Textile Enterprises Are Trapped In Heavy Encirclement &Nbsp; &Nbsp; Struggling For High Cotton Prices.

This year, cotton has been skyrocketing and constantly refreshed its highest record in nearly 10 years. In October 9th, China's cotton price index was 22900 yuan / ton in the spot market, up 190 yuan / ton compared with the previous day. On the futures market, Zheng cotton 1105 contract continued to rise on the 8 th and continued to rise, up 6% from the previous trading day.

The sudden rise in prices has a great impact on our textile industry.

Many textile enterprises are worried that if we go on like this, our textile industry will fall into a large area of production reduction or stop production. The prospect is worrying.

The textile industry, which has just come out of the shadow of the financial crisis, is in trouble again.

Reporters in Sijiqing wholesale clothing market, around the North small commodity markets and other wholesale markets around Hangzhou found that the wholesale price of autumn clothing is rising this year, the general increase of more than 10%, even with cheap and attractive Taobao online.

330 National Road Lanxi Yongchang Road, hundreds of offices from all over the country cotton yarn factory, recently business is particularly busy, from time to time before the door of the truck carrying cotton yarn in loading and unloading cotton yarn.

A cotton yarn salesman said, because of the rise in cotton prices, some time ago, customers are still on the sidelines, but the trend of these two days has made many customers unable to sit still.

Local textile enterprises have doubled the purchase of cotton yarn to reduce the impact of price increases.

As the textile industry in the early stage is getting warmer and faster, and the industry is booming, the inventory of domestic textile enterprises is also at a low level.

"Similarly in Lanxi, the inventory of textile mills is currently in the range of half a month to a month."

Zhang Shugen, President of Lanxi Textile Association and director of Yunshan textile company in Zhejiang, said, "the continuous boom in cotton prices has caused many local textile enterprises to panic."

The most likely impact of this increase in cotton prices is export oriented textile enterprises.

Ye Xiandong, chairman of China Chamber of Commerce for children's wear and chairman of Hong Huang Lan children's wear company, said that in addition to the cost of cotton, the recent appreciation of the RMB against the US dollar has further aggravated the plight of the textile industry, which was originally in a small profit.

From cotton to clothing, the price seems to have spread to the entire industrial chain, and even the prices of related chemical fiber products have also increased significantly.

Consumers and businesses hope that prices will return to their limits.

Zhang Shugen analysis believes that this round of cotton price rise is driven by many factors.

According to the China Cotton Association Bulletin, in addition to factors such as fertilizer, pesticides, seeds and other cotton growing costs, this year's planting delays and meteorological disasters have a certain impact on cotton yield. The purchase price of cotton is definitely higher than that of last year; on the other hand, after the financial crisis, foreign orders surged, cotton demand increased greatly, and cotton production and demand gap appeared, thus prompting cotton prices to rise.

The change of international cotton supply and demand also has an impact on domestic cotton prices.

According to reports, the main cotton producing areas in the world are affected by disaster factors, production is down, India has reduced cotton exports, and the low US dollar has driven cotton futures prices higher. These superposition factors have boosted China's cotton prices.

In addition, the rise in cotton prices has also caused the speculation of idle capital and the reluctant sale of cotton farmers.

The state has adopted dumping and storage to solve the problem of short supply.

According to statistics, from August 10th to September 25th, the central reserve cotton has sold a total of over 540 thousand tons of reserve cotton. The Chinese cotton textile industry association also announced on the website 26, the state decided to continue to put 400 thousand tons of state cotton into the market in order to ensure the demand for textile production.

Despite so many initiatives, cotton is in a tight supply situation and no one can tell when cotton prices will be callback.

Where does the enterprise go from {page_break}

"Cotton prices have risen by more than 20% in a few days, which is too fast and too far behind to digest. The pressure of textile and garment enterprises will be great."

Ye Xiandong said.

In fact, the problem has already appeared: ye Xian Dong has recently received news from many textile and garment enterprises, because of the huge cost pressure and price instability factors, they can not accept the medium and long-term orders of their enterprises.

Similarly, many textile enterprises in Lanxi, Shaoxing and Xiaoshan are very cautious about orders from home and abroad.

"In addition to stepping up the completion of orders, many enterprises have temporarily abandoned new orders."

Ningbo textile enterprises responsible person said.

Some enterprises are actively taking countermeasures.

Zhejiang Yunshan textile company has adjusted its product mix to increase the proportion of chemical fiber fabrics and effectively reduce production costs.

Zhejiang IIF Textile Co., Ltd. signed the annual contract at the beginning of the year, basically locked the price of raw materials, and now sales and profits are all normal.

Zhuji's clean and elegant group has invested in the cotton producing area to establish a cotton production and processing base, and integrate the industrial chain to reduce the fluctuation of raw materials.

But for most textile and garment enterprises, what can be done at present can only wait for this storm of price rise.

"Cotton rise is a long-term trend, but the key is to proceed steadily, otherwise, it will not benefit the upstream and downstream."

Zhang Shugen said that the recent report of the China Cotton Association showed a mature regulatory thought: cotton prices did not rise, cotton growers could not increase their income, dampen planting enthusiasm, and affect cotton production next year; but too high and too fast, textile enterprises could not bear it, and high prices brought high risks.