Shandong textile companies highlight price pressures

According to statistics from Qingdao Customs, as of the end of July, the port of Shandong imported 739,000 tons of cotton, valued at US$1.31 billion, up by 65.1% and 1.3 times respectively from the same period of last year; the average import price was US$1,776 per ton, up 39%. Import volume and price of cotton rose, especially the average price of imports went up all the way, and the price pressures of downstream textile and garment enterprises were prominent.

The average monthly import price of cotton in Shandong Port has increased from January this year to US$1717/ton. Following the breakthrough of the US$1800 per ton in June, the average import price in July reached another record high, reaching US$1912/ton, up 44.1% year-on-year. %, a 3.5% qoq increase, once again set a record high since January 2003.

According to the Survey Bureau of Shandong, the National Bureau of Statistics, the price of cotton has been rising since the end of last year, and the recovery of cotton prices has risen sharply, rising 37% year-on-year in the first half of this year.

The relevant person predicts that the strong cotton price is hard to change. Judging from the current situation, it will be difficult to change the tight supply and demand of cotton this year. According to a survey, the cotton planting area in Shandong decreased by about 5% in 2010, and the planting area of ​​other cotton producing provinces also decreased. Combined with the large reduction in cotton production in 2009, the supply of cotton could not be effectively increased. In terms of consumption, the textile industry has gradually eclipsed the trough and has enjoyed a good momentum of growth. In the first half of the year, the amount of spinning in the domestic textile industry increased by 16.9% year-on-year. The demand for cotton was gradually increasing, and the contradiction between supply and demand imbalances was intensified.

At the same time, international cotton stocks have fallen to the lowest level in six years, and the amount of imported cotton is limited. According to the forecast of the relevant departments, there was still a demand gap of around 1.2 million tons in the national cotton crops during the June-September period when imports and self-sufficiency were removed.

It is worth noting that high cotton prices have already reached the limits of textile companies. On July 9, China's cotton price index reached 18,419 yuan per ton, up by nearly 4,000 yuan from the end of last year, refreshing the domestic cotton stock market's highest record in nearly a decade. Although it fell slightly afterwards, it remained at a high level of over 18,200 yuan per ton, driving the price of raw materials such as cotton yarn and cotton cloth to rise sharply. Affected by this, in the sub-index of China's Manufacturing Purchasing Managers' Index (PMI) in June, the purchase price index of the textile industry was as high as 76.6%, and it was still at a high of 60% in July. The purchase cost of high-priced raw materials has approached the limit for textile and garment companies, and some companies have begun to reduce their production scale.

The soaring price of cotton is continuously transmitted to the downstream, and many companies begin to formulate price increases for finished clothing. According to market research, the retail price of branded clothing has generally risen by 10%-15% this year. Due to the time-lag in the pressure of upward pressure on cotton prices, and autumn and winter clothing materials far exceeds summer products, the wholesale price of apparel products this fall and winter is expected to increase by 10% to 15%, which will further aggravate domestic inflation expectations. The export situation of textile and clothing will also be adversely affected.

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