state is making efforts to ensure the production of textile companies. Cotton demand, decided to continue to put 400,000 tons of national reserve cotton into the market. Although there are so many measures, cotton is in a tight supply situation, and no one can tell when the cotton price has been adjusted.

Where do companies go? "The price of cotton has risen by more than 20% in a few days, so that the rate of growth is too far off the mark, and it will be too late to digest. The pressure on textile and garment companies will be great," said Ye Xiandong.

In fact, the problem has emerged: Ye Xiandong recently received a lot of news from textile and garment companies. Due to the huge cost pressures and price instability, they cannot accept mid-to-long-term orders from their companies. Similarly, many textile companies in Lanxi, Shaoxing and Xiaoshan are very cautious about orders from home and abroad. "In addition to stepping up orders for orders at hand, many companies have temporarily given up new orders," said a person in charge of a textile company in Ningbo.

Some companies are actively taking countermeasures. Zhejiang Ma Yunshan Textile Company adjusted the product structure, increased the proportion of chemical fiber fabrics, and effectively reduced production costs. Zhejiang Aifu Textile Co., Ltd. signed a full-year contract at the beginning of the year and basically locked in raw material prices. Now, sales and profits are all normal. Zhuji’s Jie Liya Group spent money on cotton production to establish a cotton production and processing base and integrate the industrial chain to reduce the impact of raw material fluctuations.

However, for most textile and garment companies, what can be done at present can only wait for this round of price increase storm.

“Cotton growth is a long-term trend, but the key is to steadily proceed. Otherwise, it will ultimately be of no benefit to the upper and lower reaches.” Zhang Shugen said that the recent report of the China Cotton Association shows a mature regulation concept: the price of cotton does not increase. Farmers cannot increase income. Contusion planting enthusiasm, affecting cotton production next year; but rose too high too fast, unbearable textile companies, high prices bring high risks.