March 28, 2024

Cotton prices suffered heavy losses on roller coaster spinning companies

“Jin 9 Silver Ten” has always been the best time for textile and apparel companies to sell and take orders. However, this year’s situation is very different from that of previous years. The reporter learned from the Fujian Province Textile and Apparel Exporters Association that many textile companies in Quanzhou are not busy during the peak season. Some textile companies not only did not sell well, and even orders did not dare to answer. Due to the drag on the textile industry, some textile machinery companies not only failed to book orders for the next year, but also experienced subscribers not picking up goods.

The relevant person in charge of the Fujian Province Textile and Apparel Export Base Chamber of Commerce said that since the beginning of this year, the soaring and slumping of cotton prices has caused Quanzhou textile enterprises to suffer heavy losses. In March this year, when the price of cotton was pushed up to 34,000 yuan/ton, foreign cotton poured into the domestic market in large numbers. To prevent the price of cotton from continuing to rise sharply, many textile companies in Quanzhou bought high-priced stocks. However, the price of cotton dropped sharply. In July and August, it fell below 19,000 yuan/ton. Most companies did not dare to follow up and they were unable to follow up on the purchase. “The recent companies are afraid to take orders, because the current order prices simply cannot digest the Khmer prices bought in the previous period.” The head of the association said, “How to absorb the high purchase price of around 30,000 yuan/ton in March and April? The price of cotton has become the key to current and future orders received by textile companies. The 30,000 yuan/ton Khmer price, coupled with high labor costs, utilities, machine materials, and exchange rates, currently stands at 22,000-27,000 yuan. Tons of cotton yarn prices, cotton companies can only make more and more losses.

Faced with soaring cotton prices, "hard support" or stop work? This makes many textile companies tangled. In the face of the predicament, some small and medium-sized textile enterprises in Jiangsu and Zhejiang provinces have experienced the phenomenon of selling machines, long vacations, and “running paths.” Most textile companies in Quanzhou have chosen “hard support” and have not dared to stop work. "Because it is difficult to recruit workers after a short period of time, and once the debtors and suppliers are stopped, they will immediately come to the door." Some companies said.

The rapidly changing cotton textile industry has also affected textile machinery companies. Quanzhou textile machinery enterprises reported that from July this year, textile machinery and supporting companies began to appear a small number of non-delivery phenomenon, and there is a deteriorating trend. September should have been the peak season for Quanzhou textile machinery companies to take orders for next year, but in fact, companies received only a small amount of orders in the month.

In response, the Fujian Province Textile and Apparel Export Base Association stated that the current international economic situation is complex and severe, and the economic recovery is still on the way. The domestic economy is still adjusting and monetary policy will continue to tighten. Textile companies must have long-term preparations, continue to increase product readjustment, preserve their strength, strive for transformation and upgrading, and wait for the textile industry to see greater development after the turnaround.

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