Cotton Textile Industry Is In The Predicament Of The Whole Industry Chain &Nbsp; Spinning Enterprises 60% Stop Production And Limit Production.

Continuous contraction

Economic Herald reporter recently in Dezhou cotton textile industry important gathering place survey found that the cotton textile industry is in a dilemma of the whole industry chain: cotton prices continue to fall, and gradually close to the cost of seed cotton; spinning enterprises in the high inventory inventory let it gasp for breath, price upside down, let more than 60% of the spinning enterprises in Dezhou area fall into production stop production situation; domestic and foreign consumer market is sluggish, Southeast Asian low cost countries intensified competition, weaving and clothing industry is also not optimistic, stop production and limit production situation is also widespread.

Cotton price roller coaster

Dezhou Cotton Association Deputy Secretary General Ma Junkai guide newspaper reporter, cotton prices began to rise in the beginning of last year.

By September, with the new cotton entering the market and the relatively large gap in domestic cotton, cotton prices have entered a climax. Cotton in Dezhou has risen from 18 thousand yuan / ton to 32 thousand yuan / ton.

After the Spring Festival this year, cotton price is still over 30 thousand yuan / ton, but from the end of February and early March, cotton prices suddenly began to decline sharply, and by the end of April, it had dropped to 24 thousand yuan / ton, and so far, there has been no effective rebound, and prices are lingering low.

Cotton prices are going up and down, which is a big headache for cotton farmers.

In recent years, cotton was basically bought at the end of April, but this year the situation is different.

"Cotton farmers wait and see.

In the process of rising prices, cotton growers look forward to higher prices. As prices fall, cotton growers feel that they are so high in their early days, and now they are selling losses.

Ma Junkai said.

Therefore, although late June, cotton farmers in Dezhou still had about 20% cotton not sold.

Cotton prices are severely depressed by the sharp drop in cotton prices.

"Cotton production costs were higher last year due to cotton production reduction.

Compared with grain production, the replacement cost of per kilogram of seed cotton in Dezhou area is between 4.4 yuan and 4.5 yuan, and the price of seed cotton is 4.7 yuan / jin to 4.8 yuan / Jin, which is close to the cost price of seed cotton.

Ma Junkai said.

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Two ends of yarn enterprises under pressure

The price of cotton has been severely weakened, and the life of the spinning enterprises is much worse.

They even think that the price of cotton is not enough, or too high.

Xiajin run Tong Textile Co., Ltd. (hereinafter referred to as "run Tong Textile") is a small and medium-sized spinning enterprise with 20 thousand spindles production lines, employing more than 300 people.

The company's general manager Tian Lianchen guide newspaper reporter said, the product quality of the enterprise is relatively high, and cotton needs to be imported from the United States.

At present, the United States imports cotton to Hong Kong at a price of 26 thousand yuan / ton, and the cost of spinning is 37 thousand yuan / ton, but the price of its products is only 34 thousand yuan / ton, and 3000 yuan per ton.

Therefore, since last month, Ru Tong Textile has been completely discontinued, in order to reduce the amount of loss.

But even so, there are still some sales pressures.

Because the company has more than two months' inventory before the shutdown, there are still more than a month's inventory.

The situation of run through textile is not an isolated phenomenon.

At present, more than 80% of the spinning enterprises in Xiajin area stop production and limit production, and more than 60% of the spinning enterprises in Dezhou also stop production and limit production.

Tian Lianchen said.

The situation of Xiajin Yuanfeng Textile Co., Ltd. provided evidence for Tian Lianchen's statement.

The company is also a small and medium-sized textile enterprise. Zhao Zhongfeng, general manager, told reporters at the herald that the company now reserves 50% of its capacity. The current production and marketing situation is about 1500 yuan loss per ton of production, and the loss per ton in the early stage is even larger, at around 7000 yuan.

"But now, the company does not want to stop completely, because it will be difficult to recruit workers after stopping.

But if this situation persists for a long time, the company will also have to consider a comprehensive shutdown.

What is surprising is that when the price of cotton rose last year, the spinning enterprises made a lot of money.

Ma Junkai told the guide reporter, "last year is a good market for spinning enterprises that has not been seen for many years, and every enterprise has made a lot of money."

Tian Lianchen also admitted that "from 1 to October last year, the profitability of enterprises was considerable."

The cost of cotton has dropped this year. Why are the days of spinning enterprises even more sad?

One of the reasons for Ma Junkai's analysis is that spinning enterprises have to store part of cotton in order to maintain normal operation, usually two months.

In the cycle of rising cotton prices, even without production, the increase in the price of cotton can also generate considerable profits.

But in the down cycle, the cost of cotton in the early stages of the enterprise is very high and becomes a burden.

On the other hand, the sharp decline in product prices is also an important reason.

"Downstream weaving and clothing enterprises are trying to reduce prices. A flagship product of our company is priced at 41 thousand yuan / ton after the Spring Festival, and the price is now 31 thousand yuan / ton, which has dropped 25% in a few months."

Zhao Zhongfeng said.

So what happened to the weaving and clothing industry? Why did the price of yarn drop sharply?

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Consumer market sluggish

The latest figures released by the General Administration of Customs show that in 1-5 months of this year, China's textile and apparel exports totaled $88 billion 835 million, an increase of 26.55% over the same period last year.

At first glance, the export situation of textile and clothing is excellent, indicating that textile consumption is very popular.

But is this really the case?

Ma Jinxia, deputy general manager of the Sales Department of ST, the largest textile enterprise in Dezhou, explained to the guide reporter: "we should not just look at the surface data, but look at the back of the data.

The rise in export volume of textiles and clothing was mainly due to the rising cost of raw materials and other products, which led to a slight rise in volume.

Moreover, the export of the first 5 months is mostly from the end of last year to the first 2 months of this year, and the order situation in the last three or four months can only be gradually revealed in the next few months.

Moreover, from the sales amount, the export of textile and clothing also showed some signs of atrophy.

From the single month of May, exports of textiles and clothing were US $20 billion 338 million, an increase of 23.77% over the same period last year, down 9.76 percentage points from the 33.53% growth of the same period last year, which has slowed down considerably compared with the first 4 months of this year.

From the data of ring to date, the export of textiles and garments in May was US $20 billion 338 million, up by 2.33% compared with April.

In addition to the export situation is not optimistic, domestic consumption is not plague, let the weaving and clothing industry is also facing enormous pressure, small and Medium Enterprises Limited production and stop production phenomenon is also very common.

"For de cotton, the company has strong technical strength and high-end products, but similar to its enterprises, it is also faced with the challenges of market impact."

Ma Jinxia said.

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Is monetary tightening the root cause?

Besides consumption, textile and garment industries are facing other pressures.

From the domestic market, the industry has overcapacity and there is fierce competition among enterprises. From the international market, raw material supply, India's cotton market is rising obviously. In terms of production, the textile industry of Pakistan, Vietnam and other countries are rising, and the domestic cotton textile industry has gradually shifted its capacity.

Ma Junkai said, "the cotton planting area in India has reached 160 million mu, and the planting area in China is about 70000000 mu.

Although India's cotton yield is very low and its total output is not as good as ours, it is expected that India will soon surpass China and become the largest cotton producer in the world in the coming years.

"In the process of textile production and processing, the cost of labor in Vietnam, Pakistan and other Southeast Asian and South Asian countries is obviously lower. In addition, influenced by the appreciation of the renminbi and other factors, some orders from European and American consumer countries are moving rapidly to low-cost countries."

Ma Jinxia said.

Whether it is domestic overcapacity or the rise of foreign markets, it does not start today. Its long-term pressure on the domestic textile industry will be.

Then, what other reasons are there for the domestic cotton textile industry?

The reporter noted that in the hot cotton market last year, there were also hot products in the domestic market, such as "garlic you ruthless", "Ping" and other agricultural products. However, these once arrogant products encountered "Waterloo" this year, and prices fell steadily.

Obviously, this is not a coincidence. Financial market tightening may be the root cause.

"From the cotton spinning industry, whether it is cotton packing, processing, textile or futures market, it needs financial support.

Last year, the cotton market was hot. The most important factor was the speculation of market funds.

This year's price decline is a rational return of prices, and there are also financial factors in it.

Ma Junkai analyzed it.