Textile Enterprises: Cotton Prices Skyrocketing And Slump Can Not Afford To Hurt

"Crazy."

Cotton price roller coaster fell 30% in two months

Shanghai Shen An Textile Co., Ltd., general manager Chen told reporters that from last year, "crazy cotton prices" began to rise from 15 thousand yuan / ton, in November last year after rushing to the 30 thousand mark, the price plunged sharply, once fell to 26 thousand yuan / ton.

From the end of last year to March, cotton prices continued upward trend back to 30 thousand yuan / ton mark, the highest to 34 thousand yuan / ton, and then fell back to 24 thousand yuan / ton again.

"Last year cotton prices skyrocketed, customers could not accept the price we offered, and began to reduce orders. Our orders could be placed in three months, and now it will only be 1 and a half months later."

General manager Chen told reporters, "cotton prices have begun to decline recently, and many customers are watching, carefully placing orders.

Textile enterprises generally have inventory of two to three months or so. Three months ago, the company bought cotton at the contract price of 33 thousand yuan / ton and 31 thousand and 500 yuan / ton. Now the price has dropped, and when the customer signs the contract at the current price, it loses five or six thousand yuan per ton. According to the usage of 300 tons of cotton per month, it is nearly one thousand tons in three months and loses millions of dollars.

Many people in the industry have said that for garment enterprises, it is difficult to withstand the sharp rise and fall of price quotas. Last year, a large number of small businesses were eliminated in the process.

The drop in cotton prices is due to imbalance between supply and demand.

For cotton roller coaster market, CIC consultant light industry researcher Xiong Xiaokun believes that the main reason is the decrease in cotton demand.

Many cotton enterprises have not been involved in the acquisition of cotton, and since last year cotton prices have been high and large quantities of stocks have been kept, enterprises have maintained more wait-and-see attitude. Second, in response to the high cotton prices since last year, many garment enterprises were forced to rise in price under the pressure of cost. Whether the consumers' purchase intention is still down after the rise in prices remains to be observed in the market. The market is still on the watch, resulting in the current lower demand shrinking, the reduction of orders and the reduction of cotton prices. Third, foreign buyers are turning their orders to countries with more cost advantages such as Sri Lanka, Indonesia and Vietnam, resulting in the reduction of export orders, and a large number of small and medium-sized foreign trade enterprises have to stop production, and the demand for cotton has sharply decreased. First, to avoid cause.

In addition, the industry also told reporters that domestic customers continue to develop new materials, seeking cost-effective alternatives such as viscose and polyester, which also led to a reduction in demand for cotton yarn this year.

Ma Wenfeng, an analyst with the eastern Agribusiness Consulting firm, told reporters that the world's cotton production is expected to grow at 27 million 500 thousand tons this year, an increase of 10% over last year's 25 million tons. The increase in production and the decrease in demand have further led to the downward trend of prices.

The market will further maintain a downward trend in the future.

For the future trend of cotton prices, the industry generally believe that the continued decline may be greater.

CIC consultant light industry researcher Xiong Xiaokun believes that from the market level, the sales peak season of textile enterprises is concentrated in the 3-4 months of the year, and this year, there is a continuous downturn in market sales, and the space for later growth has shrunk. From the national level, the inflation pressure is still continuing. The state will continue to take monetary tightening or other intervention measures. The domestic policy environment does not allow the price of cotton to rise significantly. In addition, the global cotton market has slipped due to the global economic development and various political factors.

Xiong Xiaokun pointed out that for brands, the decline of raw material prices means that the profit margins of enterprises will increase, and the frequency of various activities such as promotions will also increase, which will be better than those in the terminal market.