Cotton prices plummeted from cotton farmers to collective cotton enterprises "half-starting"

Affected by such factors as the sharp drop in cotton prices and sluggish demand, the current cotton textile industry is in a sluggish state, and the entire industry, including cotton farmers, cotton processing companies and textile companies, is complaining collectively. Cotton processing companies stopped production or semi-discontinued production, and cotton textile enterprises were slow to sell. Farmers have “abandoned cotton from food”. The industry believes that the current plight of the whole industry chain of cotton processing and cotton textile production will trigger a new round of industry reshuffle.

Cotton Farmers Unplug Cotton Plants in Advance Dezhou City, Shandong Province is an important textile base in the country. There are 247 cotton textile enterprises in the city, and the annual cotton demand is about 450,000 tons. According to the monitoring of the Dezhou Cotton Association, the current purchase price of Texas IV seed cotton is around 7.8 yuan/kg, a drop of more than 40% year-on-year. In the same period last year, the purchase price of the fourth grade seed cotton reached the highest 14.4 yuan/kg.

Ma Yuzhen, Zuzai Village, the old town of Wucheng County, Dezhou, has planted 13 acres of cotton. This year, a total of 3,300 kg of seed cotton was harvested. The reporter recently saw in her home that the rooms and corridors were full of cotton. “The price is not high. Even the feelings of picking up are gone. This year is considered busy!” Ma Yuzhen said: “The cotton is time-consuming and laborious. Compared with growing grain, the cotton can be reduced by at least three or four months' working time. For income of 70 to 80 yuan, the difference between planting cotton and growing grain is 7,000 yuan."

This year, the price of cotton is low, and the profit margins of cotton farmers are too thin. There are already many cotton farmers who “take cotton out of grain”.

In 2008, the cotton planting area in Dezhou City was 2.9 million mu, which was 2.31 million mu in 2009, and it dropped to 1.55 million mu in 2010. This year, many cotton farmers have already pulled out the cotton plant in advance and planted wheat. According to the Dezhou Cotton Association, the cotton planting area in the city will drop by 20%-30% next year.

The cotton spinning industry is facing a reshuffle. Wuqiao County Kangqiao Cotton Industry Co., Ltd. is a large-scale cotton processing company in the region. Sun Ronggui, general manager of the company, told reporters that starting from last month was not normal. He said that enterprises are now "two difficult", one end is a bad seed cotton, cotton farmers reluctant to sell a very strong psychological, and the other is the low price of lint hard to sell. Last month, the company was basically enough, and this month it was estimated that it would lose 340,000 yuan.

The situation of Longxiang Cotton Co., Ltd., which is separated from Kangqiao Company by a wall, is also worse. The company's principal Lu Baofeng told reporters that the company is now half-commenced, mainly to retain workers and to maintain some of its old customers.

Ma Junkai, deputy secretary-general of the Dezhou Cotton Association, said that since the beginning of March this year, with the sharp decline in the price of cotton, the price of cotton yarn has also dropped significantly, making it difficult for textile companies to operate. From May to July, about 80% of local small-and-medium-sized cotton textile enterprises stopped production and restricted production, which was no less difficult than that caused by the 2008 financial crisis. Since mid-September, the average operating rate of cotton yarn companies was only about 70%.

It is understood that the 110th session of the Canton Fair transaction data is not optimistic, Europe and the United States lack of orders, reduced by 20% to 30%. According to industry analysts, although the country’s temporary purchase and storage policies have stabilized cotton prices, a new round of reshuffling in the cotton spinning industry is still inevitable.