Cotton Prices Plummet, Sting Millions Of Tons Of Cotton And Lose Billions Of Dollars.

All kinds of grief and joy are you - cotton prices, which is the common feeling of the textile industry.

Climbing from last year's profits to ten years high, textile enterprises are in high spirits, and this year's cotton prices plummet.

Some large enterprises have tens of thousands of tons of cotton, there will be hundreds of millions of losses, small businesses can not afford to carry on, will naturally go bankrupt, which is more severe than the impact of the financial crisis in 2008.

Cotton is still there, not sad but not happy.

Millions of tons of cotton are lost.

Dong Huakang, chairman of Binzhou Hua Kang Textile Co., Ltd. recently had a bad mood. When cotton price rose last year, he ate hundreds of tons of cotton at a price of 30 thousand yuan / ton. Now cotton price has dropped 30%, and Dong Huakang has lost about one million.

Dong Huakang did not lose the most.

Yin Qinzu, deputy director of the small and Medium Enterprises Bureau of Xiajin County, the largest cotton producing county, said that most of the enterprises' stock purchase price of lint was over 28 thousand per ton, and the market in May 23rd had dropped to 23 thousand.

As a result, textile companies began to scramble for inventory.

On the morning of 24, the reporter arrived in Shanghe. Zhang Wenkui, deputy general manager of Qilu Hongye Textile Group Co., Ltd., is busy with meetings and scheduling.

"We produce about 1000000 meters of polyester cotton cloth every month, which is commonly known as Dacron.

Last year, customers came to buy cloth, and the price doubled.

Now, it's hard to sell.

The gross profit of one meter cloth is more than two yuan. A large enterprise in Shandong has reduced the price by 2 yuan at a time, and the price of the whole market has come down.

"Mr. Li, a large cotton yarn enterprise in Dezhou, said that last year many textile companies in Jiangsu and Zhejiang came to order when ordering.

Some cotton yarns must reach 15 tons before they are willing to sign, but this year there is hardly a list of more than 5 tons.

All this stems from the tango dance that cotton prices jumped out.

Zhang Wenkui said that since September last year, cotton prices have been on helicopters, from 14000 yuan to 34000 yuan per ton, when cotton was not easy to buy, but downstream customers also came to grab goods and orders were not allowed to open.

This year, cotton prices dropped from 34000 yuan to 22000 yuan. Cotton processing factories came to ask them to buy cotton, but they did not know how much cotton would fall to, and they did not dare to buy it.

"Last year was the best year for cotton textile industry in ten years.

This year, from the feedback of salesmen, half of the conventional cotton mills in Shandong and the South were closed down.

"

Zhang Wenkui said, "cotton prices are ups and downs, which is a disastrous blow to the textile industry.

This market is irrational, cotton farmers, spinning enterprises, downstream weaving factories, garment factories, printing and dyeing factories are busy storing cotton and cotton yarn.

Now, the lie of the cotton gap has been shattered.

Cotton price decline has reached as high as 10 thousand yuan / ton.

Some large enterprises have tens of thousands of tons of cotton, there will be hundreds of millions of losses, small businesses can not afford to carry on, will naturally go bankrupt, which is more severe than the impact of the financial crisis in 2008.

"

Abandoning the contract rate to 30% parts, enterprises have no choice but to stop production.

25, when the reporter contacted Xia Zhilin, President of Shandong Textile Industry Association, he was busy with the meeting.

"The fall in cotton prices has a great impact on the textile enterprises. We have sent two teams of people, led by vice presidents, to all provinces and municipalities for urgent research.

"

Shandong's cotton textile production capacity ranks first in the country, and the impact on cotton prices is certainly small.

"The production of textile mills is cyclical. In general, cotton is stored for about 3 months. The average price of the original cotton is about 29000 yuan / ton. Now the production will obviously lead to losses.

Customer orders are all up and down, and now the market is sluggish; even if orders are placed, they must be taken late.

Xia Zhilin frowned and worried.

"Cotton spinning enterprises in the whole province, especially small and medium-sized enterprises, are in great difficulties. Some enterprises are in a state of shutting down production, limiting production or partially stopping production.

"

This is not the whole problem.

According to the China cotton association responsible person, two months ago, the phenomenon of Cotton Traders' abandoning the agreement has begun to emerge.

Jiang Xingchun, an analyst with grain futures, said that the default rate of imported cotton trade was about 20% in March this year, and the default rate for orders arrived in Hong Kong in May and June this year has risen to 30%.

"Bangladesh is gone.

Mou Dehong, vice general manager of Qilu Hongye Textile Group Co., Ltd. has just experienced such a thing.

Bangladesh's customers have difficulties. Even if they deliver the goods, they may not be able to pick up the goods. Dehong decides not to take such risks.

Tian, a Shandong cotton import and export company, said they had encountered similar problems. Bangladesh's customers delayed the delivery time by three months.

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News from this spring's Canton Fair also shows that this year's

Jia Fengmei, President of Ji'nan textile and garment industry association, is 65 years old. He has experienced the ups and downs of textile industry from planned economy to market economy.

"China adopts import quotas to control the cotton market.

In the quota processing trade does not collect taxes, the general trade receives 1%-5% sliding tax; the quota outside the highest must pay 40% sliding tax.

You know, the competition of Chinese textiles in the world depends entirely on the market, but raw materials are controlled by the state.

One is the planned economy and the other is the market economy. This is also a reason for the rise and fall of cotton prices.

It is the general trend to abolish the sliding tax and give full play to the fundamental role of market allocation of resources.

"

Diversification and differentiation, and enterprises' ability to resist risks

Although the situation faced by the whole industry is not optimistic, the impact of different enterprises is quite different.

Xia Zhilin said that the small and medium sized enterprises which are mainly pure cotton have been greatly affected, while the enterprises mainly developing the blended products and the large enterprises with spinning and weaving and deep processing are less affected.

"The reason is very simple, single product, single raw material, naturally always led by cotton nose.

"

Some shrewd enterprises have embarked on the road of diversification and differentiation, and production and inventory are relatively normal.

Zhang Wenkui said that Qilu Hongye has taken the lead in this regard.

"Conventional product homogenization competition is big, we are doing is blending, no big road goods, order production.

Relying on the strength of science and technology, taking the road of differentiation, increasing the added value, and increasing the enterprise's ability to resist risks.

For example, we used cotton spinning equipment to spin wool, linen, silk and velvet to achieve technological breakthroughs.

The cost of the woollen goods we spin is 10 thousand yuan lower than that per woollen mill.

"

Dezhou Heng Hua Textile Co., Ltd. has also embarked on a diversified approach.

In the past, it only made pure cotton. At present, polyester has accounted for 1/3 of raw materials and developed new fibers such as soybeans, corn, milk, pearls and so on.

"This is the way we encourage at present to reduce dependence on the demand for single cotton.

We are guiding enterprises to extend to the upstream and downstream ends, such as home textile products, industrial alliances and industrial clusters.

The textile industry in Shandong has 2 million employees. This is not only a traditional advantage industry, but also an industry related to people's livelihood. It needs strong support.

"

Zhang Jianxin, vice president of Binzhou Textile Industry Association, said no matter what way to go, never follow suit.

Take cotton as an example. Cotton prices rose last year because people were hoarding cotton and artificially causing a shortage of cotton.

"The biggest loss this year, I think, should be speculation and hoarding of cotton middlemen at that time.

And experienced enterprises at high prices are more careful to ensure that the operation, not much cotton, will be less affected.

"

Zhang Jianxin said that cotton procurement must keep a clear head, understand cotton price law, global resources, seize the opportunity to purchase, do other things as well.