Inventory: Can Cotton New Deal Inject Vitality Into The Textile Industry?

The 3 year cotton purchase and storage policy that has been implemented will come to an end in 2014. In 2014, the state will no longer carry out the cotton purchase and storage policy, and will start a pilot project in Xinjiang for the rising Cotton Subsidy.

The purpose of national unified purchase and storage is to protect the interests of cotton farmers and stabilize the cotton market, but unexpectedly, the development of the matter deviated from its original intention. The state spent hundreds of billions of dollars to buy and store cotton farmers. As a result, cotton growers turned to other crops because of their small profits in cotton planting. The adjustment of sliding tax and the existence of "high levy and low deduction" in the industry also make textile enterprises feel "unfair".

In 2014, the new cotton policy seemed to bring a glimmer of dawn to enterprises. What are the views of the enterprises on the changes of these policies? Does the change of these policies bring confidence to the development of the enterprises? Cotton textile enterprises Listen to what they say.

Direct compensation for stable cotton planting area

Dumping affects market prices

Guo Jie 3542 China Textile Co., Ltd.

Although the current cotton purchase and storage policy has only been implemented for 3 years, the drawback of the policy has long been apparent. Perhaps the people who formulated the policy did not expect this policy to have such a big impact on the cotton textile industry. In 2014, cotton purchase and storage will no longer be implemented, and cotton direct subsidy policy will be started. Whether it is for textile cotton enterprises, cotton processing enterprises or cotton farmers, it is undoubtedly good news.

Especially for cotton enterprises, the cotton textile enterprises have long started to call on the state to implement cotton direct subsidy and abolish the current "expensive" cotton policy. Now these original aspirations have become a reality, but the specific implementation measures of Cotton Subsidy Standard and how to implement the plan have not been determined yet, hoping to reduce the consumption of intermediate links, directly subsidize cotton growers, and stabilize the cotton growing area which is declining in China.

One of the important consequences of the cotton storage and storage policy is the high cotton stock, 3 million 120 thousand tons of cotton storage in 2011, 6 million 500 thousand tons of cotton storage in 2012, and the cumulative turnover of cotton in 2013 is expected to exceed 5 million 500 thousand tons in the year, that is to say, over 15 million tons of the total storage reserves of the state storage in the last 3 years, plus the non statistical import of reserve cotton, and the stock of the state reserve stock can be seen as a spot. Excluding the estimated reserves of about 4 million 300 thousand tons in 2012/2013 and the ongoing dumping and storage, the State Reserve Stocks in 2014 still exceed 10 million tons. It is foreseeable that after 2014, the state will mainly focus on stock elimination, and the state reserve cotton will be the mainstream of market supply. Cotton throwing and storing is one of the main means of regulating and controlling market supply and stabilizing market prices. (Chen Pei)

　 Direct subsidy should be carried out step by step.

Dumping price is the key.

Zhao Wei, deputy general manager of Shandong Hongcheng Group Co., Ltd.

In the new year, the adjustment of cotton purchase and storage policy will have a great impact on cotton prices in China and the world. In theory, China's cotton prices will go down and integrate with the world's cotton prices. But the key depends on the quantity of China's cotton import quotas. If China greatly reduces the quota of imported cotton, and the export price of national cotton and cotton will remain at around 18000 yuan / ton, China's cotton price will not be substantially reduced, but the international cotton price will continue to decline.

Cotton direct subsidy is very good for cotton growers. The key is to step by step, not because the intermediate links will affect the effect of direct subsidy. Otherwise, the state will not be able to direct cotton farmers if they pay the money, and ultimately affect cotton farmers' enthusiasm for planting cotton. It is suggested that the direct subsidy policy be implemented at the same time in the whole country, so as to stimulate the enthusiasm of cotton producers and maintain the overall stability of the cotton planting area, so as to prevent the cotton production from going up and down in China.

In 2014, the national cotton auction price is the key, if maintained at 18000 yuan / ton, the Chinese cotton textile enterprises are still under great pressure. Since the state wants to supplement cotton growers, why not reduce it? National cotton reserves What is the auction price? We hope that the auction of state cotton and cotton will respect the law of the market economy and let the national cotton price be in line with the international market. The State Cotton store will continue to sell at a high price. The price of cotton will remain high in textile enterprises. The international competitiveness of Chinese textile enterprises can hardly be reached. Textile enterprises, especially spinning enterprises, will continue to fail. (Wang Zeshui)

　　 Import quota has not been released.

The policy is not good enough to enjoy.

Jiangsu Shuang Shan Group Limited by Share Ltd Xu Yuelin

The withdrawal of storage policy from the market means that domestic cotton prices will move closer to the market. The government's direct intervention in cotton price regulation through administrative means is beginning to move towards market regulation, which means that there is no longer the so-called reserve price reserve at home, and domestic cotton prices will depend on the international market and the difference between inside and outside cotton will be narrowed. At present, the domestic cotton price is far higher than the international cotton price far beyond 4000 yuan / ton, that is to say, the domestic cotton price in 2014 is facing great downward pressure.

However, cotton import quota system has not yet been released. In fact, some cotton textile enterprises have not enjoyed the favorable policies. All along, enterprises that can get the quotas of cotton imports can mean the use of low price cotton, but the enterprises that fail to get the quota can only use domestic high priced cotton, which causes unfair among enterprises. The production cost of enterprises using low cost cotton is greatly reduced, and the price competitiveness of products is stronger. The revision of this policy has not opened up the quota system of cotton imports, so the competition among enterprises is still a dispute over the price of raw materials.

Cotton throwing and storage in 2014 will still have some effect on cotton enterprises, because the standard price of the current throw and storage price is rated, and the final settlement will fluctuate according to the differential, so the cotton enterprises do not enjoy the low price in line with international standards. At the same time, due to the long storage time and storage conditions, the quality of cotton has also been damaged. Most of the enterprises believe that cotton degradation is obvious and the quality can not meet production needs. Therefore, for cotton textile enterprises, throwing cotton in cotton is not cheap in traditional sense. (Guo Yafei Xu Xiaolin)

　 Sliding tax to ensure market stability

There is a way to cope with "high deductions".

Jiangsu Zhong Heng Textile Co., Ltd. Yang Yonggui

In 2014, a certain amount of cotton imported from the cotton tariff quota continued to implement the sliding tax, and the calculation method of the tax rate was adjusted. The adjustment of sliding tax is closely related to the further tightening of imported cotton, which will have a certain impact on cotton price difference at home and abroad, aiming at improving domestic cotton production and reducing dependence on imported cotton, and will play a certain role in protecting cotton farmers' interests. But at the same time, many textile enterprises may increase the cost of raw materials, reduce the competitiveness of textile enterprises' export, and make the operation of enterprises more difficult.

For cotton enterprises, compared to the current 5000 yuan / ton inside and outside cotton price difference, sliding tax adjustment on import cost increase is limited, the market impact may not be very obvious. But from another perspective, some enterprises with insufficient quotas will have to face the competition and impact of the market, which will help eliminate some vulnerable capacity. Considering the regional distribution, area and yield of cotton planting, cotton prices will not be able to purchase cheap cotton according to the market rules. It is bound to adjust the industrial structure and improve the supply and demand relationship of cotton market.

China's current " High key and low deduction The phenomenon has great influence on cotton enterprises. It is suggested that the rate of "levy" and "buckle" should be the same. It is also necessary for enterprises to increase investment in technological transformation, improve technology, use more non cotton fibers, implement differential production, and actively choose non cotton fibers, such as producing high count yarns, and use compact spinning and siro spinning to meet market demand. On the raw materials, we should choose the special fibers such as modal, Tencel, bamboo fiber and so on, and develop new varieties. At the same time, conditional enterprises can transfer the enterprises, so as to reduce production costs and enhance competitiveness. (Guo Yafei Xu Xiaolin)

"High levy, low deduction" is a heavy burden.

Achieving balanced and profitable development

Liang Yongjun, Shandong Hualong Textile Co., Ltd.

The abolition of the cotton purchase and storage policy is replaced by the cotton direct subsidy policy. Cotton is expected to be priced by the market, which is much more reasonable. According to the cotton farmers in the Yangtze River and the the Yellow River River Basin, cotton is not much more profitable than wheat, corn and so on, but it pays twice as much labor. Therefore, the key to cotton growers is how to make cotton farmers benefit rather than cotton traders.

Judging from previous cotton sell-off, cotton prices will drop as soon as they are sold. There will also be a high volume of foreign cotton and a low turnover of domestic cotton. Generally speaking, it will not have a big impact on solving the difficulties encountered by the textile enterprises at present. But as an enterprise, in order to avoid risks, it will not buy in large quantities. More than 90% of Hualong's textiles are imported cotton, which is relatively small by internal and external prices.

At present, the high value-added tax of cotton textile enterprises in China has imposed a "high and low deducted" burden on enterprises. According to the current VAT system, the input tax rate of cotton procurement in China's cotton textile enterprises is 13%, and the product sales tax rate is 17%, which means that even if the cotton textile enterprises do not realize the value added, the cotton purchased will be sold at the original price and still bear 4% of the tax revenue. Cotton accounts for about 70% of the production cost of textile enterprises, and cotton enterprises are depressed. The price advantage of China's labor and raw materials no longer exists. Originally, the market competition is very difficult, the profit is very small, plus this unreasonable tax policy, so that the textile enterprises are "injured", to a certain extent, will affect the survival of the whole industry, and the atrophy of an industry will bring disastrous consequences. Therefore, it is suggested that the tax rate should be adjusted gradually. The first step is to achieve the entry tax rate of 13%, the output tax rate is 13%, the basic balance, and the second step to further tilt, so as to make the enterprise profitable, and avoid the phenomenon that all the textile products caused by the recession of the industry depend entirely on imports. (Yu Tang Yue)

Reduce intermediate links

Real benefits will be implemented.

The two regiment of the first division of Xinjiang production and Construction Corps

The two regiment of the first division of the Xinjiang production and Construction Corps is planting more than 14 acres of cotton every year, with an annual output of about 70000000 kg of seed cotton. Wang Qingan, the political commissar of the regiment, believes that the implementation of the cotton purchase and storage policy is not necessarily a bad thing for the two regiment, a Regimental Farm with more than 50 years of cotton planting. On the contrary, the two group can directly talk with cotton spinning enterprises to understand their demand for cotton quality, and further improve cotton planting, management, processing and other aspects of technology. At the same time, cotton inspection, storage and other links have been reduced to facilitate the withdrawal of funds and prepare for cotton production next year. But for cotton farmers with extensive cotton management, it may bring about unfavorable competition in the market.

Ma Yangui, director of Xinjiang alar Huamao Textile Co., Ltd., said that cotton direct subsidy has a positive effect on alleviating the high cost of planting, increasing the enthusiasm of cotton producers and stabilizing the cotton planting area. Otherwise, cotton direct subsidy, seed cotton purchase price reduction and cotton farmers' income increase will not be conducive to cotton production. In the face of the general trend of cotton throwing and storing, Ma Yangui was worried that the willingness to buy cotton spinning enterprises would drop, and the wait-and-see psychology was strengthened, resulting in a slowdown in cotton intention, so as to avoid the risk by adopting the intermittent procurement strategy with the use of purchase or the need for only a small amount of cotton replenishment.

"High levy and low deduction" bring extra burden to cotton enterprises and increase the operation cost of enterprises. Ma Yangui suggested: first, abolish the low tax rate of VAT completely, or adjust the applicable rate of cotton value-added tax to the same yardstick. The two is to support the cotton related enterprises, while increasing the VAT, at the same time, we must return the enterprises according to certain sales volume and promote the virtuous circle of the enterprises. The three is the 17% deduction for enterprises that use domestic cotton. Value added tax We should lower taxes on enterprises so as to enhance the market competitiveness of China's cotton prices and enhance the development of cotton industry. Four, according to the industrialization mode of "enterprise + base + farmer", we should reduce the intermediate links and put the benefits into the hands of enterprises and cotton growers.