Cotton Price "Roller Coaster" &Nbsp; Midwest Textile Industry Shift

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The crazy cotton market, which began in August last year, ended in April this year. However, more and more cotton processing enterprises, cotton mills, and even the textile mills are clearly aware that in the high cost era, only the cost of raw materials can be controlled to control profits.

Take the lead and move the whole body

From cotton cultivation to cotton picking, and then to the cotton mill processing, and then through the circulation of traders, spinning to the cotton mill, and then weaving through the light textile mill, and finally extended to textile and clothing, this is a long industrial chain.

In this industry chain, cotton is the beginning.

When cotton prices rose from 20 thousand yuan per ton to 40 thousand yuan per ton, the balance of the entire industrial chain began to tilt upstream.

"After the cotton boom, the upstream enterprises such as cotton farmers, traders and cotton mills have made more profits, while the profits of downstream textile processing enterprises and garment factories have been squeezed to varying degrees."

Lu Zheng futures cotton analyst Guo said.

In order to increase profit margins, downstream

It is understood that previously included

When the cotton industry soared all over the country in August 2010, the relevant departments had directed the spearhead to Zheng cotton, the Zhengzhou Mercantile Exchange, and accused the futures market of adding fuel to the speculators, but the industry called Zheng cotton a bad thing: during the same period, the US cotton rose more fiercely, but Zheng cotton only rose with the US cotton.

There is no denying the fact that although China is a big exporter of textiles, it is also a big importer of cotton.

According to public figures, in 2010 ~2011 cotton output in China was only 6 million 530 thousand tons, and the demand for cotton was strong, the gap was as high as 3 million 700 thousand tons. The huge gap between supply and demand could only be relied on imports, but China's 2 million 600 thousand ton import quota had a huge gap of 1 million 100 thousand tons from the shortfall of 3 million 700 thousand tons.

China's textile industry, which has no say in the pricing of cotton, has finally tasted the "bitter end" of the sharp rise and fall of cotton.

Beginning in April this year, the United States cotton began to plummet, followed by Zheng cotton. But by May, the price of American cotton was still higher than that of Zheng cotton, and the United States cotton was at a price of $28, 9 yuan per ton, while Zheng cotton was about twenty thousand yuan per ton.

"In March, cotton orders began to default, and the peak of the breach was probably in April, when prices fell most fiercely, because many orders were made before March, when cotton prices were above 30 thousand yuan per ton. If they were processed at the prevailing prices, they would surely lose money, so some enterprises chose to default."

Dong Shuangwei said.

Midwest great shift

In this round of cotton inflation, the most uncomfortable thing is cotton mills and processing enterprises in the middle reaches.

"A lot of processing enterprises are forced to join the ranks of hoarding cotton," Guo told reporters. "The average processing profit of a ton of cotton is only about 500 yuan. We can say that the profit is very small. But when they are processing, cotton prices rise, sometimes it is too late for stockpiling or price adjustment, so we have to lose money to do so.

However, the cotton that was hoarded by these processors was too late to start, and the plunge began.

"Hype is too fierce. It is too late to sell. The original stockpiling of one ton can achieve a profit close to 5000 yuan, and later net compensation of nearly 5000 yuan."

Mr Guo said.

In the current round of the decline in cotton prices, some people in the industry believe that speculation is excessive.

"Cotton prices rose sharply last year, and before the Spring Festival, textile, processing and traders began to hoard cotton, and cotton prices rose to mid February. Suddenly, textile orders began to decrease, and even in the peak season of textile industry, orders remained unchanged.

Some processing enterprises began to panic and could only sell them at a lower price. At this point, the downstream procurement kept on the sidelines and looked forward to lower prices, which resulted in the situation of cotton purchasing prices getting lower and lower.

Mr Guo said.

In addition, the lack of demand is also an important reason. Due to the rising cost of domestic labor, domestic textile enterprises have no competitive advantage over Southeast Asia and South Asia, and orders outflow. To date, the economic form of Europe, the United States, Japan and other countries is still not optimistic, and textile orders are beginning to shrink.

In this round of cotton market, the heavily losing light textile enterprises began to change their strategies and find another way out.

At the end of 2010, when cotton prices rose to 32000 yuan per ton, news came from Xinjiang that many cotton spinning enterprises began to invest and build factories in Xinjiang, the main cotton producing area.

According to the statistics of China Textile Industry Association in the first quarter of 2011, the pace of China's textile industry pferring to the central and western regions has been accelerating.

Among them, investment in central and western regions has increased significantly. Investment in 1~3 and western regions increased by 62% and 63% respectively this year. The proportion of investment in the central region increased by about 4 percentage points.

The change in the number of new projects is mainly reflected in the central region. In the first 3 months, the number of new projects in the central region increased by 8% over the same period last year.

"The Midwest is close to the cotton producing area, where enterprises can effectively control local cotton resources and control costs, and on the other hand, the labor costs in the central and western regions are relatively low, so the textile enterprises will move faster and faster to the central and western regions."

Dong Shuangwei said.