Since last year, cotton prices have experienced a trend of rising first and then falling. This year, cotton prices have risen sharply, making textile companies unprepared. With the increase of operating pressure, the home textile industry is facing a reshuffle, some small and medium-sized home textile enterprises may collapse, and the competitive advantage is more inclined to large-scale home textile enterprises. These enterprises have strong anti-risk ability, large profit margin and ability to digest costs. Also stronger
Since January this year, cotton prices in the international market have risen, leading to a continued rise in cotton prices in the domestic market. The price of cotton has risen since the beginning of last year and reached its highest value around October. After that, it was affected by the national policy of controlling cotton reserves, and began to fall back. It fell to the bottom of last month and was around 26,000 yuan/ton. Nowadays, the price of Xinjiang lint (the cotton under the picking is seed cotton and the lint is processed from the seed cotton) has reached 33,000-3.4 million yuan/ton, and the time has increased by 30% in the majority of the month.
Two main causes
The main reason for the rise in cotton prices is that inflation affects commodity prices. On February 15, the National Bureau of Statistics of China announced that CPI data for January 2011 increased by 4.9% year-on-year. Taking into account the official re-adjustment of the CPI weight ratio, the current CPI is still in a higher position, also shows that market inflation expectations are still there, and commodity prices will continue to be high.
On the other hand, in 2010, domestic cotton production was reduced in large areas, resulting in tight supply. According to data from the Cotton Research Institute of the Academy of Agricultural Sciences, in 2010, domestic cotton production in China fell by 14.6% to 5.7 million tons. In that year, China's annual cotton imports reached 2.84 million tons, accounting for 50% of the annual cotton production, an increase of 86% compared with the same period in 2009. Domestic cotton dependence on foreign countries exceeds 30%.
The latest offer from China Cotton Information Network: The price of lint in Shandong and Hebei is around 31,000-33,000 yuan/ton, which is basically the same as the cotton price in October last year.
Analysts said that due to the large-scale cotton production reduction last year and the lack of international cotton supply, supply and demand tension is still the most important factor. In addition, inflation and other factors have a significant impact on the price increase. The surge in cotton prices this year will be transmitted to the end market, and the price of finished clothing is expected to rise further this year.
Recently, the price of US cotton has also been rising, and cotton futures once rose to 2.0193 US dollars / lb, a record high. The correlation coefficient between domestic cotton futures and US cotton prices is about 0.956. As the US cotton price soars, domestic futures cotton prices also follow suit.
According to the US Department of Agriculture, the global cotton production in 2011 was 25.148 million tons, and the consumption was 25.387 million tons. In addition to the gap of 3.7 million tons last year, the supply of cotton this year is quite tight. At the same time, the demand for cotton in China is increasing. According to the statistics of China Textile Industry Association, the total industrial output value of textile enterprises above designated size in China has increased by more than 25% year-on-year in 2010, which directly drives the demand for cotton in downstream textile enterprises to increase rapidly. At the same time, in 2010, China's cotton suffered from low temperature, continuous heavy rainfall and other disaster weather, and its quality and output were affected.
Under the continuous rise of US cotton and new highs, domestic cotton futures prices also continued to rise and hit new highs. The cotton futures of the Zhengzhou Commodity Futures Exchange continued to fluctuate slightly after the opening bell, reaching a record high of 34,870 yuan / ton, and then fell back, but the positions continued to increase.
In the spot market, cotton prices also rose rapidly. Xinjiang cotton rose from 31,000 yuan/ton last week to 33,000 yuan/ton, and the overall market for lint (ie cotton fiber with cottonseed) rose by 1,500 yuan to 2,000 yuan/ton.
Downstream enterprises are under pressure
Since last year, cotton prices have experienced a trend of rising first and then falling. This year, cotton prices have risen sharply, making textile companies unprepared. Affected by cotton prices, the new round of raw material prices continued to rise, and the pressure on downstream textile and garment enterprises increased, especially for home textile enterprises, which was generally pessimistic about this year's market.
Affected by the price of raw materials, many textile companies began to raise prices after the Spring Festival. Analysts pointed out that there is a law in the home textile industry. When encountering inflation, consumers usually reduce their consumption of home textiles. Affected by the state's regulation of real estate, it will likely affect the home textile industry, which is closely related to real estate. This year's situation is not optimistic.
In addition, for the textile industry, at the beginning of this year, the “labor shortage†has led to a significant increase in labor costs, coupled with a sharp rise in raw material prices, which has put pressure on textile companies.
Industry experts said that with the increase of operating pressure, the home textile industry is facing a reshuffle, some small and medium-sized home textile enterprises may collapse, and the competitive advantage is more inclined to large-scale home textile enterprises, these companies have strong anti-risk ability and large profit margin. The ability to digest costs is also relatively strong.
Still have room to rise
Changes in cotton supply and demand in the Chinese market will have a greater impact on global cotton prices. At present, domestic supply is tight, and the fundamental factors of strong demand have a strong driving effect on cotton prices; in the international market, India, the United States, etc. The production and stocks of major cotton producing countries are low, and export restrictions are also expected to push international cotton prices higher.
Industry experts predict that there will be more than six months from the launch of new cotton in September, and there is still room for growth in cotton prices in the coming months. Cotton will be planted in mid-April, and cotton prices will rise, which is very beneficial to increase farmers' enthusiasm for cotton planting.
According to industry insiders, in the case of US cotton futures hitting record highs, the price of imported cotton rose sharply. As of February 17, the price index of imported cotton was 225.04 cents/lb, or 1% tariff was 37,506 yuan/ton; The sliding standard tax is 37,781 yuan / ton, which is much higher than the domestic spot price of the same level. Therefore, there is a large room for growth in the spot price of self-produced cotton in China.
Clothing prices will continue to rise
The rise in cotton prices has undoubtedly brought huge impacts on all aspects of China's textile and apparel industry and consumers. The rise in cotton prices will also drive up the price of alternative products such as polyester staple fiber. For textile and apparel companies, this means an increase in the cost of raw materials, which will put pressure on many companies, especially for those with low cost transfer. The business is very unfavorable; for consumers, it means that spending on clothing will increase in the future.
According to a person in charge of a clothing brand, cotton yarn is the main raw material for the production of cotton garments. However, since the beginning of last year, due to the increase in cotton prices, the price of cotton yarn has risen all the way, resulting in a general increase of 10%-20% in the price of spring clothing this year. Apparel production enterprises generally order the production of autumn and winter clothing this spring, and order the production of spring and summer clothing next autumn and winter. Now we are producing this autumn and winter clothing. Compared with last spring, the price of autumn and winter clothing has risen a lot. The cost of manpower and other increases, so the overall price of the apparel market this year is likely to continue to be bullish.
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