China'S Doubling Of Cotton Prices Has Made The Textile And Garment Industry Feel Chill Again.

China's "12th Five-Year" (2011-2015 year) plan put forward the strategy of expanding domestic demand and the adjustment of industrial structure, emphasizing the improvement of residents' income and distribution reform, which helps to steadily increase the total consumption of textile and clothing and product upgrading, and further enhance the concentration of industries by market competition, all of which will become investment opportunities in the capital market.

On the face of it, although large cotton production enterprises seem to be the current cotton price.

Especially in Europe and the United States, although the economy has picked up, it is still far from the level before the financial crisis. In the first half of this year, the pull back effect of the stock recharge in the export growth of the driving industry has subsided, and the export growth rate of the textile and garment industry is expected to further slow down.

"There are some irrational factors in" cotton and cotton growing up ". There must be some callbacks, but I do not think it is easy to go back to such a low level.

Xu Liang, a futures analyst in East Asia, said that because of the increase in land and labor costs, the price of agricultural products will be a long-term upward trend.

Contradiction between supply and demand and capital push are considered to be the main reasons for the current cotton boom.

Xu Liang believes that the price of cotton has been low for a long time, which has dampened cotton growers' enthusiasm for planting cotton, resulting in a sharp reduction in cotton planting area. So the contradiction between supply and demand imbalance has been concentrated this year.

In the past six years, the main contract range of major cotton futures contracts in Zhengshang is located between 12000-16000 yuan / ton.

Affected by the international financial crisis, the contract fell to a record low of 10110 yuan / ton in 2008, up to 17000 yuan / ton in July this year.

Then the rally suddenly accelerated, and last week the highest price of the contract reached 33870 yuan / ton.

China is the world's largest cotton importer and consumer. Statistics show that in 2009, the country's cotton planting area was 495 hectares, a decrease of 800 thousand hectares over the previous year, and cotton output of 6 million 400 thousand tons, down nearly 15% from the same period last year, a decrease of second consecutive years.

According to Reuters survey, China's cotton output in 2010/11 is expected to be around 6 million 450 thousand tons.

Cotton prices skyrocketed, and companies are happy and worried.

The rapid rise of cotton prices has subverted the distribution of profits in the traditional industries. Large scale yarn manufacturing enterprises have greatly improved their profitability because of their advantages in cotton reserves and purchase channels.

And the hoarding speculation of circulation traders also made them earn money. The biggest pressure feeling should be downstream clothing manufacturers and consumers.

"This year's profit is the thickest I've ever seen," said a manager of a large cotton spinning group in Shandong. "This year's profit is the thickest I've ever seen. Cotton prices are basically no pressure on us. Downstream demand is good, sometimes queuing up."