Beifang Enterprise is trapped in the price of cotton roller coaster

Since October last year, the price of cotton has experienced a “roller coaster” market that has experienced sharp ups and downs. Due to the drastic market conditions and sluggish demand, many textile companies are currently under increasing pressure and production and marketing rates have fallen.

Textile companies are cautious in purchasing "When cotton prices are high, we can't afford them." Cotton prices are low, and we can't dare to eat. Markets are buying and not buying, and now textile companies have a hard time." Duan Rongguo, manager of Ningfang Group Textile Branch, frankly stated.

Since October 2010, the price of cotton has soared. It reached the highest price in March this year and the price per ton exceeded the threshold of 30,000 yuan. However, from April onwards, the “high fever” price of cotton has “stepped down” quickly, and the situation that has turned so quickly has caused many textile companies to “be hurt”.

“Usually the factory has to spend 1 month of cotton, last year's storage in the warehouse is even enough for 3 months of production. But at present the cotton price dropped people's hearts, not much, and more, and maybe not even spinning into yarn. It was already lost money." Duan Rongguo said, "Now, even ten days of cotton in the factory are not worth blaming. How much to buy."

The decline in cotton prices has caused cotton yarns and cotton cloths to be unable to raise prices in the market, and their price declines are even larger than cotton prices. "Now some textile companies have lower finished product prices than cotton prices themselves," said the person in charge of a large textile company in Shijiazhuang.

It is understood that at the beginning of this year, the more common 40 yarns can be sold for up to nearly 50,000 yuan/ton, and the selling price is now only around 30,000 yuan/ton, and the price has shrunk by nearly 40%. Because the production of cotton spinning is cyclical, many cotton spinning companies adopt a cautious and conservative attitude in order to reduce the market risk brought about by the decline in cotton prices. Because the market is not optimistic, companies are buying cotton. Are more careful.

The rate of decline in production and sales ratios has generally fallen. In addition, under the influence of the international macroeconomic situation, the purchasing power of the downstream market is not strong, there is no follow-up support, and the pressure on textile companies has increased. Even for large-scale textile enterprises, the production and sales ratio has also shown a downward trend. "In the first nine months of this year, our production and sales rate was basically at 100%. Due to the lukewarm downstream market, the production and sales ratio for the past month or so has fallen to around 95%," said a large textile company official in Shijiazhuang.

Statistics show that the production and sales rate of textile enterprises above designated size in Hebei Province last year was above 90%, and it had dropped to 80% to 85% in the first nine months of this year, causing a backlog of cotton yarn and cotton fabrics; in September, the province’s textile exports volume Decreased trend.

The price of cotton and cotton yarn “divides” and “high and low output” has caused many companies to lose money. Duan Rongguo introduced that at present, the company pays 1,000 yuan to 2,000 yuan for each ton of cotton yarn it produces, but to stabilize old customers, companies can only lose hard-line support.

Survey shows that due to weak downstream demand, textile mills to maintain low lint inventory, the starting amount in the 70% to 80%, lint spot sales are not smooth, corporate procurement is prudent, both the purchase and sales of the maintenance of short orders, mainly to wait and see.

Accelerating transformation to resist risks "The company has a relatively stable production chain for textiles, printing and dyeing, and garment processing. However, facing the declining cotton price in the domestic and foreign markets, although internal shocks have been absorbed by some cotton price changes, companies have Still feeling a lot of pressure. For a relatively small single factory production, the days are even more sad." Duan Rongguo said.

According to a survey conducted by the Hebei Survey Corps on rural market markets in 12 counties and cities across the province, cotton picking was completed in the main cotton producing areas in Hebei Province in November. Cotton prices are expected to continue due to cotton prices being affected by last year's large price fluctuations. Low consolidation.

It is understood that shortening the production cycle has become the main means for many small and medium-sized textile companies to circumvent market risks. For some large-scale enterprises, accelerating their own industrial restructuring has become the main strategy for responding to cotton price fluctuations.

"The textile industry's per capita wage in 2010 was 20,100 yuan, which has nearly doubled since 2005, coupled with factors such as energy, transportation, and other factors, it is difficult to change the trend of cost increase in the textile industry. Only by accelerating the transformation can companies respond to changes in the market. Sun Weilun, chairman of the Hebei Textile and Apparel Industry Association, said that in the transition period, textile companies need to strengthen brand awareness, increase technological innovation investment, vigorously promote independent innovation, increase the added value of products, and increase the profitability of their products. And product quality, reduce the dependence on cotton, only in order to have a way out.