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Domestic Cotton Spot Price Reached 20644 Yuan / Ton, A Record High.

2010/9/28 23:31:00 84

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In September 26th, domestic cotton spot price of 328 spot reached 20644 yuan / ton, a record high cotton price, which rose 58% and 38% compared with the same period in 2009 and early 2010.

For cotton spinning enterprises which account for more than 60% of the cost,

Cotton price

The high level will force the profits of enterprises to enter a difficult "walking wire" era.

An industry researcher analyzed: "according to the industry's average calculation of gross margin of 12% or so, the cotton price increases by 1%, and the gross profit margin of the enterprise decreases by 0.53%."

The industry generally believes that the tight supply and demand of cotton is the fundamental factor in the rise of cotton prices.

CITIC Securities researcher Li Xin believes that at present, the global cotton supply has not been optimistic, but the demand for textile and clothing is obviously higher than expected.

Taking China as an example, the export volume of textile and clothing increased by 24% in the 1-8 months of 2010, and the recovery of global clothing consumption is evident.

It is reported that several well-known international cotton forecasting agencies recently revised 2010/2011

Global cotton

Supply and demand forecast data: cotton supply further widened year-on-year decline, cotton demand year-on-year growth rate further increased, prompting 2010/2011 global cotton "inventory and consumption" is expected to decline to a few decades low.

Take the ICAC forecast as an example, its cotton supply in the 2010/2011 year decreased by 6.6%, the demand for year-on-year growth increased to 4.68%, and the inventory consumption ratio dropped to 36%, reaching a 21 year low.

"At present, the cotton price at such a high level has greatly weakened the enterprise dynamics to overcome the cotton price fluctuation ability, and the cotton spinning enterprises in the late stage are losing their profits."

Li Xin said.

In this regard, cotton spinning enterprises generally overcome in three ways.

Cotton price fluctuation

The first is to change the cost through the adjustment of product price. Second, judging the adjustment of stock based on the later cotton price. If we judge the price of raw materials in the later period, we will stock up the stock. Third, increase the proportion of substitute varieties, such as increasing the use of viscose fiber and polyester fiber.

The survey found that in the recovery process of textile and garment exports in 2010, the price of products in the industry generally increased by 5%-15%, and the data showed that cotton prices rose nearly 40% compared with the beginning of the year.

Cotton generally accounts for 60%-70% of the cost of cotton spinning enterprises. If we want to pfer the cost, we will consider the demand, exchange rate and other factors comprehensively.

It is understood that many cotton spinning enterprises at the end of 2009, a large number of low-priced cotton and cotton yarn stocks were hoarded, and this part of the enterprises will benefit from this increase in cotton prices.

But up to now, most of the low priced cotton stocks have basically run out, and the inventory level at the end of the 20 thousand yuan / ton historical high level has become a difficult problem for the management of cotton spinning enterprises.

From the perspective of substitute varieties, the ratio of cotton, polyester and viscose fiber used in the three main categories of cotton spinning in China is about 60:30:10.

After the rise of cotton prices, increasing the proportion of polyester and viscose fiber will become one of the measures to avoid risks.

On the other hand, this is bound to drive up the price of polyester and viscose fibers.

Under the current situation of high cotton prices, cotton spinning enterprises with cotton production capacity and cotton prices will be more competitive.