Textile Companies Use The World'S Highest Priced Cotton.

In 2012, under the influence of the European debt crisis and the recovery of the US economy, the export of the textile industry encountered great difficulties, and sales fell more seriously.

Stable

To prevent cotton prices from falling deep in 2011.

It will cause greater difficulties. At the same time, domestic enterprises will avoid a significant depreciation of inventories, so that enterprises can digest high priced raw material stocks at the higher prices near the purchase and storage prices, and the market stability is also conducive to the sale of finished products.

From this point of view, the purchase and storage policy is conducive to textile enterprises to a large extent.

However, because of the policy of collecting and storing the domestic cotton prices, the domestic and foreign cotton price differentials have reversed the pattern of previous years, and the internal and external upside down and spreads have increased dramatically, making our textile enterprises use the world's most expensive cotton, and the ability to purchase the products has declined.

At the same time, domestic labor costs rise, energy prices go up, and tax burden is heavy, which constantly tests the affordability of textile enterprises.

Corporate earnings are poor.

The textile industry has been underdeveloped this year, which was affected by the low international economic situation many years ago, and the operating rate has been relatively low.

In March, the author visited some enterprises in Henan, Jiangsu and Anhui, and conducted an investigation through the company's colleagues. The survey shows that the current operating rate is still relatively large, and the start-up of small businesses is relatively poor.

Judging from the survey, Henan, Shandong, Hubei and Anhui have more than 80% well-known local enterprises operating rate, and some enterprises are mainly driven by recruitment difficulties. The survey of SMEs is generally around 60%.

In these enterprises, only a polyester and cotton enterprise in Jiangsu has a higher operating rate, but the enterprises also find it difficult to recruit workers.

Some enterprises reflect that there are more scattered orders. In order to take orders, the varieties of spinning enterprises are changing rapidly, and the workshop needs to constantly change cotton blending to cooperate with orders, thus increasing the burden of spinning enterprises.

By April, due to the absence of orders in March, the operation rate of enterprises was tested, and some enterprises in Anhui began to stop.

The characteristics of the cotton textile industry make the profit margin of the whole industry relatively low, and the fluctuation of raw materials has a great impact on the enterprises.

The purchase cost of cotton and other textile materials accounts for more than 70% of the total cost of the enterprise. Therefore, the purchase of raw materials, especially cotton, is particularly important for the survival and development of domestic cotton textile enterprises.

Through the past 6~7 months since last year, the inventory and early digestion of high priced cotton, coupled with the extensive use of cotton, according to the current cotton yarn prices, textile enterprises have been able to earn a certain profit, which is also the main reason to ensure that large enterprises and some small and medium-sized enterprises can start work.

Due to the small amount of orders, the competition between enterprises makes the order price very low, and the high production cost, such as labor force, makes the production profit seriously compressed.

Although most of the enterprises surveyed indicated that they were profitable, they received a certain amount of sales at lower prices, but with a small profit, a small number of enterprises said they were in a profit or loss.

Increased proportion of external cotton and non cotton fibers

In these enterprises, the operating rate of enterprises with good cost control is generally relatively high. Many of them choose to use low price external cotton to increase their competitiveness, and some enterprises increase their chemical fiber consumption according to customer demand.

On the one hand, enterprises should reduce the proportion of raw materials and cotton, and increase the proportion of non cotton fibers such as chemical fiber. On the other hand, cotton raw materials will increase the amount of imported cotton.

At the beginning of March, the difference between domestic and foreign cotton tax free price was as high as 4000 yuan / ton. Under such circumstances, textile enterprises solved the cost of raw materials by increasing the amount of non cotton and increasing the amount of imported cotton.

According to the survey, large enterprises significantly increased the amount of foreign cotton. A large enterprise in northern Jiangsu used most of Xinjiang cotton. This year, the use of cotton increased to 45%, the amount of new cotton was reduced to 35%, and the amount of non cotton fiber increased to 15%.

A large textile enterprise in Henan seldom used foreign cotton before, and the proportion of foreign cotton is over 90% this year.

And small textile enterprises prefer the use of outer cotton, and cotton can be replaced by cotton or even India cotton with good quality. Instead of Xinjiang cotton, India cotton is replaced by ordinary cotton.

Preliminary estimate, as of March, the decline in the proportion of Xinjiang cotton should be at least 10%.

An analysis of the reasons for a substantial increase in the proportion of cotton imports is made. On the one hand, Xinjiang cotton and high quality real estate cotton are highly competitive and have no competitiveness with the outer cotton ratio. Moreover, in the actual purchase, Xinjiang cotton arrived not in time, and the amount of real estate cotton is relatively small, making it difficult to cotton blending; on the other hand, the purchase of Xinjiang cotton requires a "cash cash spot" of cotton enterprises, less credit or acceptance of the draft, while some large and medium-sized traders from the mainland cotton enterprises and ports can allow customers to pay the full amount of 10%~20%'s goods and make the final payment within 2~3 months.

As of April 10th, the public inspection level 3 Xinjiang cotton price quoted at 20400 yuan / ton, India cotton S-61-1/8 "17950~18000 yuan / ton; India cotton S-61-5/32" is 18200~18300 yuan / ton; Brazil SM1-1/8 "18800~19000" yuan / ton, high level flower cotton and the United States C/A, SM class inventory is less, the quotation is above 19500 yuan / ton.

Outer cotton still has price competitive advantage.

Textile enterprises adopt low inventory strategy

From the survey of enterprises, raw materials purchased by enterprises are more prudent, and the strategy of purchasing with them is mostly adopted. Few cotton stockpiling is maintained, and keeping low inventory is the strategy of spinning enterprises at present.

From the cost point of view, in the industrial chain, whether it is the cotton enterprises of textile enterprises or the downstream cloth factories, including printing and dyeing enterprises, the cost of raw materials has obviously declined, which proves that the high priced inventory brought by high cotton prices last year has basically been digested.

Judging from the situation of enterprises, the enterprises think that the current cotton purchase is relatively smooth, the supply is relatively abundant this year, and the downstream orders are still not good enough. There is no need to increase the number of stock days. At present, the stock days of larger enterprises are 30~40 days, and the days of inventory for small and medium enterprises are 20~30 days. This inventory level is at a low level in recent years.

In terms of non cotton fiber, the chemical fiber enterprises in Xiaoshan, Hangzhou are generally high inventory, poor sales, Hengyi and other enterprises in about 30 days, about 2 times the normal state. Under the pressure of inventory, the operating rate of enterprises is down by 70 to 80%.

In terms of finished products, the stock of spinning enterprises is still relatively high, and the spinning enterprises indicate that the sale of cotton yarn and polyester cotton yarn at low price is acceptable, but the sale of grey cloth is not satisfactory.

Since 2011, the inventory of finished goods of yarn and cloth has increased. Since the 9~10 month of this year, enterprises have actively absorbed yarn stock, but the inventory of grey cloth remains high.

From the report of listed companies of textile enterprises, it can be seen that the funds of enterprises occupied by gray cloth are larger, and some of them reach 50% of the assets of enterprises.

Some textile enterprises do not sell their yarn well, so they have to digest internally, which is also the reason for higher storage.

In the late March, in the late March, micro-blog said that the stock in the Pinghu area was huge, and the warehouse in the factory basically broke down.

Pinghu is China's largest foreign trade garment processing site. Most of the famous brands in the world and the mainland have business contacts in Pinghu. The clothing produced in Pinghu is basically exported. The situation in Pinghu reflects the export dilemma of Chinese clothing (000902).

There are no warehouses in Pinghu, and insiders say that by the end of last year, the total inventory would be around 2 billion 900 million yuan.

Hai Lan's home prospectus shows that the total inventory was 3 billion 871 million yuan at the end of 2011, accounting for 56.94% of the total assets.

Spinning enterprises sign bad situation is not good.

In 2011, the export volume of China's textile industry was greatly reversed. The export volume of cotton yarn, cotton fabric, cotton bedding and cotton garments decreased by 25%, 3%, 21% and 7%, respectively, compared with 2010.

Since 2012, the export situation has deteriorated further than in 2011.

China's foreign trade and import and export situation in 1~2 months showed that clothing exports were 19 billion 290 million US dollars, down 2.5%, and textile exports were US $11 billion 940 million, down 2.6%.

One of the reasons is that the cost has brought about a continuous rise in the price of terminal garments, plus the high price difference between domestic and foreign cotton, which has led to the loss of overseas orders. On the other hand, it is related to the high pressure of home textile demand regulation policies related to real estate, and the decline in demand has also significantly inhibited the order quantity.

In terms of orders, textile enterprises in March mostly showed no signs of recovery. According to past years, March is a traditional single season. This year's unoptimistic situation is rare.

4 and May are the traditional off-season cotton consumption, but enterprises hope that this year's situation may change.

Since the beginning of this year, textile and garment exports ranked first in the country. Many garment enterprises in Zhejiang province do not have enough orders to start up. According to the Statistics Bureau, in 2011 1~8, the growth rate of textile and clothing exports in China has remained above 20%. However, the adverse effects of the debt crisis on European textiles and clothing began to appear in September, and the growth rate of textile and clothing exports fell to 14.8% in that month.

In the 1~2 months of 2012, the output of clothing decreased by 4.93% compared with the same period last year, 19.55 percentage points lower than that of the same period last year, while January was the first negative growth after the financial crisis.

When we went to the enterprise survey, enterprises generally reflected poor orders. In late February, a garment manufacturer in Zhejiang said that the export orders fell by more than 30% compared with the same period in the previous year, and the cost of raw materials and labor rose sharply.

The rise of production cost makes enterprises dare not accept orders that are too low in price. The export orders of enterprises are still dominated by small orders and short orders.

It is estimated that the decline of export orders this year should be 10% to 15%. From the export market, Europe and the United States are our main export areas. In 2011, China accounted for about 15% of the total exports to the United States, and about 20% of Europe's exports.

Due to poor economic conditions, the European and American markets have also undergone significant changes in purchasing patterns. European and American manufacturers also choose to "de stock", for example, the world retail giant Wal-Mart Store Inc has reduced the inventory cycle from 8 weeks to 6 weeks.

At present, the US orders have changed from the previous downturn to stable, but exports to Europe are still under pressure.

Although the order situation in March is not satisfactory, but after entering April, the cost of raw materials and the falling of export prices will have a boost to export volume, but this process needs to be observed.

Export can not be done, many enterprises turn to domestic sales, but domestic sales are not good, export tax rebates, and domestic sales will face greater tax burden.

According to the statistics of the China National Business Information Center, in January 2012, the volume of retail sales of clothing in a hundred major large retail enterprises decreased by 0.18% compared to the same period last year, although the average price of clothing products decreased by 6.5% compared with the fourth quarter of last year, while the total retail sales of clothing increased by 6.1% in 1~2 months, a record low, and the total volume of retail sales decreased by 4.23% compared with the same period last year.

Poor export and poor domestic sales make the inventory pressure of downstream garment enterprises huge.

According to the relevant news and the reports of the listed companies, the sports brands such as Mei bang and Lining had huge inventories at the beginning of the year, and the stock of van customer's products was also huge.

An important reason is that it was warm winter last year, making autumn and winter clothing sales unsatisfactory. In the 3 and April, many stores are still selling spring clothes, and spring clothes will be discounted once they appear on the market, and their sales promotion will be strong.

Today is the end of 4, but from the information we know, the list still does not appear. The performance of the Canton Fair in May will be the key to the order.

Apart from raw materials and product sales, the biggest headache for enterprises is the huge increase in manpower, production and financing costs.

The difficulty of recruiting workers everywhere is a huge difficulty for the labor intensive industry in the textile industry. Many enterprises do not make money in starting up, but in order to ensure the stability of workers, they dare not stop work.

At present, the cost of labor is about 1 times higher than that of 2008/09.

With the disappearance of demographic dividend and the increase of labor costs, industrial pfer will become more obvious in the later stage. In the ZARA and H&M stores, the author has found many garments that are producing "Bangladesh" and "Vietnam".

The textile industry is also a high energy consuming industry. The increase of energy prices such as oil prices undoubtedly increases the cost of enterprises.

Since 2011, the cost of loans is a common problem faced by enterprises. Large textile enterprises have greatly reduced their credit lines after restructuring, while small and medium-sized textile and garment enterprises are more difficult to obtain loans. Even if they get loans, banks require a portion of deposits and purchase financial products to raise interest rates. Enterprises generally reflect that the cost of capital is about 1 cents per month.

In terms of taxes and fees, enterprises have greater opinions on the input tax of "high taxes and low deductions". For a long time, cotton textile enterprises have a deduction tax rate of 13% for cotton purchase, while a value-added tax rate of cotton textile products is 17%, and the difference between taxes and fees has been borne by the enterprises themselves. This means that even if no value added, cotton textile products should bear 4% of the tax burden, especially in the case of high cotton prices during the current period.