The Price Of Cotton Will Ultimately Be Determined By The Market.

However, in recent years, the external environment has changed so rapidly that the international cotton price has dropped sharply, and the domestic cotton price has been supported by the purchase and storage price, resulting in the widening gap between domestic and foreign cotton prices. Spin clothing Enterprises, especially export oriented enterprises, have a relatively large impact.

"The steady cotton business next year is likely to end." Cotton merchant Cao Gui (a pseudonym) shows his worries about the future involuntarily.

"Doing national storage cotton is OK, but the risk of marketing cotton is too great." At the end of the year, Cao GUI was also busy buying cotton and processing cotton. He did not deny that he was a profiteer in the cotton purchase and storage policy, and expected to earn almost the same amount last year as he did last year.

Cao Gui believes that those who do not have the right to qualify for processing plants, the days are more difficult.

　 Collecting and storing profits

Cao Gui's enterprise is a cotton processing enterprise. In Pengze County, Jiangxi Province, which is rich in cotton, it belongs to the cotton enterprise of scale. At present, the purchase price of cotton from cotton farmers is 4.5 yuan / kg, and processing about 35000000 kg of cotton per year will require about 130 million yuan of working capital, of which 70 million ~8000 yuan will depend on bank loans.

Cao Gui earned only 1 million ~200 yuan last year.

"When I was a sales representative in other industries in Dongguan, I made so much money in one year, and it's not that hard." The reason for Cao Gui to continue to do cotton business is very simple. There is a price for storing and storing there. "Cotton growers and processing enterprises have a spectrum in mind, knowing how to deal with them, but the profit margins are not large enough to be stable."

Cao GUI said that if cotton was abolished next year, the risk would be increased.

He had a vivid memory of the cotton price in the past few years, such as roller coaster. In 2010, the spot price of grade 328 cotton rose all the way, and accelerated in September. It hit a new high almost every day, and plunged sharply to 31235 yuan / ton in November 11th, then plunged to 26000 yuan / ton. In the first half of 2011, cotton prices were crazy like last year, and they had a round of roller coaster. In March, cotton prices rose again to 33 thousand yuan / ton before they fell. In the process, Cao Guichang also got the bitter fruit and lost millions of dollars in one month when the cotton price went down the most.

Facing the shock cotton price, in order to stabilize cotton production, operators and use Cotton enterprises The market expects to protect the interests of cotton farmers, and the eight ministries and commissions of the national development and Reform Commission released the plan for the temporary storage and storage of cotton in 2011 in March 2011, and began to implement it from September 1st of that year. Taking into account the cost of raw materials, land, labor and transportation caused by inflation, the storage price is set at 19800 yuan / ton, which is 57% higher than the reference reserve price of 12600 yuan / ton in 2008. In 2012, cotton temporary purchase and storage price increased by 600 yuan / ton, to 20400 yuan / ton.

In the past three years, the state has collected about 10 million tons of cotton reserves.

Industry expert Wang Qian said yesterday in an interview with reporters that at present, the domestic cotton market is considered to be a policy city, and the state's policy of purchasing and storing domestic cotton and the quota restrictions on imported cotton have all been criticized. But in his view, it was necessary to introduce the policy of purchasing and storing up at that time. When cotton price was up to 30 thousand yuan / ton, then it fell to 20000 yuan / ton by roller coaster. Under such circumstances, the state started the policy of temporary purchasing and storage, and the storage price was basically consistent with that of the market at that time. The starting point is good, and it plays a positive role in stabilizing cotton price.

The difficulty of "cotton tube"

The latest national reserve cotton launch was launched on the 28 th of last month. The reserve price was 18000 yuan / ton, lower than the reserve price and the domestic market price, but higher than the imported cotton price. Affected by the expected impact of the national cotton throwing and storage, the domestic cotton market began to show a doldrums. According to the recent price monitoring by the business community, the price of domestic cotton market has declined slightly since mid November. Up to now, the price has dropped by about 1.05%, and the market center price is 19500 yuan / ton.

USDA (United States Department Of Agriculture, US Department of Agriculture) November cotton demand and supply report estimated that the global cotton production in the year of 2013/2014 was 25 million 521 thousand tons, a slight decrease of 0.18% compared with September's estimated value. But cotton stocks have risen sharply by 1%, especially China's cotton stocks, which will account for more than 60% of global inventories in 2014.

"Just for a while, in recent years, the external environment has changed too fast, and the international cotton price has dropped sharply, and the domestic cotton price has been supported by the purchase and storage price, resulting in the widening gap between domestic and foreign cotton prices, which has a relatively large impact on downstream textile and garment enterprises, especially export oriented enterprises. How to balance the profit balance among all the links in the huge industrial chain of about 20 million employees in the textile industry? This is indeed a management problem. Wang Qianjin believes that the abolition of cotton storage and withdrawal next year is the general trend, such a large inventory, on the one hand, the national financial pressure increases; on the other hand, the storage and storage of cotton in the Treasury storage time if too long, will affect the quality of cotton. Cotton consumption in China needs about 7 million 500 thousand ~800 tons per year, and the number of national cotton reserves is nearly one and a half years.

Despite the fact that domestic cotton prices have stabilized at this price of 19000 yuan / ton over the past two or three years, many textile and garment enterprises are dissatisfied with this. At present, the international cotton price is up to 80 cents / pound, and the international cotton index (M) of the average price of the imported cotton China's main port is calculated at 1% tariffs. The cost of converting the renminbi into RMB is about 14000 yuan / ton, which is about 5000~6000 yuan / ton cheaper than the domestic cotton price.

Market making

A person in charge of a textile import and export company, speaking of a recent exhibition in the United States, was particularly depressed. The booth next door neighbor was a textile enterprise from Bangladesh, because the labor cost was low, and the raw material price of cotton was lower than the price of cotton in China.

"Even we can't help working with them to buy some semi-finished products. In terms of basic funds, we have no competitive advantage at all. The official said that in the current high labor costs and the continued appreciation of the renminbi, raw material prices are also particularly sensitive to enterprises. It is necessary to abolish the cotton purchase and storage policy, so that domestic and foreign cotton prices will converge.

Wang Yisheng, the head of a children's clothing enterprise, also said that the sales situation at home and abroad this year is not very optimistic. The export orders of many factories in Guangdong have declined significantly, and because of the rising labor costs, some small and medium-sized factories have been closed down. The price of raw materials and labor costs remain high, as well as the continued appreciation of the renminbi, allowing some customers to turn to other countries for procurement. For example, a lot of Russian businessmen came to buy it before, but now they think the price is too high. They basically go to Turkey, Bangladesh and other countries this year.

This year, the downstream textile and garment enterprises call for the abolition of the policy of cotton purchasing and storage.

Last month, the decision of the Central Committee of the Communist Party of China on a number of major issues of deepening reform in the third Plenary Session of the 18th CPC Central Committee (hereinafter referred to as "decision") pointed out that all those that could be formed by market prices should be handed over to the market. It is explicitly mentioned that we should focus on making the market play a decisive role in the allocation of resources, deepen the reform of the economic system, uphold and improve the basic economic system, and accelerate the improvement of the modern market system, the macroeconomic regulation and control system and the open economic system.

The industry is generally expected that the administration of the temporary cotton temporary. Purchasing and storage policy The cotton subsidy policy will be the fastest in March next year. In a recent interview with the media, Wang Tiankai, President of the China Textile Industry Federation, said that at present, the policy of "pricing, purchasing, storing, pricing and storing" cotton will be adjusted next year under the background of "decision" that the market plays a decisive role in the allocation of resources. This will help solve the problem of high price difference between domestic and foreign cotton. However, the cancellation of cotton quotas, high levy and low deduction need to be further discussed.

Du Min, director of the rural development research center of the Ministry of agriculture's Rural Economic Research Center, also recently said publicly that China's temporary cotton purchase and storage policy will end next year. The direction is basically qualitative. However, the new 2014/2015 cotton season is still under discussion. For example, the Cotton Subsidy Policy should be implemented according to mu yield or mass production subsidy, and the quota and method are still not conclusive.

Wang Qianjin believes that it is a feasible way to replace the cotton farmers directly from the purchase and storage policy to the cotton farmers and the price fluctuation market, and the cotton price will ultimately be determined by the market. This will help to change the overall downturn of the textile and clothing industry and facilitate the export. Next year, the demand for the entire international market of textile and clothing should not be strong enough.

For Cao GUI, he also understood that he would accept it again. market The challenge is sooner or later, but it also has its own concerns. The main concern is that the risk of capital withdrawal is increasing. The downstream textile and garment market is not optimistic. There are factories closing down. He is worried that it will be difficult to recover the money after the sale of cotton.