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Chinese Cotton Enterprises Are Alert To Foreign Capital Entering China'S Cotton Market

2010/10/14 22:13:00 73

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As a front-line worker in China's cotton enterprises, I would like to talk about some ideas about capital invasion here, hoping to share with you through your magazine.

Since the cotton industry entered the market operation in 2003, some of them have been restructured or not completely restructured.

Cotton enterprises

All of them worked hard.

From acquisition to processing to circulation, for a few months, it is like a midnight panic.

Most of the cotton enterprises have lost their money and know that they are still scattered in the mess.

The operation of cotton industry in China is like this. The past rule is three years, two years, and one year.

Now this rule is not valid. It can be said that there is no law in every year.

How can the fragile cotton business model withstand the baptism of ebb and flow?

However, foreign cotton giants have spotted the weaknesses of China's cotton enterprises, such as Ellen Bao, Cargill and other famous companies, first landing in Shandong, China's earliest cotton market.

They use skilled international game rules and abundant capital operation to buy some cotton enterprises on the verge of bankruptcy through financing, stock participation and spot supermarkets.

Over the past few years, it has gained huge market share, and has received generous returns, which has swept the North China Plain and the Southern Yangtze River Valley.

In recent years some local governments have been expanding

Attract investment

Efforts should be made to promote the steady development of local economy and bring the cotton industry into the catalogue of investment promotion, leading to frequent foreign investment.

It also brings trouble to the local government. Once the foreign capital is successfully introduced into the cotton industry, the local agricultural development bank will issue loans to him. The problem of market access has become a stumbling block for foreigners. Some of them have been withdrawn. Others have changed their faces to use a large amount of funds from the local agricultural development bank to make some local government officials miserable.

For example, the oppo acquired Baiyun, which has been scarred by the star enterprises on the Yangtze River for a year.

According to the forecast issued by the US Department of agriculture (USDA) in June 30th: 2010/11, the United States

cotton

The planting area increased by 19% over the same period, and the new flower production is expected to increase by nearly 40%.

China's cotton planting area increased by 0.56% from 2010 to 2011. The increase in the area of expansion was only in the Yangtze River Basin, and the impact of waterlogging in 6 and July was almost zero.

The cotton growing area in the the Yellow River River Basin was not affected by natural disasters. The medium term trend was good, but the planting area decreased.

The northwest inland cotton area, especially the Xinjiang cotton area, is affected by the low temperature at seedling stage, and the influence of medium term waterlogging is decreasing.

To sum up, cotton production in China will not be a problem as long as there are no major natural disasters in the late autumn, and last year or even more than last year's total output. According to the USDA report, in 2010, cotton consumption in China was estimated at 10 million 670 thousand tons, with a total output of 7 million 180 thousand tons, with a considerable gap.

Foreign cotton giants make full use of this point and deliberately seduce the domestic cotton prices. This is a topic worthy of consideration by our policy-making departments and people in the industry. We must never repeat the tragedy of China's cotton enterprises such as soybeans and oils and fats.

This year is the last year of the new system cotton processing enterprise renewal, which brings serious challenges and give to our new system enterprises.

First, with the increase of processing speed, enterprises can hardly afford to say no, and they also compete for resources for price wars, and increase the cost of raw materials. Secondly, big waves and sudden price fluctuations make it difficult to turn around and easily run aground, unlike the small plant mechanism. Third, the raising of the loan threshold of the agricultural development bank brings great problems to the financing of cotton enterprises.

China's cotton enterprises are facing difficulties, and it is also a good space for foreign capital to enter China's cotton market. It is exactly what they expect. Once the capital of the big crocodile enters, they will take the opportunity to make waves, manipulate the global cotton market, control the entire Chinese cotton market, and make the profit margins of these new cotton enterprises unprofitable. China, after 6 years of new institutional reform, will be lost in a few months.

Opportunities and challenges exist at the same time. As long as China's cotton enterprises are in the same boat and grasp the pulse of the market, they will be able to get out of the difficulties and make a beautiful turnover.