Cotton Prices Rose &Nbsp, Some Of Them Were Bankrupt.

Recently, a difficult decision has been placed in front of Xu Lianli, a stocking manager in Liaoyuan socks Industrial Park, who is considering whether or not socks enterprises should stop working. Cotton prices rose by 10 thousand yuan / ton compared with the same period last year, but sales of socks decreased by 40%, and factories moved towards zero profits. A lot of cotton socks factories close to their own have stopped work, but once they choose to stop working, there will be a danger of workers' loss. If the factory starts again, it will be hard to find workers. After all, socks workers belong to technical jobs.

Feng Mengxiao, director of the research center of China cotton storage information center, said that the high price of cotton was caused by many factors such as tight cotton inventory, reduced production, and low quality. It is expected that cotton prices will continue to decline in the short term, and the difficulties of textile enterprises may continue for some time.

Quality and cotton prices

While costs are rising, sales are falling. Xu Lianli said that the weather is the root cause of slow-moving socks. This year's climate is out of order. The long and cold weather has followed the hot summer. The main consumer groups of cotton socks - young and female consumers will choose to buy cool socks at the moment, and cotton socks will naturally suffer from cold reception. Xu Lianli told reporters that the sales volume of socks factory decreased by 40% last year.

The double pressure of sales decline and cost increase has played an important role in Xu Lianli's factory operation. Many of its peers have stopped production or given workers a holiday, so as to save money. But Xu Lianli is worried that once the factory is shut down, factory workers will find new jobs. In this way, if workers return to work in the future, these workers will be lost, which will bring huge obstacles to future production.

"Cotton production has declined and quality has declined this year, which has strong support for cotton prices." Feng Mengxiao analysis, China's current cotton inventory is tight, cotton production year-on-year decline of 15%. At the same time, during the critical period of cotton growth, the main cotton producing areas such as the the Yellow River River Basin encountered continuous rainy weather, which caused the quality of output cotton to be seriously affected, making these cotton unable to fully meet the production requirements of enterprises.

Cotton prices are high and difficult to fall in the short term.

Feng Mengxiao further analyzed that behind the rise and fall of cotton prices may be hiding foreign capital speculation. A large amount of money capital which was not engaged in the cotton industry has entered the cotton futures market and speculated. It has further penetrated into the cotton purchase and sale market and intensified the rising trend of cotton prices.

"The new year's cotton planting intention has not been greatly improved, and the market's hopes for cotton production increase have been greatly reduced, which has become one of the supporting factors of cotton prices in the future." Feng Mengxiao said that the current difficulties faced by domestic cotton spinning enterprises are mainly due to the high cost. In order to ease the pressure on enterprises, the relevant authorities have made a lot of efforts, such as increasing imports and so on, to a certain extent, to make up for the shortage of domestic supply. However, because of the general decline in international cotton quality, the overall supply of high-quality cotton in the market is limited, and India, Pakistan and other countries restrict cotton exports, which also makes cotton prices high.

"It is expected that the next cotton price will continue to rise." Xu Lianli is not optimistic about the next step, but in order to remain in the market in the future, she said she will stick to it, and will not let the factory shut down, or lay off or cut production.