Zhejiang Wenzhou needle cotton fabric enterprises calm cotton "bullish"

On March 5, the DGFT issued a statement saying that since the declaration was issued, the export of cotton of the tariff numbers 5201 and 5203 was immediately banned until the government issued further instructions. India suddenly announced the ban, leading to the US cotton daily limit in Asian time, Zheng cotton quickly pull up, 1209 contract closed at 22040 yuan per ton, compared with the previous Friday settlement price rose 280 yuan, or 1.29%. Domestic cotton prices have risen in an up-and-coming manner. Wenzhou needle and cotton fabric companies have said that they have no major impact and are willing to respond to cotton price increases.

“This year, the international market has little demand for cotton, and the overall situation is oversupply. Domestic cotton yarn prices should not rise sharply.” Wen Wen Kangnai Underwear Co., Ltd. Zhang Wenhu said that although India’s ban on cotton exports will have a certain impact on domestic cotton prices, However, from the perspective of cotton production supply, it should not have much impact.

At present, the cotton raw materials required by Kangnai Underwear Co., Ltd. basically come from China. Last year, the sharp rise in cotton prices was a roller coaster. "This year we deliberately signed a long-term agreement with several textile mills in Henan." Zhang Wenhu said that after an agreement is reached, no matter how the price of cotton rises and falls this year, it will be purchased at a price well-mentioned at the beginning of the year. To ensure the stability of raw material prices.

Xie Ancheng, General Manager of Wenzhou Nanfang Decorations Co., Ltd., also stated that India’s ban on cotton exports has no major impact on enterprises. “We have our own specialized suppliers in China, and this is a very stable purchase of raw materials.” In addition, the company currently reserves cotton yarns. Many, and from the cotton price fluctuations, to cotton yarn, cotton cloth prices will have a process. “Even if the price of cotton yarn goes up, it will not be too great for companies that do branding. Products can be sold high and high.”

More than 20% of the cotton needed by Zhejiang Beifalai Garment Co., Ltd. came from abroad, but it did not purchase Indian cotton. The current ban on cotton exports in India, although the company has not been affected, but it is bound to affect the cost of raw materials throughout the needle cotton industry. Huang Huafei, chairman of the company, said that this year, the overall market price of the cotton market is not good, but the final price of cotton depends on the supply and demand situation, the domestic cotton harvest is still unknown.

Ni Xueshen, chairman of the Wenzhou Arctic New Talent Costume Co., Ltd., believes that India bans cotton exports and domestic cotton prices have risen. This is not a bad thing for some needle-cotton fabric companies in Wenzhou, which mainly sell domestic products. Last year due to the weather, Wenzhou needle cotton fabric companies generally have more inventory, and now the price of cotton, cotton yarn, cotton cloth, etc., for these companies in the relative cost of raw material costs.

However, for some companies that mainly focus on foreign trade and have already received foreign trade orders, the rise in cotton prices undoubtedly means that profit margins have been squeezed. “The rise in cotton prices is a double-edged sword. The key is to see how companies can grasp.” Ni Xueshan said. (Wenzhou Business Daily)