The Textile Industry Will Be Restructured, And Smes Will Be Eliminated.

The rise in cotton prices will accelerate the restructuring of the textile industry, increase the concentration of industries, and eliminate a number of small and medium-sized enterprises. This is also the general trend of industrial adjustment.

In October 15th, China's cotton price index (CC Index 328) 24177, up 254.

On the previous day, the first four contracts of ICE cotton futures closed at a daily limit, and the December contract closed at 114.87 cents / pound, up 400 points, a record high.

Cotton futures rose sharply before the US Department of Agriculture announced the market's eagerly awaited monthly supply and demand report.

The United States Department of agriculture reduced the world's largest cotton consumption in China's 2010/11 cotton production forecast by 1 million to 31 million 500 thousand bales, and raised the Chinese import estimate from 12 million 750 thousand packages to 13 million packages, reducing the end of China inventory estimate from 16 million 10 thousand packages to 14 million 720 thousand packages.

Driven by the contradiction between supply and demand, and the international cotton futures market, the domestic market

"The cotton industry chain is very long, and it is related to all aspects of the national economy and people's livelihood. Once the supply exceeds demand, it will rely heavily on imports like soybeans, and the impact on China's entire textile and garment industry will be very large."

Li Ruzhong, deputy director of the cotton research center of Shandong Academy of Agricultural Sciences, told reporters of "financial and Economic Weekly".

Cotton prices have been fluctuating in recent years, and cotton prices have reached a new high this year, making the market's voice for the country to strengthen its macro tone.

Behind rising prices

"Shortage of supply is the main driving force for cotton price rise."

Xu Xiaoqing, Vice Minister of rural economic research of the State Council Development Research Center, said in an interview with the finance and economics weekly.

In the first half of 2010, due to the weakening of the financial crisis, the export of China's textile and garment industry was restored, and the demand for cotton increased greatly.

However, the impact of the financial crisis in 2008 led to a sluggish export market for cotton textile products, a low cotton price and frustrated cotton growers' cotton planting. In 2009, China's cotton sowing area was reduced by 12 million 400 thousand mu.

China's total cotton output in 2009 was 6 million 370 thousand tons, down 1 million 120 thousand tons compared with 2008. In the normal cotton production year, cotton gap was around 4 million tons, and the reduction in 2009 led to a further increase in cotton gap this year.

At the same time, in August this year, there were more rain in the the Yellow River basin, which was extremely unfavorable to the cotton growing in the bud stage, resulting in the reduction of cotton yield and quality. Li Ruzhong estimated that the total cotton output will decline by 20%~30% this year.

According to the National Bureau of statistics, there was a difference of 2 million 690 thousand tons between cotton supply and demand in 2009, compared with 6 million 260 thousand tons in 2010, an increase of 3 million 570 thousand tons compared with last year.

On the international side, the cotton production in Pakistan caused by the floods, the increase in import demand from China and Brazil, India's restrictions on cotton exports, the continued depreciation of the US dollar, and the promotion of the international cotton futures market...

All affect domestic cotton prices.

In order to ease the contradiction between supply and demand in the cotton market, the Chinese government began to throw away its reserves in August 10th, but from the trend, the price of dumping and storage has gone up and down, and the bottom has rebounded at the end of August, and has increased rapidly after mid September.

For the unusual performance of the cotton market, Mao Changqing, an analyst with CITIC Securities, told reporters in the finance and economics weekly that because of the obvious reduction in cotton production this year, the market will expect higher cotton prices in the future.

At present, Shandong, Xinjiang and other major cotton producing areas have started to acquire new cotton, and the highest purchase price of seed cotton in some parts of Shandong is over 6 yuan / Jin.

Whether the new cotton listing will stabilize the current cotton prices? Du Min, the Ministry of agriculture's Rural Economic Research Center, told the "financial and Economic Weekly" reporter that the state reserve cotton inventory is limited, and the demand for cotton is still strong under the expected reduction in production. The market gap is very large. The new cotton market has limited effect on the control of cotton prices, and the trend of price rise will continue to spread in the future.