The price of cotton is crazy. This is the most talked-about and discussed topic in the textile and apparel industry in the recent period.
Soaring data is before people. Domestic cotton prices jumped from 12,977 yuan/ton in the early 2009 period to 25,319 yuan/ton (as of October 22), a rise of 95%.
The industry judges that this height not only broke the high point in 2003, but also hit a record high since 1995.
Crazy cotton prices have caused a chain reaction in the industrial chain of cotton yarns, grey cloths, fabrics, and apparel manufacturing...
Relieve raw materials with high added value
Hot money speculation just magnified the demand, not the main factor in the rise in cotton prices The imbalance in supply and demand caused the price of cotton to rise In Sun Huaibin's view, the high price of this cotton price run is still due to the imbalance between supply and demand.
From the perspective of demand, with the recovery of domestic and foreign economies, there has been a good momentum of development in both domestic and foreign markets this year. According to statistics of the General Administration of Customs, from January to August this year, garment exports reached US$80.29 billion, an increase of 19%; exports of textile yarn, fabrics and products were US$49.51 billion, an increase of 32.3%. From the perspective of the domestic market, the data from the National Bureau of Statistics shows that from January to September, domestic retail sales of footwear, hats and needle textiles amounted to 400 billion yuan, a year-on-year increase of 24.0%. The domestic and foreign demand market has improved. Spinning orders have rebounded, driving the growth in demand for cotton. In addition, the introduction of relevant state policies has, to a certain extent, restricted the speculation of funds on real estate, and has caused domestic hot money to become more physical, such as mung beans and cotton. It is precisely this type of social capital that has led to an increase in demand.
"However, the speculation of hot money only magnified the demand, not the main factor in the rise of cotton prices." Sun Huaibin reminded.
“From the psychological point of view, cotton prices have made some companies eat in order to increase reserves, so that they can be thrown out in better market conditions. This mentality has also led to the increase in cotton prices.†Sun Huaibin said.
So what are the factors in the supply?
According to Sun Huaibin, due to the reduction of cotton planting area and the impact of climate, the cotton production has decreased compared with last year, and the delay in the listing of new cotton has also pushed up the price of cotton. For the international market, both cotton production and stocks are declining. India, as a larger cotton producer, controls cotton exports and reduces the supply of international cotton.
"The State Reserve has thrown 1 million tons of cotton, plus the imported cotton, this still can not effectively meet the demand." Sun Huaibin added.
What is the impact of soaring cotton prices on the textile and clothing industry?
In this regard, Sun Huaibin said that the increase in cotton prices led to the rise of cotton yarn, which makes cotton textile companies make more profits from cotton yarn. For example, 32% of the profits of the textile industry from January to August came from the cotton textile industry. That is to say, the rise in cotton prices has not had a direct negative impact on the upstream industry.
However, as we go further downstream, such as weaving, printing and dyeing, and clothing, although there are different levels of price increase at each stage, there are no cotton or cotton yarns. "That is to say, the cost of raw materials is more difficult to transfer, because the lower the cost of raw materials, the lower the proportion of raw materials that go downstream. Therefore, in the context of high raw material prices, the rate of differentiation of enterprises may increase. There is money to buy raw materials or Businesses that make reserves in advance can be maintained; on the contrary, the days are more sad."
To increase the added value is a fundamental way out so that the cotton price is undoubtedly more harm than good for the textile and apparel industry. Therefore, the rational and pragmatic response of the industry is the more central issue behind the “high cotton priceâ€.
Sun Huaibin pointed out that in terms of demand, there must be a rational choice for the investment in the cotton textile industry, and cannot emphasize the company's own needs; otherwise, it will increase the expansion of production capacity and virtually increase the demand for raw materials.
From the perspective of supply, Sun Huaibin also gave relevant analysis.
The first is to increase the planting area, but this is unlikely. Because for many years, the contradiction between grain and cotton has become more prominent.
The second is to increase unit production by science and technology investment. Although the industry has been working hard, it is not easy.
The third is to increase reserves.
Fourth, on the import side, Sun Huaibin hopes that the country can also relax.
In addition, Sun Huaibin made recommendations specifically for the textile and apparel industry. He believes that the industry must strengthen the development of alternative raw materials, that is, the key is to be able to add more non-cotton fibers, super-simulation fibers, and ultra-spun cotton fibers, which is also a strategic task for the development of science and technology in the industry.
"In addition to increasing the development of alternative raw materials, there is a particularly important way to resist the rise in raw material prices, that is, to increase the added value of products." Sun Huaibin also said that if it can use design, brands, channels, etc. The structure of value-added, so as to obtain market recognition, sell a good price, so that you can digest raw material costs or other factor costs.
It is worth mentioning that, in Sun Huaibin's view, circular economy is also a way to increase fiber. Specifically, cotton fiber products, including waste textile clothing, are reduced to fiber, reduced to cotton, reduced to polyester, and recycled.
A rise, seed cotton spikes pushed the price of lint prices to rise steadily, and the increase in yarn prices drove cotton prices to continue to surge upwards and downwards. Global inventories fell to a low point. The impact of cotton prices on high domestic cotton prices since 2009 can be roughly divided into Five stages.
In the first stage, the seed cotton spikes pushed up the price of lint steadily from September 1st to November 30th, 2009.
Due to the low temperature and rain in September 2009, Xinjiang, Shandong, Hebei, and other major cotton producing regions, which led to the expected sharp increase in China's cotton production, seed cotton purchase prices rose sharply in October, giving the domestic cotton price continued to rise enough power at the end of 2009. By the end of the year, the price of cotton rose to over 14,700 yuan, while the domestic price of Zheng cotton exceeded the threshold of 16,000 yuan. At this time, China's cotton production is expected to be around 6.5 million tons, and a significant reduction of 1.5 million tons or more.
In 2009, the purchase price of seed cotton climbed steadily. The highest purchase price reached 3.6 yuan/kg, and the mainstream purchase price reached 3.4 yuan/kg. Judging from the price trend, there has been no significant decline in cotton prices throughout the year, which indicates that the cotton industry in 2009/2010 has achieved good returns.
In the second stage, policy regulation will restrain the excessively high price of cotton from December 1, 2009 to February 28, 2010.
Due to the large increase in cotton prices in the early part of 2009, the country decided to sell 500,000 tons of state-owned cotton by the end of November 2009. On December 22, the government issued an import quota of 894,000 tons of cotton in advance in order to increase the market supply and curb the cotton prices that rose too fast.
Under the policy, fundamentals and regulatory pressure, the domestic spot cotton price maintained a stable pattern from December 2009 to February 2010. The price of Zheng cotton also fell from the high point of 16,600 yuan/ton to 15,200 yuan/ton, which is close to the spot price. price.
In the third stage, the increase in yarn prices drove the cotton price to continue to rush, from March 1 to June 30, 2010.
After the Spring Festival, due to the strong recovery of the global economy and the impact of China's hike in interest rates, companies involved in all sectors of the cotton industry began to replenish stocks that were lowered due to the financial crisis. At the same time, domestic demand has grown significantly under policy stimulus, and exports have continued to improve. Domestic yarn prices After the Spring Festival began to climb sharply, and drive up the price of cotton.
Although in May the government issued a document prohibiting speculative capital speculation and named cotton, there was no substantive policy for the rapidly rising cotton price. The cotton price continued to rise under the support of strong consumption. The large increase in the rate has supported the sharp rise in domestic cotton prices. As of the end of June, 328 spot cotton prices broke through the 18,000 yuan/ton mark, while the Zheng cotton September contract also reached 18,000 yuan/ton.
In the fourth stage, the demand in the off-season temporarily weakened and the cotton price entered the adjustment pattern from July 1st to August 30th, 2010.
In July, the textile market entered a late off-season. At the same time, due to the resumption of exchange reform on June 19, the export pressure increased and downstream demand weakened. Because textile companies have high profits, textile companies have started to sell cotton yarns, and cotton yarn has entered a downward trend. Affected by this, spot cotton prices also showed signs of falling.
The state began to dump 600,000 tons since August 10, and added another 400,000 tons to be thrown on September 26. This makes the market resources in the end of 2009 sufficient, demand weakened, cotton prices into a weak pattern. However, on the whole, the adjustment is not large.
In the fifth phase, global inventories fell to a low point, and cotton prices hit a historical high of 25,000 from September 1 to the present.
The accumulated 1 million tons of national reserve cotton have also been fully sold on October 20. Affected by the relationship between supply and demand and bullish psychological influence, **, electronic matching, stockpiling and spot prices have risen sharply. At present, the national reserve auction has risen above 24,000, and the spot three-level cotton price has exceeded 22,000 yuan overall. Break through the $1 mark and reach the highest level in nearly 15 years.
The number of cotton enterprises in various regions has gradually increased, and the purchase price of seed cotton is obviously higher than in previous years. The buying has already appeared, and the price has been raised from RMB 3.9/kg to RMB 5/kg. According to this calculation, the lint processing cost exceeds 21,500 yuan/ton.
Since the start of the new cotton year (as of September 28), the purchase price of seed cotton was more than 60% higher than the same period of last year, and the ex-factory price of lint cotton was nearly 70% higher than the same period of last year.
Soaring data is before people. Domestic cotton prices jumped from 12,977 yuan/ton in the early 2009 period to 25,319 yuan/ton (as of October 22), a rise of 95%.
The industry judges that this height not only broke the high point in 2003, but also hit a record high since 1995.
Crazy cotton prices have caused a chain reaction in the industrial chain of cotton yarns, grey cloths, fabrics, and apparel manufacturing...
Relieve raw materials with high added value
Hot money speculation just magnified the demand, not the main factor in the rise in cotton prices The imbalance in supply and demand caused the price of cotton to rise In Sun Huaibin's view, the high price of this cotton price run is still due to the imbalance between supply and demand.
From the perspective of demand, with the recovery of domestic and foreign economies, there has been a good momentum of development in both domestic and foreign markets this year. According to statistics of the General Administration of Customs, from January to August this year, garment exports reached US$80.29 billion, an increase of 19%; exports of textile yarn, fabrics and products were US$49.51 billion, an increase of 32.3%. From the perspective of the domestic market, the data from the National Bureau of Statistics shows that from January to September, domestic retail sales of footwear, hats and needle textiles amounted to 400 billion yuan, a year-on-year increase of 24.0%. The domestic and foreign demand market has improved. Spinning orders have rebounded, driving the growth in demand for cotton. In addition, the introduction of relevant state policies has, to a certain extent, restricted the speculation of funds on real estate, and has caused domestic hot money to become more physical, such as mung beans and cotton. It is precisely this type of social capital that has led to an increase in demand.
"However, the speculation of hot money only magnified the demand, not the main factor in the rise of cotton prices." Sun Huaibin reminded.
“From the psychological point of view, cotton prices have made some companies eat in order to increase reserves, so that they can be thrown out in better market conditions. This mentality has also led to the increase in cotton prices.†Sun Huaibin said.
So what are the factors in the supply?
According to Sun Huaibin, due to the reduction of cotton planting area and the impact of climate, the cotton production has decreased compared with last year, and the delay in the listing of new cotton has also pushed up the price of cotton. For the international market, both cotton production and stocks are declining. India, as a larger cotton producer, controls cotton exports and reduces the supply of international cotton.
"The State Reserve has thrown 1 million tons of cotton, plus the imported cotton, this still can not effectively meet the demand." Sun Huaibin added.
What is the impact of soaring cotton prices on the textile and clothing industry?
In this regard, Sun Huaibin said that the increase in cotton prices led to the rise of cotton yarn, which makes cotton textile companies make more profits from cotton yarn. For example, 32% of the profits of the textile industry from January to August came from the cotton textile industry. That is to say, the rise in cotton prices has not had a direct negative impact on the upstream industry.
However, as we go further downstream, such as weaving, printing and dyeing, and clothing, although there are different levels of price increase at each stage, there are no cotton or cotton yarns. "That is to say, the cost of raw materials is more difficult to transfer, because the lower the cost of raw materials, the lower the proportion of raw materials that go downstream. Therefore, in the context of high raw material prices, the rate of differentiation of enterprises may increase. There is money to buy raw materials or Businesses that make reserves in advance can be maintained; on the contrary, the days are more sad."
To increase the added value is a fundamental way out so that the cotton price is undoubtedly more harm than good for the textile and apparel industry. Therefore, the rational and pragmatic response of the industry is the more central issue behind the “high cotton priceâ€.
Sun Huaibin pointed out that in terms of demand, there must be a rational choice for the investment in the cotton textile industry, and cannot emphasize the company's own needs; otherwise, it will increase the expansion of production capacity and virtually increase the demand for raw materials.
From the perspective of supply, Sun Huaibin also gave relevant analysis.
The first is to increase the planting area, but this is unlikely. Because for many years, the contradiction between grain and cotton has become more prominent.
The second is to increase unit production by science and technology investment. Although the industry has been working hard, it is not easy.
The third is to increase reserves.
Fourth, on the import side, Sun Huaibin hopes that the country can also relax.
In addition, Sun Huaibin made recommendations specifically for the textile and apparel industry. He believes that the industry must strengthen the development of alternative raw materials, that is, the key is to be able to add more non-cotton fibers, super-simulation fibers, and ultra-spun cotton fibers, which is also a strategic task for the development of science and technology in the industry.
"In addition to increasing the development of alternative raw materials, there is a particularly important way to resist the rise in raw material prices, that is, to increase the added value of products." Sun Huaibin also said that if it can use design, brands, channels, etc. The structure of value-added, so as to obtain market recognition, sell a good price, so that you can digest raw material costs or other factor costs.
It is worth mentioning that, in Sun Huaibin's view, circular economy is also a way to increase fiber. Specifically, cotton fiber products, including waste textile clothing, are reduced to fiber, reduced to cotton, reduced to polyester, and recycled.
A rise, seed cotton spikes pushed the price of lint prices to rise steadily, and the increase in yarn prices drove cotton prices to continue to surge upwards and downwards. Global inventories fell to a low point. The impact of cotton prices on high domestic cotton prices since 2009 can be roughly divided into Five stages.
In the first stage, the seed cotton spikes pushed up the price of lint steadily from September 1st to November 30th, 2009.
Due to the low temperature and rain in September 2009, Xinjiang, Shandong, Hebei, and other major cotton producing regions, which led to the expected sharp increase in China's cotton production, seed cotton purchase prices rose sharply in October, giving the domestic cotton price continued to rise enough power at the end of 2009. By the end of the year, the price of cotton rose to over 14,700 yuan, while the domestic price of Zheng cotton exceeded the threshold of 16,000 yuan. At this time, China's cotton production is expected to be around 6.5 million tons, and a significant reduction of 1.5 million tons or more.
In 2009, the purchase price of seed cotton climbed steadily. The highest purchase price reached 3.6 yuan/kg, and the mainstream purchase price reached 3.4 yuan/kg. Judging from the price trend, there has been no significant decline in cotton prices throughout the year, which indicates that the cotton industry in 2009/2010 has achieved good returns.
In the second stage, policy regulation will restrain the excessively high price of cotton from December 1, 2009 to February 28, 2010.
Due to the large increase in cotton prices in the early part of 2009, the country decided to sell 500,000 tons of state-owned cotton by the end of November 2009. On December 22, the government issued an import quota of 894,000 tons of cotton in advance in order to increase the market supply and curb the cotton prices that rose too fast.
Under the policy, fundamentals and regulatory pressure, the domestic spot cotton price maintained a stable pattern from December 2009 to February 2010. The price of Zheng cotton also fell from the high point of 16,600 yuan/ton to 15,200 yuan/ton, which is close to the spot price. price.
In the third stage, the increase in yarn prices drove the cotton price to continue to rush, from March 1 to June 30, 2010.
After the Spring Festival, due to the strong recovery of the global economy and the impact of China's hike in interest rates, companies involved in all sectors of the cotton industry began to replenish stocks that were lowered due to the financial crisis. At the same time, domestic demand has grown significantly under policy stimulus, and exports have continued to improve. Domestic yarn prices After the Spring Festival began to climb sharply, and drive up the price of cotton.
Although in May the government issued a document prohibiting speculative capital speculation and named cotton, there was no substantive policy for the rapidly rising cotton price. The cotton price continued to rise under the support of strong consumption. The large increase in the rate has supported the sharp rise in domestic cotton prices. As of the end of June, 328 spot cotton prices broke through the 18,000 yuan/ton mark, while the Zheng cotton September contract also reached 18,000 yuan/ton.
In the fourth stage, the demand in the off-season temporarily weakened and the cotton price entered the adjustment pattern from July 1st to August 30th, 2010.
In July, the textile market entered a late off-season. At the same time, due to the resumption of exchange reform on June 19, the export pressure increased and downstream demand weakened. Because textile companies have high profits, textile companies have started to sell cotton yarns, and cotton yarn has entered a downward trend. Affected by this, spot cotton prices also showed signs of falling.
The state began to dump 600,000 tons since August 10, and added another 400,000 tons to be thrown on September 26. This makes the market resources in the end of 2009 sufficient, demand weakened, cotton prices into a weak pattern. However, on the whole, the adjustment is not large.
In the fifth phase, global inventories fell to a low point, and cotton prices hit a historical high of 25,000 from September 1 to the present.
The accumulated 1 million tons of national reserve cotton have also been fully sold on October 20. Affected by the relationship between supply and demand and bullish psychological influence, **, electronic matching, stockpiling and spot prices have risen sharply. At present, the national reserve auction has risen above 24,000, and the spot three-level cotton price has exceeded 22,000 yuan overall. Break through the $1 mark and reach the highest level in nearly 15 years.
The number of cotton enterprises in various regions has gradually increased, and the purchase price of seed cotton is obviously higher than in previous years. The buying has already appeared, and the price has been raised from RMB 3.9/kg to RMB 5/kg. According to this calculation, the lint processing cost exceeds 21,500 yuan/ton.
Since the start of the new cotton year (as of September 28), the purchase price of seed cotton was more than 60% higher than the same period of last year, and the ex-factory price of lint cotton was nearly 70% higher than the same period of last year.
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