In 2010, the price of cotton was like a dislocated wild horse. It first rushed upwards and then turned sharply. The entire textile industry witnessed this “crazy track”. So, is the peak of cotton prices gone? What kind of impact does this fluctuation have? Where will the future cotton price go? With such doubts, "Textile and Apparel Weekly" interviewed two senior cotton spinning experts: Xu Wenying, vice president of China Textile Industry Association, and Kong Xiangjun, chairman of Jiangsu Lianfa Textile Co., Ltd.

Big ups and downs cause double blows

"Textile and Apparel Weekly": Can we think that the crazy rise in cotton prices in the previous period has passed? What kind of impact did this round of cotton price plunging on textile companies?

Xu Wenying: Due to the role of national macro-control, the momentum of high-speed skyrocketing has been initially controlled, but it is still necessary to be alert to speculators' new round of speculation. This round of cotton prices has risen and fallen sharply, and it will inevitably cause a double blow to the textile industry. When cotton prices rose, the price of cotton yarns in the yarn mills temporarily changed their passive status. However, some cloth factories, denim enterprises, small and medium-sized knitting enterprises, printing and dyeing enterprises with poor risk resistance saw a drastic decline in the operating rate, and some enterprises temporarily stopped production. When the price of cotton fell sharply, some mills that bought cotton at high levels would suffer losses, and the money they had earned had to be spit out. The rapid fluctuation of cotton prices brings risks and uncertainties to the operation of all textile enterprises, which makes the spinning mills, cloth factories and garment factories dare not take orders, affecting the long-term planning and stable development of enterprises.

The large fluctuations in cotton prices have also affected the market order, resulting in chaos in the circulation sector, declining cotton quality, and the inability to fulfill many contracts. For example, when cotton prices rose, Indian cotton companies’ exports to China showed default. Cotton companies in Xinjiang also experienced a large number of defaults. Although they negotiated the price and even paid a deposit, but after that, a ton of cotton rose by one or two thousand, tens of tons, hundreds of tons of cotton is tens of thousands, hundreds of thousands of profits. . Cotton companies will require textile companies to add money, otherwise cotton will not go out.

Kong Xiangjun: The peak of cotton prices has passed, but it is impossible to return in the era of low cotton prices. There is no objective standard for the skyrocketing cotton price. For companies like ours, the small increase in cotton prices can be digested, but when cotton was “mad” some time ago, it reached 31,000~32,000 yuan/ton, and we only had 3 or 4 months left. Cotton stocks, had to take two hundred million of funds, personally went to Xinjiang to purchase cotton, and later the cotton price is too high, we would not accept it.

"Textile and Apparel Weekly": In this round of cotton price fluctuations, how do you view the factors of hot money speculation?

Xu Wenying: The role of hot money speculation in this round of cotton volatility is still very large. The shortage of cotton is the root cause of cotton's rise, but such fundamentals are not enough to make cotton rise to the present level. According to our understanding, there are many companies and individuals who sell cotton and crepe on the market. Many of them are not engaged in textile production. A merchant in Zhejiang bought the yarn of Huafang Group and earned more than 10,000 yuan per ton. Now, the rapid decline in cotton prices has also played a role in the sale of hot money.

Kong Xiangjun: After the cotton price is higher than 28,000 yuan / ton, it is the role of hot money. This kind of serious deviation from the rational price, the normal textile enterprises generally do not dare to buy and store, only the hot money can dare to speculate.

25,000 yuan / ton or a rational price

"Textile and Apparel Weekly": Cotton prices rose wildly in the past period. Many people think that cotton prices have lost "rationality", and now cotton prices are falling. So, what is the price of the future cotton price to be reasonable?

Xu Wenying: "reasonable" is only a relative concept. In 2003-2004, the price of cotton rose to 18,000 yuan / ton. At that time, everyone felt unreasonable. Later, it rose to 19,000 yuan / ton, and then quickly fell to 13,000 yuan / ton.

The price of cotton in the future will be steadily maintained at a level, and no one can say it. In recent years, the cost of cotton is increasing, and it is not as good as growing cotton. The cotton spinning industry has to study how to maintain the enthusiasm of cotton. If the previous high seed cotton purchase price is 3.5 yuan / kg, the income per mu is about 1400 ~ 1500 yuan, while the wheat and corn, the income per mu is more than 2,000 yuan, and the cotton is difficult to manage, plus the country on the grain Farmers have implemented subsidies, while cotton is not. Therefore, cotton farmers are not motivated to grow cotton. Considering various factors comprehensively, in order to protect the enthusiasm of cotton farmers and maintain the competitiveness of textile enterprises, some enterprises should reflect that the price of lint should be maintained at 25,000~26,000 yuan/ton.

Kong Xiangjun: When we estimate the price of cotton, we usually consider three factors: the cost of cotton planting by cotton farmers, the profit of intermediate circulation, and the supply and demand of the market. At present, the cost of cotton planting cotton farmers determines that cotton lint prices should be at least 16,000 yuan / ton. Below this price, cotton farmers have no profit. At the same time, the profit of the middlemen probably needs to be maintained at the level of 2,000 yuan / ton. Coupled with the fact that demand in the market is greater than supply, we feel that the price of cotton will not be lower than 22,000 yuan / ton. In the future, cotton prices may remain between 22,000 and 28,000 yuan per ton, and may fluctuate around 25,000 yuan per ton.