Why is the Mainland cotton company losing money?

In 2015/16, 90% of the cotton enterprises in the Mainland suffered losses, and the remaining 10% were mostly profitable. So, what caused the large-scale losses?

price drop. Since September 2015, the price of cotton in the Mainland has been “high and low”. Taking Shandong as an example, in September 2015, the mainstream price of 3128-class lint was 14,000 yuan/ton. With the arrival of new cotton, the price oscillated downward. In mid-October, the price fell to 13400-13500 yuan/ton, and by early November, the mainstream price At 13,000 yuan/ton. This year's cotton price trend caught many ginners off guard. A cotton company boss always said that before they believe that the cotton price will not be lower than 14,000 yuan / ton, the reason is that in 2015 the domestic cotton production was cut sharply, supply and demand aspects are still relatively optimistic, who expect the cotton price trend does not follow the common sense card.

Therefore, this year the cotton industry formed a vicious circle: cotton prices fell - cotton enterprises reluctant to sell - cotton prices fell again - cotton enterprises reluctant to sell - cotton prices continue to fall - a large area of ​​corporate losses, unable to return.

Xinjiang cotton impact. In previous years, most of Xinjiang's cotton flows into the interior, but it is not as aggressive as in 2015. The price aspect. Take 3128B lint as an example. As of January 14, the Aksu platform delivery price was 13,000 yuan/ton, which was shipped to Shandong and Jiangsu. The mainstream price was 13,300 yuan/ton (net weight, including tax). Compared to real estate cotton? On the 14th, Shandong Province's 3128B-level manufacturers took delivery of 13,000-13,100 yuan/ton, but the price difference between them was only 200 yuan/ton. Quality aspects. Still taking the 3128B class as an example, Xinjiang cotton, whether produced by a local cotton company or a Corps, has undergone notarization and inspection, and the indicators are excellent and consistent, and can be provided in large quantities. On the other hand, in real estate cotton, most of them are self-inspected by enterprises, and the consistency is poor. Some of the indicators are not up to standard, and mixed-level and mixed ones are common. Therefore, in 2015, the textile mills in the Mainland went to Xinjiang to see large goods and order cotton. Quantity aspects. It is understood that in October-December 2015, three months, Xinjiang cotton transported cotton to the Mainland through railways and highways, and the number of them reached 346,600 tons, 509,100 tons and 60,100 tons respectively, totaling 1,457,200 tons. Some people say that the 2015/16 mainland market is a country of Xinjiang cotton, and this is true.

In addition, most of the 400 enterprises in the Mainland rely on policy measures to build factories, and the acquisition of funds depends on the support of the Agricultural Development Bank. I have done a survey, more than 80% of the 400 enterprises in the Yellow River Basin "acquisition basically rely on borrowing, sales basically rely on." Taking Texas in Shandong as an example, more than 100 local 400-type enterprises can study the market, connect upstream and downstream, and take the initiative to attack. Most manufacturers are open to the acquisition of cotton on the market, after processing dozens of tons, hundreds of tons and then accounting costs, and then looking for buyers to sell, very passive.

In summary, most cotton companies lost money this year in 2015. They have both external environmental factors and their own causes. If cotton companies want to turn their backs on their bodies, they must also exercise their internal strengths and practice their internal strengths before they can win.