Cotton prices fall, clothing prices rise, comprehensive regulation, prevent a new wave of price increases

Since September last year, China’s cotton price, like many agricultural products, has not escaped the fate of skyrocketing plunge.

From a step-by-step climb to a straight-line landing, from the 34,000 yuan/ton in March of this year, it fell to the minimum purchase price of new cotton of 19,800 yuan/ton as stipulated in the “2011 Preliminary Interim Cotton Storage and Storage Plan”. The cotton price of riding a roller coaster made the cotton farmers, cotton enterprises and the textile industry agonize.

The reason why this phenomenon occurs is mainly due to the fact that the domestic market is experiencing oversupply. Last year, the price of cotton soared, stimulating the enthusiasm of cotton farmers and increasing the cotton planting area. Coupled with the appropriate climate, domestic cotton production increased significantly. The cotton textile enterprises in the downstream of the industrial chain are facing the pressure of rising costs. On the other hand, due to the debt crisis in Europe and the United States and other countries, the world economy has seen a slowdown in growth. The global cotton consumption has been in short supply, and the import demand in Europe and America has decreased. Downstream cotton industry chain, entering the destocking period, so that the demand for cotton is insufficient.

In the face of falling cotton prices all the way, the apparel industry rose up. Recently visited several well-known shopping malls in the northern city and found that the major brands of autumn and winter clothing have different gains, and some brands even rose as high as 40%. A shopping mall salesman said: “This year's autumn and winter jackets and coats generally increase prices, and women's brands are particularly fierce. Taking the brand I sell as an example, most winter clothes have gone from three digits to four figures.”

“It usually takes three or four months from the design to the production of the order. The clothes that are made nowadays are mostly made of cotton this spring. Therefore, the current fall/winter clothing is originally used as the cost of cotton, not the cotton after the price reduction. In addition, rents and labor costs are rising. This year, the wages of workers in our factory have risen by 20%!" Ms. Zhong, who has been engaged in garment production and processing for many years, told reporters.

In order to maintain normal production operations throughout the year, spinners generally need to maintain inventory for two months. Last year, companies purchased cotton for inventory at a high price. As a result, this year's cotton price fell sharply and cotton stored in the past became a burden, greatly reducing corporate profits. The space, combined with the impact of factors such as labor costs and the appreciation of the renminbi, has weakened the product price advantage, and the orders of European and American consumer countries have begun to shift to low-cost countries. Therefore, the slowing down of destocking and weak demand led to a rise in the price of the company, in order to maintain the survival of the company.

Because the “cold and hot” of cotton prices has seriously affected the enthusiasm of farmers in planting cotton, many farmers have indicated that they will not continue to grow cotton next year. People in the industry are concerned that next year there may be a surge in cotton prices.

The cotton price is mainly determined by the overall supply of the market. Therefore, the competent agricultural departments of all regions need to make reasonable planning and scientific layout of the local cotton farmers, establish a platform for market information disclosure as soon as possible so that market information and planting status form an information interface. Prevent farmers from following the wind.

In addition, the state should further improve the cotton market regulation mechanism, stabilize the market price of cotton, normalize related measures, give full play to the backbone role of large enterprises, increase the state’s control over resources, ensure market supply, and at the same time increase the The degree of energy storage will ease the imbalance between supply and demand in the market. Comprehensive and multi-angle comprehensive control of the market and supply and demand, to prevent the arrival of a new wave of price increases.