The weakening of the textile industry can not be underestimated

Despite the slight increase in international cotton prices and the improvement in the international market demand for the textile industry, the operation of textile enterprises in China is still very difficult: the price of local cotton yarn is lowered, the enthusiasm for purchasing raw materials is not high, and the spot price of lint cotton is suppressed. All kinds of problems highlight that the international competitiveness of China's textile industry is gradually weakening. In the future, China's textile industry needs to further promote industrial restructuring and accelerate industrial transformation and upgrading in order to increase the international discourse power of the textile industry.

According to media reports, from May 27th to the 31st, the domestic spot price, Zheng cotton prices stabilized, the cotton period, spot prices fell, the domestic cotton yarn prices fell slightly; on June 4, the domestic cotton price stability. Although the direct subsidies policy has been loosened, but because it has not yet been implemented and the storage and storage prices remain unchanged, it is expected that the situation of cotton spinning enterprises this year will be more difficult, complicated and turbulent than last year.

In the domestic market, the spot price was relatively stable, and the downstream yarn market price continued to decline slightly. Under the condition of lack of confidence in the market outlook, various companies were more cautious about raw material inventories, basically adopting the follow-on purchase policy, combined with the continuous release of storage and cotton. With the constant decline, the pressure on cotton prices may gradually appear.

Imported cotton prices in China's main port rebounded strongly, with most varieties offering more than 220 points.

From the market situation, under the circumstances that the market resources have been strained in the current year, the cotton merchants have gradually increased their long-term sales of new cotton.

At present, the sharp rise in cotton prices is related to the external environment on the one hand, and on the other hand, some varieties have reached the expectations of textile mills after a long period of early decline, and downstream demand has improved. According to industry insiders, the future trend of cotton prices and the purchase of textile mills can keep up with the relationship.

The demand for the international market for the textile industry has improved over last year. Data show that in the first four months, China's textile and apparel exports were US$82.535 billion, an increase of 16.24% year-on-year. Among them, apparel exports were faster than textiles, and apparel exports reached 48.271 billion US dollars, an increase of 19.87% over the same period last year. From the data, the export price of garments increased by 11.83% in the first four months and the number of garment exports increased by 7.19%.

Although international cotton prices have risen, the international market demand has improved, but the textile enterprises are still operating in a downturn, local cotton yarn prices are lowered, the enthusiasm for raw material procurement is not high, and the spot price of lint cotton is suppressed. According to data from China CottonNet, the acquisition price of 428 lint in the Mainland was near 18,674 yuan/ton, which showed a downward trend, which matched the market pressure, and the rising strength was limited. It is expected that the pattern of weak oscillating downgrade will dominate the short-term.

Gao Yong, secretary-general of the China Textile Industry Federation, said at the 2013 China International Textile Raw Material Market Conference that due to factors such as raw material restrictions and rising labor costs, the competitiveness of China's textile industry in the international market began to decline.

It is understood that raw materials are the basic issues affecting the development of textiles. China's temporary cotton purchasing and storage policy has guaranteed the interests of cotton farmers and stabilized domestic cotton prices, but has expanded the domestic and foreign cotton price gap, which has a great impact on the competitiveness of the textile industry. In particular, SMEs, which are mainly based on pure cotton spinning, face particularly outstanding difficulties in survival.

The widening domestic and foreign cotton price gap will reduce the competitiveness of China's textile industry. Industry insiders point out that the current domestic and foreign cotton price difference is within 2,000 yuan per ton, and can also be hedged through technological advancement and variety development. Once the cotton price differential widens to 4,000 yuan or more per ton, it is difficult to make up for it in other ways.

Faced with the current decline in the international market share of cotton products in the textile industry, the reduction in production and production, and the decline in profits, industry experts pointed out that the serious mismatch between the upstream supply chain management system and the downstream market competition mechanism is the root cause of the problem, and the country should respond in a timely manner. Adjust and introduce relevant policies, accelerate the reform of the cotton circulation system, improve the macro-control mechanism of cotton, and realize the marketization of cotton price inside and outside. While encouraging enterprises to continue to innovate and speed up adjustments, they should also effectively solve the problem of raw material supply as soon as possible to ensure the stable development and smooth transition of the industry.