Raw Material Prices Fell &Nbsp; Tight Capital And Hard Stock Costs.

In the near future, the price of cotton, yarn, grey fabric and other textile materials has declined considerably. However, the production and operation status of textile enterprises has not been greatly improved.

Experts interviewed by reporters believe that the "cumulative superposition" effect caused by unfavorable factors such as high price of raw materials, rising labor costs, tight money, and appreciation of Renminbi will have a great impact on enterprises.

The drop in cotton prices did not allow China's textile companies to concentrate on a higher cost.

They are even more worried.

Recently, the prices of textile raw materials such as cotton, yarns, grey fabrics and so on have declined considerably. However, the production and operation status of textile enterprises has not been greatly improved.

Experts interviewed by reporters believe that the price of raw materials is high, labor costs are rising, and money is tight.

Tight capital and hard stock cost

Since March of this year, China's textile raw materials, yarn,

Two months, cotton, polyester and short, and

Zhu Qinghua, a light industry researcher at CIC, believes that the main reason for the fall in cotton prices after March is adequate inventory and lower demand for downstream products.

As a result, spinning enterprises are facing not only the financial difficulties caused by high cotton prices, but also the large amount of inventory due to the sharp reduction in orders.

"As the capital chain tightens and inventories increase, the operation of textile and garment enterprises is likely to deteriorate."

Zhu Qinghua said.

Wu Weifeng, assistant general manager of Jiangsu Su Mei Da Light Textile International Trade Co., Ltd., told reporters that the raw material price reduction has no meaning for the original orders that have purchased fabrics.

He said that only those orders 1~2 months ago, because there is no purchase of fabrics, the price can be discussed, perhaps a little lower, and will get part of the profits.

According to Zhu Qinghua's understanding, textile enterprises' capital chain is disconnected from the two links of procurement and sales, and it is difficult for enterprises to recover funds.

The above situation is confirmed by the situation of Su Mei Da Light Textile International Trade Co., Ltd.

Wu Weifeng said that this year, the central bank raised the deposit reserve rate for the four time, and the interest rate of loans increased accordingly. The capital chain of textile and garment export enterprises was a bit tight.

Influenced by many factors, such as fluctuations in cotton prices, tightening of credit policies and various kinds of cost increases, the current sales of textile enterprises are not smooth, and wait-and-see attitude towards lint procurement is maintained.

So is Limited by Share Ltd of China spinning.

The company mainly produces and exports home textiles, bedding, fabrics and other products.

Qu Weihua, head of its department, told reporters that cotton prices might drop because of the estimated cotton price.

The national cotton market monitoring system released a report showing that as of April 11th, the yarn sales rate of textile enterprises was 84%, a decrease of 8.8 percentage points, the lowest level since September 2008. The number of stock days was 26.5 days, and the annulus ratio increased by 13.1 days, the highest level since March 2009.

Inflation is also damaging and losses are also lost.

Wang Qianjin said that the decline in raw material prices for enterprises, in the medium to long term, may reduce the cost of production and operation of enterprises, but in the short term, it may have a negative impact on enterprises.

Zhu Qinghua explained that cotton is the main cost of spinning enterprises, accounting for about 60% of the total cost.

Once the price of cotton fluctuates, the operation of textile enterprises will be greatly affected.

Wang further analyzed: "the fall in cotton prices will affect and affect the entire cotton industry chain."

Because the price trend is not clear, the enterprise will delay the purchase, affect the enterprise order and the enterprise profit, because the enterprise also has the cotton and other raw material stock.

If there is a chain drop in prices, this year's textile enterprises will face greater difficulties in making profits.

Cotton prices can neither rise nor fall.

For enterprises, the cost of rising prices has increased sharply, and profits have been cut.

Qu Weihua said: "in the first two days, the cotton price in Shandong has dropped to 22000 yuan ~23000 yuan / ton, which has been 5000 yuan cheaper than the original ~6000 yuan / ton, and the pressure on the cost of raw materials has been reduced.

Because it can't predict the price of cotton in the future, the company will purchase cotton in small quantities according to the order.

Although the order situation has improved, it has not improved much.

Because foreign customers are also waiting to see what the cotton price will go down to, and decide the order.

Wu Weifeng pointed out: "bargaining is a process of change, the price of raw materials has dropped, and customers will also keep the price down."

In addition, many cotton orders have been pferred to Bangladesh, India and other countries due to the availability of cotton and lower prices.

Accumulative superposition effect gradually reveals

Although cotton prices have seen a slight decline in recent years, the added value of products in China's textile and garment industry is low, plus labor costs rising, silver tightening and RMB appreciation. There is also a heavy inflationary pressure which makes Chinese consumers' consumption desire continue to decline, and domestic demand for textile and garment industry grows slowly, which is not conducive to improving the production and operation of textile enterprises.

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These factors will "accumulate and superimpose", and the pressure on enterprises will gradually appear.

Wang Qianjin said that from last year to the first quarter of this year, these factors have more and more obvious restrictions on the production and operation of the industry.

According to his forecast, the profit index of textile and garment industry will not be released in the first five months of this year.

"From the perspective of business operation, apart from exports, the growth rate of all basic indicators has dropped significantly, including profits, output and textile industry added value."

"The added value of textile industry in April increased by 5.9% over the same period last year," Wang said to reporters. "Last year, the data remained above 10%.

This means that the operating rate, output and profit of the textile industry are showing a slowdown and a downward trend. It also reflects the overall operation of the textile industry from one aspect.

The two quarter and the three quarter of this year will be a difficult period for textile enterprises. "

Zhu Qinghua believes that the overall export situation of China's textile and garment industry this year is worrying.

Despite the growth in sales volume, there are still many obstacles to the development of the industry.

"But the predicament of textile enterprises will not continue to deteriorate."

Zhu Qinghua said, on the one hand, cotton prices will tend to long-term stability. With the gradual increase of downstream demand, the profit margins of textile enterprises will be gradually released. On the other hand, because of the sparse rainfall in the Yangtze River Basin, this year's cotton planting may have an impact. It is estimated that the current cotton inventory will gradually be consumed, and cotton prices will continue to warm up.