Cotton Prices Rise, Textile And Garment Industry Is Facing Adjustment

The continuous rise of cotton prices has pushed the pressure down to the downstream of the industrial chain. Some garment factories began to choose to suspend business or reduce production during the peak period of winter clothing production, and the textile and garment industry chain is facing adjustment.

In July 13th this year, the domestic 328 grade cotton spot rushed to a record high of 18373 yuan / ton, while in February it was about 5000 yuan / ton, and it rose to 260% in just a few months.

Wang Yisheng, a clothing trader in Hongkong, has dozens of cooperative garment production enterprises in Dongguan and other places. He told reporters yesterday that he has often encountered failing garment factories in recent months. "It is a headache. Almost all garment factories increase their prices every month. What we are facing is not only the problem of cost increase, but also the time of delivery and the problem of unstable quality. Some factories secretly pfer our orders to other small factories for failing to recruit workers or unable to digest the cost.

In order to deliver the goods smoothly to overseas buyers, we can only pay a high price for the factory to guarantee production. "

Wang Yisheng said.

According to Wang Yisheng, cotton fabrics and other fabrics are also rising this year. For example, a pair of jeans for children's wear is only 70 yuan ~80 yuan, and only 50 yuan last year. Although the price increase is over 10%, and the cost of other links is reduced, there is no profit or even a loss of several yuan per piece. So we have to give up some of the orders. Recently, the jeans for children's wear have been reduced by 30%~40%, and the down garments have a certain profit.

According to statistics from the General Administration of Customs of China, clothing exports in June were 53 billion 230 million US dollars, an increase of 16%, an increase of 2.9 percentage points over the first 5 months (the same below), and export of textiles, yarn, fabrics and products 35 billion 650 million US dollars, an increase of 32.3%, an increase of 2.6 percentage points.

Although the export of textile and clothing is still showing growth momentum, the continuous increase in orders does not make the whole industry out of difficulties.

According to press reports, there are already many small garment factories in Dongguan.

The situation in the Yangtze River Delta is no more optimistic than that in the Pearl River Delta.

Lin Yan, manager of the cotton textile department of Hangzhou light industry craft textiles import and Export Co., Ltd., said yesterday that orders are still numerous. It is estimated that the export growth will be maintained by October this year. But behind the growth of the data, the actual operation of the enterprises is very bitter, the price of orders is generally not good, the profits are getting thinner and thinner, and many factories around have already been in the predicament of losing money.

Experts in the textile industry say that cotton suppliers and cotton mills have made full profits in the first half of this year because cotton textile suppliers and cotton mills have warmed up. In the past six months, the rising cotton cost has been successfully pmitted to the downstream garment enterprises, but it is estimated that the performance of the first half of the year will be difficult to continue in the second half of the year.

At present, some garment enterprises, especially export garment enterprises, have reached the limit of rising costs. If they can not continue to increase their prices to overseas buyers, clothing enterprises will gradually close or reduce production. This will affect upstream enterprises and push cost pressures onto upstream enterprises.

"Enterprises are looking forward to the new cotton harvest, hope that in August overseas new cotton and September domestic new cotton listing, can alleviate the raw material cost pressure, but it is not good to judge," the expert said, "enterprises should increase the value-added of products to price the buyer to digest cost pressure."

Lingfeng, President of global market group, said that a pair of jeans of the same quality, the domestic factory price was 5 dollars, while in foreign countries it could sell for 99 dollars, about 5 times the difference, and most of the profits were earned by overseas buyers.

In order to get higher profits, Chinese enterprises have to compete for pricing power. The rapid development of e-commerce has created such an opportunity for Chinese enterprises. China can attack and form a group brand. Through innovative network sales mode and one-stop supply chain management mode, the M2C (Manufacturer to Consumer) mode of manufacturing directly facing consumers can be realized, and the pattern of excessive reliance on OEM OEM production of Chinese manufacturers will be broken.