Cotton Prices Rose Directly To The Lifeline Of Home Textile Enterprises

Cotton prices rise, squeezing profits, space textile enterprises survive all fronts

The sharp rise and fall in a month has left many home textile enterprises confused, and the strong wait-and-see sentiment has disrupted the overall strategic layout of the enterprises. Although the short-term slump has restrained cotton price rising trend, the price is still high compared with the same period last year.

Cotton prices rose directly to the lifeline of home textile enterprises

There are many reasons for the rise in cotton prices. HOLA Gu Yihua, general manager of HOLA Trading Limited, said in an interview: "it is not only the problem of cotton price, but the overall growth of material costs. At the same time, with inflation, I think this has to be faced."

Professional analysts said that the early rise was caused by the cotton production area, resulting in a reduction in cotton production and quality, and there was a big gap between market supply and demand. At the same time, with the increase of labor price, fuel price increase and transportation cost increase, many other factors, such as "hot fuel" of hot money, pushed up cotton prices, and then resulted in a sharp fall in cotton prices because of intensive policies and quick escape from profit funds.

The profit margins of textile enterprises themselves are not high. In such a hot and cold market, they are even more helpless. The crazy rise of raw materials is squeezing profit margins and pointing to their lifeline. Yang Zhaohua, President of China Textile Industry Association, said that the bearing capacity of the international home textile market for the price of domestic textile products has been relatively poor. Continuous rising prices of raw materials will undoubtedly damage the autumn and winter orders and long-term orders of enterprises. "Once the cost of increasing the cost of raw materials is difficult to translate, the profit margins of textile enterprises will be swallowed up." The head of a home textile enterprise said that before the price rise of cotton yarn would adjust the proportion of the business category according to the market situation, and ensure the company's operating profit, but now several varieties of textile raw materials are rising in price, and the increase is larger. In the face of such market situation, Textile enterprises It seems particularly passive, and for a while, I don't know where to go.

In addition, the reporter understands that the international competitiveness of textile enterprises has also been affected. In addition to the sharp rise in raw materials, the US dollar has depreciated to 2.64% against the RMB in the past three months, coupled with the rise in domestic labor costs and other factors.

The price of home textile products has not officially started {page_break}.

The rise in cotton prices is bound to shift to downstream products. The rising price of new textile products is imperative. "As far as the domestic market is concerned, since the price rise of cotton since September is carried out on the high price in August, the enterprises themselves are hard to digest, and the price of products must be adjusted accordingly. The sales volume of products after price adjustment will be affected, which will affect the normal production and operation of enterprises." Yang Zhaohua, President of China Textile Association, said frankly.

With such questions, reporters interviewed Bao unadorned. Home textiles Lu Weiguo, general manager, thinks that the price rise of cotton products has a delayed effect. "Because there is a cycle in the production of finished products, roughly two or three months or so, we already have the corresponding stock preparation before the price increases, but we can only add 20% or 30%. If the cotton price is not falling during this period, we will start preparing products for spring and summer next year, so the price increase is really reflected in next year's 3 and April."

The response of consumers to the rise of cotton prices in the market is not the same. In the course of the interview, consumers told reporters that because the market price is higher, they will not have to reserve bed products and are eager to purchase at this time, so the buying probability is not high. Some customers react to quilts and quilts as residents' necessities, so we will not buy them in winter because of rising prices.

Home textile industry chain upstream and downstream should jointly resist risks

The sharp rise and fall of cotton prices have deeply cut into the soft rib of home textile enterprises. The strong wait-and-see mood and discomfort reflect the immature and fragile domestic textile enterprises in the market. Home textile enterprises are experiencing the second challenge from the financial crisis, and how to transform the crisis into opportunities is the most serious topic for enterprises.

Zhou Jianhua, director of Kasen home textile, told reporters: "the instability of cotton prices will have inextricably linked to the near future and future development of enterprises. In the process of fluctuation, our enterprises should make more plans for stock preparation, combine the sales of the market, do well the stocking and production of products, raw materials, and avoid excessive market impact. Normal fluctuations will not affect our finished products industry. "

"The economic situation can not be left and right, so knowing how to avoid risks is the most practical and effective way to deal with price fluctuations." The head of a textile enterprise in Xiuzhou District of Jiaxing said so.

Textile industry professionals said that for the accurate judgement of market trend, enterprises should strengthen the management and improve efficiency to digest the pressure of rising costs. In the face of crisis, the upstream and downstream industries should cooperate and bear each other to jointly resist the impact of raw material fluctuations.