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The Cotton Industry Is Facing An Awkward Situation, And The Main Contradiction Should Be Grasped In Market Regulation.

2012/6/28 19:53:00 23

Cotton MarketCotton TextileLabor Cost

 

The cotton market involves multiple interests, and the most important is the interests of cotton producers and cotton users.

The concerns of other parties around the production and use link are the periphery of the cotton industry.


Cotton is the main raw material of the cotton textile industry, and the cotton textile industry is an important upstream part of the textile industry.

At present, the main contradiction between cotton regulation and control is, on the one hand, the excessive price difference between domestic and foreign cotton.

Textile industry

The advantages of the industrial chain can not be digested, resulting in the weakening or disappearance of the international competitiveness of the domestic textile exports. The import and export of cotton yarns and cotton cloth is heavily imported due to the internal and external price differences, making the cotton textile industry unable to bear the production and marketing balance of capacity and output (there is also a reason for the weak international market demand); on the other hand, it is cotton.

Production costs

And the purchase and storage price can not be effectively pmitted to the lower reaches, and the storage and sale of cotton can not be realized.

If the long-term average price in the international market is too large and too long for the current domestic purchasing and storage price, it will indirectly lead to overproduction of cotton in the world.


The above factors have caused the situation of cotton spinning in recent days: the price range of cotton at home and abroad has reached 5000 yuan (sometimes higher), which has affected the normal operation of the cotton textile industry.

If there has been such a big price difference before, the cotton textile industry has digested this disadvantage through the advantages of China's textile industry chain. So today, whether the industry chain can have such comparative advantage to resolve the industry contradiction need to be discussed.

In addition to the complete industrial chain, the former advantage is labor cost.

Capital cost

(foreign exchange rate), energy cost and scale efficiency, etc. nowadays, the comparative advantages of these aspects are almost no longer in addition to the complete matching of industries.

Under the competitive environment of other countries and regional textile markets, the advantage of China's cotton textile industry will not be effective if the price difference of cotton is too large. With the passage of time, the safety of the industry will be threatened.


The adjustment of cotton production link, in the final analysis, is how to adjust the price of cotton purchase and storage in China and the long-term price of the international market, and also needs a mechanism to perfect it.

On the one hand, the enthusiasm of cotton production should be protected. According to the price of cotton purchase and storage calculated according to the price of agricultural products, the producer thinks that the price of storage and purchase is not enough to reflect the production cost of cotton; on the other hand, the long-term price of the international market is far below our cotton purchase and storage price under the current cotton production and operation system.

At the cotton conference in Henan in early May, we once again proposed that the long-term average price of cotton in the international market (cotton futures) should be around 70 cents. If it is such a price, the cotton market in China should be pushed back and forth, and our cotton market needs a more complete mechanism to balance the production and use of cotton.

As previously mentioned, the relative long-term consistency of cotton market prices is the target of our regulation.


China's cotton purchase and storage policy is very timely and very necessary, and at the moment, it has a huge impact on domestic and foreign markets.

Predictably, if there is no major natural calamity, this year's cotton reserves will continue to increase in the present internal and external environment. This will also increase the means and intensity of our cotton regulation and increase our ability to control the international cotton market.

But at the same time, according to the change of cotton market price, we should use effective mechanism to maintain the competitiveness of the cotton textile industry in the international market and maintain the healthy development of the entire textile industry.

If the cotton textile industry is shrinking for a long time due to the difference in cotton prices, the cotton industry is bound to be hurt.

This is contrary to cotton purchase and storage and regulation policies.


In line with China's current policies and WTO commitments, policy adjustment should be flexible, and should be adjusted timely and appropriately to maintain the health of the upstream and downstream industry chain.

As long as the largest production and consumption market in China, we have the ability to do a good job in cotton regulation.

Of course, policy regulation should be predictable, and the parties in the market should be able to operate. Besides the weather and other sudden factors, the market stakeholders should be able to make a difference under the guidance of policies.

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