The introduction of the cotton direct subsidy policy still cannot bring the textile companies a turnaround

In the 2014/2015 new cotton year, the “cotton’s temporary purchase and storage”, which has been criticized by the industry, has come to an end and replaced by the long-awaited cotton direct subsidies policy of cotton textile companies.

Recently, Liu Xiaonan, deputy director of the Development and Reform Commission's economic and trade department, said that after the target price reform, the linkage between domestic and foreign cotton markets will increase, and the domestic and international spreads will be reduced to a reasonable level, which will improve the market competitiveness of China's cotton textile enterprises. There are obvious effects, especially export-oriented enterprises, which will place them in a relatively fair and reasonable market competition environment.

However, the reporter learned from interviews with cotton textile companies that the introduction of the New Deal did not immediately please cotton textile companies. On the contrary, some companies believe that it is the most difficult time now. Industry insiders also said that at present, there is no positive effect on the industry. In particular, the NDRC stated that it will no longer issue additional import quotas for sliding tariffs, which has caused some cotton textile enterprises that produce high-yielding yarns to panic.

At present, it is precisely the introduction of the direct subsidies policy for cotton during difficult times. The most important impact is to market the domestic cotton prices, link them with international cotton prices, and reduce cotton costs for cotton textile companies. This is the result that cotton textile companies have been waiting for. . However, with the introduction of the New Deal, the price of new cotton fell, but it brought a lot of pressure on cotton textile companies.

Tang Xiyi, general manager assistant of Wuxi Cotton, said that the new cotton picking market will not be a small price difference with the spot price, the company's inventory, as well as the production of cotton yarn will be devalued, that is to say, while losing money on the side of production, companies will face very Big production pressure.

People in the industry believe that the new policy is beneficial to cotton textile companies in the long run, but may experience a longer period of digestion. The current days of the downstream cotton textile industry may be even more uncomfortable. According to Wu Faxin, general manager of Greater China of Guangzhou Aisa Import & Export Trading Co., Ltd., recently, in the traditional cotton textile bases in Jiangsu, Zhejiang, Guangdong, and Fujian, there have been reports of textile business owners running off the road. He said that with the implementation of the 2014 Cotton New Deal, it can be expected that this situation will continue. Chairman of Zhejiang Tianchang Textile Co., Ltd. Wang Huanlong also believes that the winter of the textile industry has only just begun.

A cotton textile manufacturer located in the Shaoxing area, after learning that the country will release cotton prices this year, began to shift from producing 100% cotton products to polyester products. Today, polyester products account for half of the total. “For cotton spinning companies, especially cotton intermediate products, the risk of cost and price for cotton prices will increase.” The person in charge of the company said that the demand market has a habit of “buying up or not buying”, and this time the product structure is adjusted. It is entirely in response to the downward pressure on cotton prices. It has been revealed that at present, the company uses about 10 tons of cotton yarn per day, but the procurement method has changed from the previous medium and long-term to requiring quantity, and is very cautious.

Liu Ming, Chairman of Shandong Hongcheng Group, stated that the pain caused by the policy adjustment was more violent than expected. However, in order to realize the marketization of cotton prices, this must be experienced because domestic and foreign cotton prices meet the domestic cotton price. Decline, so that China's cotton textile companies can compete fairly with foreign cotton textile companies. Now, what matters is how companies survive this painful period.

It will take time before the situation improves. At present, the Xinjiang Production and Construction Corps' cotton has not yet been harvested in large numbers. Due to the fact that a large part of the cotton of the Brigade was harvested by machines, the machine harvesting must wait until more than 95% of the flowers matured and the cotton leaves fall before the machine can be harvested. It is expected that the large amount of mining time will be around the beginning of October. The industry believes that until the new cotton price is stable, it will take at least one month after the new cotton is produced. In addition, the “Trial Implementation Plan for Cotton Target Price Reform in Xinjiang” stipulates that this year’s cotton inspection will be subject to “banking public inspections,” which in turn will delay 10 days or so and estimate the time for processing the lint into the coastal cotton mills. To be delayed until mid-late November.

Tang Xiyi, Assistant to General Manager of Wuxi No. 1 Cotton, believes that the improvement of the business situation will at least wait until after the New Year. He said that the downstream cotton spinning factory originally thought that the country would not intervene in the market, so it could directly purchase cotton raw materials in the cotton production area according to the requirements of its own orders and product lines; however, it had killed a “plain check” on the way. The policy has made cotton trade much more variable.

Some companies believe that the “banking public inspection” will delay the arrival of new cotton out of Xinjiang, and may increase the cost of 300 yuan to 400 yuan/ton. The person in charge of a certain textile company said that because the processing plants are all producing at the same time, the "banking public inspection," then the cotton processing plant produced bales and sent them to the supervised warehouse. In this way, at a certain time, In the segment, cotton processing plants are required to queue up for warehousing, queuing inspections, and re-queuing for delivery. This will inevitably delay the time taken by cotton to cotton mills.

Most cotton textile companies stated that in the long run, the new policy is conducive to further promoting market fairness. The person in charge of the Baijiahui Textile Co., Ltd. said that because the government released the cotton target price reform signal in advance this year, many downstream companies have already smelled the opportunities for the lower prices of the cotton yarn in the upper reaches. They have called to order products, and some downstream companies have actually been disposable. Booking 100 tons of cotton yarn, we can see that this round of price cuts is very attractive to the downstream industry. The person in charge said that the implementation of the Direct Subsidy Policy has truly brought cotton prices to the market, and cotton textile companies will sooner or later fall out of the “difficult cotton price difference between inside and outside”.

Before the production of high-yield yarn was blocked or blocked, Liu Xiaonan of the National Development and Reform Commission made it clear that next year, in addition to the 894,000 tons of cotton import quota promised by the accession to the WTO to meet the demand for textile and cotton, no additional import quota will be issued, and domestic textile enterprises will be encouraged to use more domestically. cotton.

The news came out and caused a new round of worries for cotton textile companies. According to the terms of the agreement when China joined the World Trade Organization, China implemented a quota management system for cotton imports. There are two kinds of import quotas, one is tariff quotas and the other is foreign quotas. The total tariff quota is 894,000 tons, and the tax rate is 1%. The tariff-exempt quotas implement a sliding tax system. The lower the import price, the higher the tariff.

Due to the high domestic cotton prices in recent years, textile companies have a large demand for foreign cotton, and China has a huge amount of imported cotton. But now no more slip-tax import cotton quotas, only 894,000 tons of high-quality foreign cotton import quota can be imported, it also said that the domestic cotton textile enterprises will produce a huge gap of high-quality cotton, domestic Cotton textile companies, especially high-end high-count yarns and bleached yarn production, will “break the grain”.

According to industry analysts, the state only issued 894,000 tons of tariff import quotas to digest huge cotton stocks. After years of storage, Treasury has already had the world's largest cotton storage. At present, the storage of the State Reserve Cotton exceeds 10 million tons, and the pressure on stocks is very high. Restricting imports will enable domestic textile enterprises to use more domestic cotton.

However, some companies have expressed great concern about restrictions on cotton imports: At present, the price of foreign cotton is only around 11,000 yuan/ton, and the domestic cotton price is still very high, and the quality of domestic cotton is poor. The State Reserve Cotton has received cotton for consecutive years. Its cotton stock is one year ago, two years ago, and even three years ago, the quality of cotton has dropped sharply, and it is difficult to meet the demand of domestic textile mills. After tightening imports, domestic high-yarn production may be hindered.