Through visits to cotton processing enterprises and mid- and downstream cotton spinning enterprises in Changji District and the Sixth Division of Xinjiang, we learned that various factors have boosted cotton prices in 2021/2022, resulting in lint cottonThe comprehensive cost is mostly above 24,000 yuan/ton, while the selling price of lint is about 22,800 yuan/ton. The cost of cotton processing is 1,000-1,500 yuan/ton inversely with the selling price of lint. Cotton purchasing and processing enterprises generally face losses; the sales progress of lint has been significantly slowed down. Slow down, currently 90% of the lint cotton in the jurisdiction has not been sold, and cotton processing companies generally adopt a wait-and-see attitude; due to the slow withdrawal of funds from processing companies, the return progress of cotton purchase loans has slowed down significantly compared with the same period last year; downstream Cotton textilemarket spot trading is weak, with high inventories and low demand. The specific situation is as follows:
1. Affected by the price inversion, cotton processing enterprises’ sales and loan repayment progress slowed down significantly compared with the same period last year.
Multiple factors boost cotton prices, and cotton processing costs are inversely related to lint selling prices. In the first half of 2021, the domestic COVID-19 epidemic has been well controlled and a large number of downstream textile orders have returned. In addition, Xinjiang has encountered extreme weather during the planting period. The market’s expectations for a decline in cotton production have been combined with excessive currency issuance and high inflation in the world’s major economies. The above factors The combined effect of these factors has boosted cotton prices. At present, the cost of cotton processing is generally as high as 23,500-25,000 yuan/ton. The acquisition cost of cotton processing companies is 1,000-1,500 yuan/ton higher than the spot price, and ginning companies are facing losses.
The order volume of lint cotton decreased compared with the same period last year, and the sales progress slowed down significantly. Domestic downstream spinning profits remain at a loss, finished product inventories remain high, and orders and replenishment are lower than expected. According to statistics from the National Cotton Market Monitoring System, as of March 3, the national sales rate was 39.3%, a year-on-year decrease of 34.7 percentage points, and a decrease of 18.6 percentage points from the average of the past four years. Among them, Xinjiang sales were 36.9%, a year-on-year decrease of 36.4 percentage points, and a year-on-year decrease of 36.4 percentage points. The average over the past four years has dropped by 18.2 percentage points. At present, downstream textile procurement is relatively cautious, with only a small amount of replenishment to maintain production. The sales progress of cotton processing enterprises has slowed down significantly compared with the same period last year.
Loan repayment progress has slowed down significantly compared with the same period last year, and most companies need to defer loan repayments. The pressure on banks to collect repayments is increasing day by day, and the cotton ginning mill is in an extremely difficult situation. The main problems currently faced by enterprises are the inversion of acquisition costs and sales prices and the backlog of expenses such as warehousing interest. Faced with the pressure of withdrawing funds, companies have changed their sales strategies, focusing on fixed-price sales and negotiating prices based on differences in quality indicators. Half of the companies surveyed have not yet sold lint cotton. If they rush to sell lint cotton now, they will inevitably suffer losses and are in a wait-and-see state. Because of their small size, these companies only repay bank interest and choose to continue to extend the loan term.
2. The inventory of finished products of textile enterprises continues to increase, and midstream and downstream cotton spinning enterprises remain weak.
Cotton inventories are at historically high levels, and spot trading in the downstream cotton textile market is weak. The market is pessimistic about downstream demand, the overall trading atmosphere remains weak, textile enterprises’ finished product inventories continue to increase, and demand continues to be weak in the later period. The domestic epidemic has spread across a large area, logistics has come to a standstill in some areas, and the entry and exit of cotton warehouses have been restricted. The operations of textile enterprises have been greatly affected, causing the already weak demand to become even more sluggish. According to statistics, cotton commercial inventory at the end of February was 5.4084 million tons, a decrease of 146,100 tons from the previous month and an increase of 361,200 tons year-on-year. The total cotton turnover inventory nationwide was approximately 4.8352 million tons, a decrease of 156,600 tons from the previous month, a decrease of 3.14%, and higher than the same period last year by 77.59 tons. Thousands of tons. Judging from the data, cotton commercial inventories and turnover inventories are at historically high levels, and downstream purchases are cautious. The cotton spinning enterprises surveyed reported that at present, they mainly deal with small and bulk orders, and old customers rarely return orders, while large and long-term orders are still insufficient.
Uncertainties in the trade environment are rising and market demand continues to be weak. The order volume of cotton spinning enterprises has decreased compared with the same period last year, the inventory of finished products has increased, and the market demand has been insufficient. The main influencing factors are: First, the uncertainty of the trade environment such as Sino-US trade friction and the Russia-Ukraine war has increased.Exports The pressure has increased; secondly, the domestic epidemic has appeared in multiple, widespread and frequent outbreaks, domestic business activities have not yet fully returned to normal, and the reduction in social activities has affected the consumer demand for textile and clothing commodities; thirdly, the elasticity of demand for clothing commodities Compared with food and daily necessities, it is higher. In the context of economic downturn and work pressure, consumers have become the target of reducing expenditure. </p
