Cotton prices ups and downs disrupt the industrial chain

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In the past three months, the price of cotton has gone up and down again. What is different from last year is that this time the price of cotton has been “diving”. The reporter found that the drastic drop in cotton prices has caused many farmers to abandon their desire to “reduce production without reducing production”, and the follow-up industrial chains such as spinning and weaving have also been “difficult” due to the large fluctuations in cotton prices. , stop production. Ensuring cotton farmers' enthusiasm for planting and stabilizing cotton prices has become a common wish of cotton farmers and textile companies. "Now the cotton price is only 8 yuan per kilogram. I still haven't sold it yet. When it was high last year, it went to 14 yuan per kilogram. Even if it was 3 months ago, there was still 12 yuan per kilogram." Kilograms of cotton, Wang Jinshun, a villager in Zilipu Village, Shilipu Township, Gaotang County, Shandong Province regrets.

In the main cotton producing areas of Shandong, Dezhou, Liaocheng and other places, Wang Jinshun is only one of many “wounded” cotton farmers. According to Ma Junkai, deputy secretary-general of the Dezhou Cotton Association, nearly 40% of the households in many households in Texas have no sales, and some villages hold about 80% of cotton, and some farmers have not even sold a pound.

The decline in futures prices and spot prices is equivalent. Zhengzhou cotton futures contract (Zhengmian 1109) fell by more than 30% in less than three months.

According to several farmers’ estimates, the cost per mu of cotton is currently close to 1,300 yuan (400 yuan for manpower, 500 yuan for agricultural resources, and 400 yuan for rented land). The average cotton yield is about 280 kilograms, and the price of seed cotton is only 9.3 per kilogram. Yuan can maintain the cost, reaching 11 yuan per kilogram in order to maintain the same level with the grain. The current price of cotton is just guaranteed.

Ma Junkai pointed out that cotton farmers, cotton enterprises and textile enterprises in the cotton industry chain are all "tangled" in the price of cotton.

Spinning is the first process after the seed cotton is processed into lint, and the days are “ice and fire”. According to the monitoring data of the Commodity Data Business Group, 21S cotton yarn fell from 37,000 yuan in mid-February this year to less than 32,000 yuan. Ma Junkai said that 60% of the Texas textile companies, which use cotton as their main raw material, are currently producing at the limit, and an estimated 20% of the companies are still in production.

Although sometimes knowingly losing money, some companies still have to “clench their teeth”. Tang Maoyong, deputy director of the Liaocheng Textile Fiber Inspection Institute in Shandong, explained that some companies are afraid to stop work. It is difficult for them to recruit workers in a short period of time after the shutdown. Therefore, some companies can only increase their inventory, but the company’s financial pressure will Increasing.

In the knitting and cotton production process, the fluctuation of raw material prices also affects the normal production of the company. Li Chuanbo, manager of the raw material company of Shandong Demian Co., Ltd., said that when the cost is high, the demand is reduced, and when the price drops, there is more wait-and-see. The downstream customers are afraid to place a long order, and the company does not dare to take long orders. Data from business clubs also showed that short orders in the cotton spinning orders at the Canton fair this spring once again maintained a sharp increase, accounting for 90% of all orders, and only 10% of long orders.

Although domestic cotton prices have shown signs of stabilization in recent days, due to the expected increase in global cotton production in 2011/2012 and the current decline in global commodity prices, the industry generally believes that cotton prices are unlikely to rebound significantly in the near future. While the large fluctuations in cotton prices have caused the entire industry chain to be “tangled”, industry experts are also reviewing and inquiring. How can a stable cotton price mechanism be established?

In March of this year, the National Development and Reform Commission and other departments issued the "2011 Preliminary Interim Cotton Storage and Storage Plan", which was proposed from September 1, 2011 to March 31, 2012 in 13 provinces, including Xinjiang and Shandong. The minimum purchasing and storage price of lint per tonne of RMB 1.98 million is not limited to purchase. This policy is considered by the industry as the minimum protection price system for cotton.

“The minimum protection price has a certain effect on stabilizing the market price, but at present this price cannot fully mobilize the enthusiasm of cotton farmers.” Tang Maoyong, deputy director of the Shandong Liaocheng Textile Fiber Inspection Institute, who often deals with cotton farmers and cotton companies, said that When planting is mainly time-consuming, farmers can grow food and they can go out to work. This can increase a lot of income.

Tang Maoyong said that the cotton farmers have had low returns for three consecutive years. If the cotton prices continue to remain low in the new year, then the cotton planting area will definitely continue to decline next year, and the cotton prices may rise and fall again.

Li Chuanbo believes that stable cotton production is the “source of all things” for the stability of the follow-up industry chain. Large fluctuations in output will drive price fluctuations in follow-up products such as lint, yarn, and cloth, which will affect the normal operation of the industry chain. In terms of the purchase and storage system, efforts should be made to keep the cotton price basically stable.

In the past three months, the price of cotton has gone up and down again. What is different from last year is that this time the price of cotton has been “diving”. The reporter found that the drastic drop in cotton prices has caused many farmers to abandon their desire to “reduce production without reducing production”, and the follow-up industrial chains such as spinning and weaving have also been “difficult” due to the large fluctuations in cotton prices. , stop production. Ensuring cotton farmers' enthusiasm for planting and stabilizing cotton prices has become a common wish of cotton farmers and textile companies.

Cotton price plummets "very injured"

"Now the cotton price is only 8 yuan per kilogram. I still haven't sold it yet. When it was high last year, it went to 14 yuan per kilogram. Even if it was 3 months ago, there was still 12 yuan per kilogram." Kilograms of cotton, Wang Jinshun, a villager in Zilipu Village, Shilipu Township, Gaotang County, Shandong Province regrets.

In the main cotton producing areas of Shandong, Dezhou, Liaocheng and other places, Wang Jinshun is only one of many “wounded” cotton farmers. According to Ma Junkai, deputy secretary-general of the Dezhou Cotton Association, nearly 40% of the households in many households in Texas have no sales, and some villages hold about 80% of cotton, and some farmers have not even sold a pound.

"Looking at the price of cotton falling day by day, the heart of cotton growers is becoming more and more difficult day by day." Ding Chuncai, a cotton trader in Linqing City, Liaocheng City, said that ordinary cotton farmers have to earn less than 7,000 yuan a year in their families, which is mainly used as economic sources for cotton. For the peasants, it is indeed hard to bear.

The decline in futures prices and spot prices is equivalent. Zhengzhou Cotton Futures main contract (Zhengmian 1109) on February 17 this year, the highest price once reached 34,800 yuan per ton, May 12 fell to a recent low of 24,300 yuan per ton, less than 3% in March fell. The price of US cotton futures also fell sharply, reaching 220 cents per pound in early March.

In mid-May, cotton in cotton fields in many areas in Shandong has exposed seedlings. Although cotton seedlings are growing, the hearts of cotton growers are getting lost. “Last 60 mu of cotton was planted last year and the result was reduced due to flooding. However, the early period price is very good. It can be said that the production is not reduced. Therefore, a variety of 10 mu was introduced this year, but now the price has fallen sharply and the decision has been wrong.” Binzhou City Qin Huangtai Township Mafang Village cotton farm horse factory sighs.

According to several farmers' calculations, the cost per mu of cotton is currently close to 1,300 yuan (400 yuan for manpower, 500 yuan for agricultural resources, and 400 yuan for rented land). The average cotton yield is about 280 kilograms, and the price of seed cotton is only 9.3 yuan per kilogram. Guaranteed, to reach 11 yuan per kilogram, only with the grain. The current price of cotton is just guaranteed.

Cotton prices ups and downs disrupt the industrial chain

Ma Junkai commented on the ups and downs of cotton prices in 2010/2011. Suddenly the price of cotton went up and down so that ordinary people couldn't read it. The old dealers who had been engaged in cotton purchase and sales for decades also could not understand that cotton farmers, cotton enterprises, and textile companies in the cotton industry chain were “tangled” in cotton prices. .

He said that from September to early November last year, the price of cotton went up all the way, almost for a day. The acquisition and processing enterprises of cotton are both excited and afraid. They do not know whether tomorrow's cotton prices will rise or fall. Every day, they are scared. This year, the price of cotton fell as well as the loss.

Spinning is the first process after the seed cotton is processed into lint, and the days are the same. According to the monitoring data of the Commodity Data Business Group, 21S cotton yarn fell from 37,000 yuan in mid-February this year to less than 32,000 yuan. Ma Junkai said that 60% of the textile enterprises in Texas with cotton as the main raw material are producing at the upper limit. It is estimated that about 20% of the enterprises will stop production. Because the spinning mill must have a certain inventory to guarantee production, high-priced raw materials and low-priced yarns lead to Loss is difficult to avoid.

Wang Enzhu, general manager of Qixian County, Shandong Province, told the reporter that when the price of cotton rose, the increase in downstream industry costs would affect demand, while the downward trend in the price of cotton fell, and the demand was even less, resulting in a slump in business production.

Although sometimes knowingly losing money, some companies still have to “clench their teeth”. Tang Maoyong, deputy director of the Shandong Liaocheng Textile Fiber Inspection Institute, explained that some companies do not dare to stop work lightly and it is difficult to recruit workers in a short time after work stoppages. Therefore, some companies can only increase their inventory, but this can only be done. As a temporary strategy, corporate financial pressure will continue to increase.

In the knitting and cotton production process, the fluctuation of raw material prices also affects the normal production of the company. Li Chuanbo, manager of the raw material company of Shandong Demian Co., Ltd., said that when the cost is high, the demand is reduced, and when the price drops, there is more wait-and-see. The downstream customers are afraid to place a long order, and the company does not dare to take long orders. Data from business clubs also showed that short orders in the cotton spinning orders at the Canton fair this spring once again maintained a sharp increase, accounting for 90% of all orders, and only 10% of long orders.

When does cotton price return to rationality?

Although domestic cotton prices have shown signs of stabilization in recent days, due to the expected increase in global cotton production in 2011/2012 and the current decline in global commodity prices, the industry generally believes that cotton prices are unlikely to rebound significantly in the near future. While the large fluctuations in cotton prices have caused the entire industry chain to be “tangled”, industry experts are also reviewing and inquiring. How can a stable cotton price mechanism be established?

In March this year, the National Development and Reform Commission and other departments issued the “2011 Preliminary Cotton Reserve and Storage Plan” in order to protect the interests of cotton farmers. It was proposed from September 1, 2011 to March 31, 2012, and 13 in Xinjiang and Shandong. In the provinces, the minimum purchase and storage price of standard cotton lint at RMB 19,800 per ton was not limited. This policy was considered by the industry as the minimum protection price system for cotton.

“The minimum protection price has a certain effect on stabilizing the market price, but at present this price cannot fully mobilize the enthusiasm of cotton farmers.” Tang Maoyong, deputy director of the Shandong Liaocheng Textile Fiber Inspection Institute, who often deals with cotton farmers and cotton companies, said that When planting is mainly time-consuming, farmers can grow food and go out to work. This can increase a lot of income.

The latest global cotton supply and demand report released by the U.S. Department of Agriculture on May 11th made the first forecast of global cotton supply and demand in 2011/2012. It is estimated that global cotton production in 2011/2012 will reach 27.175 million tons, more than 300 more than last year. Tens of thousands of tons of cotton-producing countries such as China and India will all increase production. This is an important reason that the industry believes that cotton prices are unlikely to rise significantly.

Tang Maoyong said that in 2008 and 2009, affected by the global financial crisis, the price of cotton was low. In 2010, due to severe weather, the cotton production was greatly reduced, and the cotton farmers have had low returns for three consecutive years. If the cotton price continues to be low in the new year, the cotton planting area will definitely continue to decline next year, and when the cotton price rises and falls, it may be staged again.

Li Chuanbo believes that stable cotton production is the “source of all things” for the stability of the follow-up industry chain. Large fluctuations in output will drive price fluctuations in follow-up products such as lint, yarn, and cloth, which will affect the normal operation of the industry chain. In terms of the purchase and storage system, more efforts should be made to keep the cotton price basically stable.

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