Cotton Prices Rise To Impact On Garment Industry &Nbsp; Textile Industry Calls For Opening Up Import Market.

Apparel industry

A series of recent adverse factors have raised the anxiety in the cotton market to a new level.

Pakistan, the world's fourth largest cotton grower, has suffered major floods and cotton production has dropped sharply. China, the world's largest cotton producer and importer, has been threatened by rain on this year's cotton harvest. India, the second largest cotton grower in the world, has not yet had a "thaw" sign so far this year. As for the world's largest cotton exporter, the price of cotton in the United States has risen by nearly 30% since August of this year and has broken through 1 US dollars per pound since the US Civil War.

"This is a bull market that is hard to stop."

Trapped in the imbalance between supply and demand, and after the unbalance of speculators entered the market, cotton prices rose sharply in the middle of 2009 and lasted for more than a year, surpassing the rise of industrial commodities such as crude oil and copper.

Now, under the joint action of the new wave of natural disasters, this wave of rising tide is testing clothes.

Data from the US Department of agriculture show that the ratio of global cotton consumption and consumption has dropped to its lowest level in 15 years. Obviously, it is not very realistic to rapidly increase cotton supply and replenish inventory in the short term. So how should we deal with this situation?

Further launch of the state

Further opening up the import market is the continuous call of domestic textile enterprises in recent years.

But the risk of this policy is that a large number of cotton imports will impact domestic cotton planting industry and threaten China's cotton industry. In the future, after the impact of overseas imports and the shrinking of China's cotton planting area, Chinese garment enterprises will be more dependent on overseas imports and lose part of the bargaining power.

In fact, the current "cotton dilemma" is a global problem. Not only is China short of cotton and the world is short, but the rapid increase in imports in the short term is also not realistic.

Perhaps a more effective way of operation is to adapt to the current momentum of development and borrow the raw material dilemma to open up the overall upgrading advocated by the domestic textile and garment industry in recent years.

According to past experience, whenever the external environmental pressure arises, successive changes are often internal.

At the moment when the textile and garment industry advocates the overall upgrading, the high price of cotton, the main raw material, will also provide an opportunity for upgrading the domestic garment industry.

It will help integrate the market, raise the threshold and eliminate the so-called backward production capacity in the industry. The increase of concentration will make the remaining enterprises get more resources, thereby increasing the input of high value-added work such as design, research and development.

Just as the Japanese manufacturing industry was trapped in the 60s and 70s of last century, when the cost of manpower was rising and the raw materials were raised, the fine production would be pushed onto the table. Similarly, the Chinese garment industry would also be able to upgrade the manufacturing industry as a whole because of the "bad" external environment.

In this process, the industry needs the correct and effective guidance from the government to provide financial, tax and other support for the upgrading of clothing technology, R & D, and so on, and the competition among enterprises will also evolve from "cheap competition" to high-tech technology, design strength and so on.

The high price of cotton should not be narrowly viewed as a one-sided, negative, single industry problem. From the perspective of the whole industry chain, cotton and downstream garment retail terminals are closely linked, and the pformation from the cotton field will likely ignite the overall upgrading of the fire.

The poor quality of domestic retail apparel and the current widespread complaints about quality defects will also be improved because of the "changes" in the upstream, and will eventually become "made in China".

At present, cotton prices are at a historical high level in recent years. With the advent of the autumn and winter clothing sales season, cotton prices will likely continue to record.

However, with a positive look, the rise in costs will enable Chinese garment manufacturers to seek profits in other areas, which will help the industry as a whole move towards high value-added areas.