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As the epidemic effects, the economy is gradually recovering, and the demand for various commodities is also slowly increased. Recently, the Russian situation has a certain impact on the global supply chain. The lack of supply of many goods is exacerbated, and the price is continuous.

01 international cotton prices continue to rise

According to US media reports, on March 28th, the US cotton futures rose, and the daily increase is up to 4%. New York previous month cotton futures contract reached $ 1.41 / lbs.

The media analysis, accounting for nearly 40% of the US total cotton production, the recent drought situation is more serious, and the future cotton production is very uncertain, plus Russian conflict, and cotton supply is tight. Cotton has been bounded twice in the past two weeks. Within 3 trading days, cotton futures increased nearly 9.5%.

More than just beauty cotton, Indian cotton is also strong, but the recent sustained high shock. Under the movement of foreign cotton prices, domestic cotton prices are not weak. Since March, the main force (CFM) of Zhengzhou Commodity Exchange came out of a wave of rising quotes, and the price was around 21,000-22,000 yuan / ton.

If the timeline is lengthened, this round of domestic cotton prices in the second half of 2020 has risen from no more than 11,000 yuan / ton, and the rise is more than 50%.

02 why cotton is strong

Domestic Zheng cotton gravity is moved to be a good demand for beauty, but in fact, the downstream needs of countries are not good. The factory is using it. It does not dare to make a lot of reservoirs, and the shipping problem is not resolved, resulting in short-term demand. Once the logistics returns to normal, the import country increases, the market is another scene, now more is a "false prosperity". However, under the influence of ultra-high inflation, ICE cotton is difficult to fall.

Wu Xinyang pointed out that from the domestic perspective, the deadlock of the cotton city continues, the upstream rolling factory adopts the leading strategy due to the holding of high-cost resources, and the downstream textile industry maintains the blending strategy due to low profit and weak orders, leading to domestic leather cotton The goods are slow. At the same time, China is still the main buyer of the current year of the US cotton. As the cotton imported sessile tax quota is issued, the marginal increments of China's future imports are worth looking forward to.

03 Textile Enterprise Profit is squeezed

At present, this round of cotton prices have risen, more is dominated by the supply surface rather than demand. In the context of the continuous rise in cotton prices, the profit of textile and garment is squeezed.

Wu Zhixiang pointed out that companies are now cautious, and they will communicate with customers. For example, if the price of cotton prices can bear in the range of the company, in order to safeguard customer resources, it will help customers bear this price increase. But if there is too much, enterprises cannot be borne, maybe and customers discuss how to handle increased prices, such as each of the price increase costs.

Wu Xinyang believes that under the impact of high cotton prices, the textile profit will be low. Throughout the globe, the cost of CPIs in the clothing class is often lower than the year-on-year growth rate of the CPI of the whole commodity service, and the growth rate of the following year is in 2%, which determines the relatively limited level of profitability of the entire industrial chain, and the cost increase is for the final end. The driving force of the conduction is weak, so the profit of the cotton broth industry will have average return.

For China's textile and apparel companies, it is also facing another question: foreign trade order diversion. In the above-mentioned development report, Central Plains futures pointed out that with Southeast Asian completion of production, the external single shunt is highlighted, and the cotton yarn, cotton cloth enterprises in the order of approximately 7%, decline in the same year.

How to deal with 04 textile enterprises

In the context of rising cotton prices, companies are also looking for countermeasures. Wu Zhixiang said that enterprises began to reduce cotton, and they would choose to produce polyester, adhesive, artificial cotton and other products. Although chemical fiber raw materials are also raising, but overall is not much. This may further affect the needs of cotton. Wan Xiaoquan believes that from 2022, the domestic and international cotton prices may have certain adjustments, but the adjustment range needs to pay attention to the subsequent new cotton planting conditions and the weather conditions of the production area.

Wan Xiaoquan said that in terms of demand, under the influence of global epidemics, the international situation, and in the context of macroeconomic, the demand for textile clothing is difficult to have better performance, and the demand will continue to suppress cotton prices. Expected cotton prices It will be gradually adjusted, but the new annual cotton planting growth has formed a new uncertainty.

Wu Xinyang said that last year's harvest season rose, giving global cotton farm cultivation, with the northern hemisphere gradually entered the spring broadcast period, and the rapid planting of South Hemisphere Brazil, the expansion expectation is landing. However, from planting to ultimate harvest, weather and fertilizer plays a key "role", as an important cotton exporter, the United States is facing a situation, abandonment rate, and a malfunctional increase amplitude of drought conditions.

"In addition, the current order is not expected, the domestic textile industry 'Golden Silver four' is empty. However, once the order situation occurs, the marginal return can trigger the textile industry's passive replenishment market." Wu Xinyang said.

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