2011 cotton prices soared, the end of the year gradually stable

First, the 2011 cotton price chart



According to data from business clubs, in 2011, the entire domestic and foreign cotton market showed a roller coaster pattern that was rapidly rising and falling. Due to the large reduction in cotton production in the previous year and the tight market supply, coupled with the speculation of domestic and foreign hot money, the price of cotton rose rapidly at the beginning of the year, setting a new high in recent years. The price of 328 cotton rose from 27,500 yuan/ton in early January to 31,550 yuan/ton in March, up 14.73%. With the expected increase in cotton production in the new year and increased risks in the international financial market, the cotton price quickly dipped. The highest price in March was 31,550 yuan/ton, which fell sharply to 19,034 yuan/ton in August, and the decline rate reached 39.67%. . Later, with the introduction of the state's provisional reserve plan, the cotton price stabilized and stabilized.

Two influencing factors 1? The economy of Europe and the United States is weak, and the domestic textile enterprises' foreign trade orders have decreased.

The outbreak of the European debt crisis has caused European and American citizens to tighten their purses, including the reduction in apparel consumer spending. Changes in consumer behavior in Europe and the United States have seriously affected the export of China's textile and clothing industry.

Affected by the turmoil in the global economic situation, China's textile and apparel exports have declined for three consecutive months. In October, the value of textile and apparel exports was 19.65 billion U.S. dollars, which was a quarter-on-quarter decrease of 14.5%, and a year-on-year increase of 10.4%. The year-on-year increase was the lowest point of this year, and the increase in apparel exports fell to single digits. From April this year, especially in the third quarter, China’s textile and clothing orders were not optimistic. In October, exports continued to decline as expected. At the 110th session of the Canton Fair, many foreign trade companies in the United States and Europe that were formerly major markets reported that in the past two months, with the intensification of the European debt crisis, European and American market demand has entered a downward path, and orders from Europe and the United States have been rapidly decreasing. The actual transactions of buyers from Europe and the United States dropped by 19% and 24%, respectively. This indicates that by the first half of next year, China's textile and apparel exports will continue to weaken.

2 Transfer of orders to Southeast Asian countries At present, Pakistan, Bangladesh, Turkey and other countries are consuming the "cakes" of Chinese textile exports with far lower cost advantages than China. Some of these countries' quotation may be lower by 10% than China, and the current average profit margin of China's textile industry is only 3.9%, so many orders can only be abandoned. At present, the cost of labor in India, Pakistan, and Vietnam is only 38% of the cost of labor in China, and the cost of raw materials only accounts for 70% of the cost in China.

3 Downstream demand weakened From January to October 2011, the accumulated inventory of finished products of cotton textile enterprises surveyed increased by 52.1% year-on-year. Among them, the inventory of purified fiber yarns has increased by more than one time, and the backlog of chemical fiber products has been the most serious. As the price of cotton continues to fall, prices of chemical fiber raw materials and products have also fallen, and sales have also been sluggish. As many companies in the earlier period increased their production of chemical fiber products, the inventory of inventories increased gradually. From January to October 2011, the total inventory of products surveyed by the surveyed companies increased by 44.7% year-on-year. From the perspective of product structure, the backlog of cotton blended fabrics and purified fabrics was relatively high, with a cumulative increase of 71.9% and 63.8% respectively. The main reason is the large increase in product inventories of large companies, indicating that sales pressures faced by large companies are more prominent.

As of December 12th, the spot price of cotton was relatively stable, and the purchase of textile mills was small, with the use of purchase, and acceptance ** settlement was more. The market for textiles sales is still very bleak. The cotton textile enterprises are still in a difficult position and the sales of yarns and cloths are very slow. In view of the weakening economy in Europe and the United States, the continued suppression of global consumer demand, and the imminent repayment pressure at the end of the year, the funds of textile companies are relatively tight, and there is still a lack of strong support for continued growth.

4 High labor costs of enterprises Although the labor advantages of China are outstanding, the current rise in domestic labor costs is a general trend and a common situation facing the entire labor-intensive industry.

5 Replacement of chemical fiber products with cotton In recent years, the increase in chemical fiber production capacity and low price will lead to an increase in the substitution of chemical fiber, which has inhibited cotton consumption to some extent. From the second half of 2011, new domestic PTA production capacity has been put into operation one after another, and the situation that PTA is in short supply has improved. The increase in cotton production also led to viscose staple fiber using cotton linters as raw materials, which has a larger production space. At present, the price of polyester staple fiber is 11,350 yuan/ton, and the average price of viscose staple fiber is 16,600 yuan/ton, which is 8,000 yuan less than the current cotton price and 3,000 yuan per ton, which makes the price of chemical fiber very large. The price advantage.

The implementation of open and unlimited purchases of 6 national cotton reserves will stabilize the market sentiment to a certain extent and give strong support to the market. However, the specific impact depends on the size of the storage and the implementation progress, the setting of the storage point and the number of plans for each bank. Since November, the volume of purchases and stores has been significantly enlarged, and the volume of purchases and storages has continued to remain high. With 400 companies underpinned by policy support, the deposits have been relatively positive. As of December 21, 2011, the temporary purchase and storage of cotton in 2011 The accumulated turnover was 1,744,310 tons, and the accumulated turnover in Xinjiang was 1,159,780 tons. The accumulated turnover in the mainland was 584,530 tons.

3. Conclusions and Outlook 2010/11 cotton's annual cotton price “suddenly rises and falls” has caused serious impact and losses on the entire cotton industry chain, and its roots lie in the imbalance between supply and demand. In the new year, although the prices of raw materials have fallen, there has been no significant increase in raw material demand for the downstream textile industry. The growth rate of the textile industry may continue to slow down, and cotton demand is expected to maintain its annual level of 10 million tons. On the other hand, most of the main cotton-producing countries in 2011 had a good harvest of cotton, and the relationship between supply and demand improved markedly. There was some downward pressure on cotton prices. Domestically, the large fluctuations in cotton prices in 2010/2011 caused textile companies to find it difficult to determine costs. Large orders and long orders have sharply decreased. Raw material inventories have remained low. Purchases of cotton have been limited. Market turnover has been light in the middle and later years, and commodity cotton turnover has been slow.

Business club cotton analysts believe that the new cotton growing weather is good, the global cotton prices still have many uncertainties. In the next fiscal year, the domestic cotton price is likely to be around 20,000 yuan/ton under the support of the policy of storage and storage, and the possibility of shocks will be around 3,000 yuan. Increased output and stable demand will guide cotton prices to gradually return to normal levels in the next 2-3 years.

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