Domestic and foreign cotton price difference of 6,000 yuan

As international cotton prices have been declining all the way, it has been the turn of some domestic textile and garment companies that have become uneasy, especially if the international market demand is soft. At present, the domestic price difference is about 6,000 yuan/ton higher than that of foreign countries, making these companies shout "lose" At the starting line."

Cotton trader Cao Xie Gui finally can feel at ease for the Spring Festival. He mentioned that he had made a small profit in the past year due to the stability of the cotton price, and the risks have been reduced a lot in a stable price system. In the past two years, the price of cotton rose and fell, breaking through 30,000 yuan/ton from 15,000 yuan/ton, and falling below 20,000 yuan/ton in another road. Once misjudgments were made, they lost a lot of money.

Costs of garment enterprises are high: “From the perspective of transactions, the current downstream cotton and garment companies have not received much stock, and they are all waiting to see. Most of our lints have entered the national repository and are difficult to sell in the market. We The time often runs to the old customers, looking forward to some shipments to us when the market recovers after the year.” Cao Xie Gui said.

China Stolen Cotton Company started the temporary purchase and storage of cotton for the year 2012 (September 2012 to August 2013) on September 10 last year. The closing price was set at RMB 20,400 per ton, an increase of RMB 600/ton over the previous year. This is the second year of the implementation of the temporary cotton purchasing and storage policy. In 2011, the country received a total of 3.12 million tons of cotton. It is expected that there will be more than 5 million tons of reserves in 2012.

Compared with cotton farmers, downstream apparel companies are significantly more pressure. Wang Yisheng, head of Lotte Garment Co., Ltd., said that the business is very light. In addition to the Russian market is still relatively normal, the orders of major markets such as Europe, the United States and Japan are falling, the domestic sales situation is also not good, oversupply, inventory pressure, did not dare to take a new one Difficulty in the operation of clothing companies, Guangdong, Foshan and other regions have closed a number of factories.

Wang Yisheng also said: “The domestic cotton price is a few thousand dollars higher than the one-ton price of cotton in the international market, and labor costs have also been rising. Since last year, the cost has increased by 30%. Compared with Southeast Asian apparel companies, we completely lost the price. The competitive advantage is increasing the strength of the design and hopefully can promote the market.”

Zhou Xiaonan, the deputy general manager of Ramada Line Industry Co., Ltd., also reflected that the market has not been optimistic since last year, and exports have fallen by about 6%. It is difficult to increase prices in the weak market, and the costs have risen all the way, which is a great test for enterprises. At present, overseas buyers have been waiting and watching. In view of the large price difference between cotton prices at home and abroad, the company adjusted its product structure, and more of it was producing polyester products.

The issue of cotton price difference highlighted that in 2012, China’s textile and apparel exports totaled 262.56 billion U.S. dollars, a year-on-year increase of 3.3%, and the growth rate was the lowest since 2010. Gao Yong, deputy chairman of China National Textile and Apparel Council, bluntly stated that the difference of about 6,000 yuan/ton cotton at home and abroad is an important factor affecting the operation of the textile industry.

Wang Qianjin, a senior expert in the textile industry, said that the domestic and foreign demand in the terminal market is not booming and cotton demand has shrunk, leading to a sharp decline in international cotton prices. Last year, the domestic cotton consumption was about 7.5 million tons, but it reached 10 million tons/year in the previous peak period. However, unlike the international market, there is a domestic reserve price support, and the cotton price is relatively stable, but it has both advantages and disadvantages, leading to domestic use. The cost of cotton is higher than that of overseas companies and they lose at the starting line. Some companies have gradually turned to the use of chemical fiber with the same price at home and abroad. In the past year, the growth rate of chemical fiber in China has been relatively high, and the market for about one or two million tons of cotton has been diverted.

Wang Qianjin believes that the current predicament of textile and garment enterprises is mainly caused by market demand. It is expected that the market will bottom out this year and the contradiction between the domestic and international differences in cotton prices will be eased.

Relevant data show that from January to November 2012, the total amount of textile and apparel imports by the United States and the European Union fell by 0.9% and 5% respectively, resulting in insufficient orders for Chinese export enterprises. At the same time, the spread of cotton prices at home and abroad has continued to increase, which has seriously affected the competitiveness of the cotton spinning industry chain. Affected by cotton spreads and production costs, international market share has declined. From January to November 2012, the proportion of China's textile industry in the EU and Japan's import market remained at a high of 73.2% and 40.1%, but decreased by 1.8% and 1.1% respectively from the same period of last year.

Gao Yong believes that the overall trend of the industry economy in 2013 will continue to maintain a steady growth trend, but at the same time the pressure on external demand, large cotton spreads, and rising production costs still exist. It is expected that the annual industrial economic operation will show a trend of stable growth before the beginning of the year. It will basically remain at the level of 2012 at the beginning of the year and growth is expected to increase gradually in the second half of the year.

Gao Yong pointed out that in 2013, the problem of domestic and foreign cotton spreads still exists. It is difficult for textile and garment companies to make adjustments by themselves. How to solve this problem at the policy level will become an important factor affecting the operation of the textile industry. However, the country has not yet formed this. Clear solution.