The textile industry is unaffordable. Farmers are reluctant to grow cotton.

Zhou Shengtao, president of the China Cotton Association, revealed at the 2013 China International Cotton Conference that statistics from the China Cotton Association show that the 2013 cotton planting area in China fell by 6.7% compared with the same period of last year. The enthusiasm of farmers for planting cotton was not high, and cotton production continued to shrink.

At present, the trend of inverting cotton prices at home and abroad has expanded, and the high spread problem in the cotton market has caused downstream companies to agonize. What is the impact of inverted cotton prices on cotton farmers and downstream businesses? Why are farmers unwilling to plant cotton?

The "worry" of hanging upside down: The textile industry is unbearably high

A 50-yuan T-shirt, produced in Vietnam, costs only 15 yuan for cotton and labour alone. In this context, more and more Chinese textile companies plan to relocate their factories to Southeast Asia. Behind the pursuit of "manufactured in Southeast Asia," is the reality of the inverted price of cotton at home and abroad.

Zhu Bunana, president of the China Cotton Textile Industry Association, said that the current domestic cotton price exceeds 19,000 yuan/ton, and the spread between imported cotton and cotton reaches 4,000 to 5,000 yuan/ton, and last year it reached 6,000 yuan/ton.

In general, cotton raw materials account for more than 70% of the cost of cotton textiles. The high domestic cotton price has seriously affected the stable operation of the cotton textile industry chain.

“Foreign companies placing orders are usually priced in international cotton prices, but the cotton yarns they produce are produced using higher-cost domestic cotton.” Wang Zhixin, manager of Qingdao Xintiancheng Textile Co., Ltd. said that under normal circumstances, domestic and international With a cotton price difference of 2,000 yuan per ton, companies can maintain their competitiveness. The current spread has far exceeded the scope that companies can afford.

“International cotton prices fluctuate according to market supply and demand, and domestic cotton prices are supported by temporary storage and import quotas.” Wang Tiankai, president of China Textile Industry Federation, analyzed that different cotton price mechanisms at home and abroad are the current The main reason for the formation of cotton spreads at home and abroad.

According to Shi Chuanliang, chairman of Xiajin County Xinshi Cotton Industry Co., Ltd. in Shandong Province, in the face of the current domestic and foreign cotton price spreads of 4,000 to 5,000 yuan, enterprises without cotton import quotas cannot buy imported cotton and can only use high-priced domestic products. Cotton, which makes most of the small and medium-sized cotton spinning companies lose their competitiveness from raw material costs.

Wang Tiankai said that the domestic and foreign cotton price difference is within 2,000 yuan per ton. China's textile industry can hedge through technological progress and variety development. When the spread of cotton is widened to 4,000 yuan or more per ton, any technical progress and talent reserve in the textile industry in China are pale.

According to statistics, in 2012, the total value of China's textile and apparel exports increased by only 3.3% year-on-year, the lowest increase in recent years.

Upside down “殇”: Farmers are reluctant to plant cotton

The spread of cotton at home and abroad has made textile companies eager to use imported cotton. In order to limit the impact of foreign cotton imports on the national cotton market, China has implemented a cotton import quota system since 2004. The annual import quota for cotton is 894,000 tons. However, such quantities are far from meeting the needs of enterprises.

In fact, although the policy most wants to protect farmers, the income of the farmers is actually not too much. Due to the increasing uncertainty in the cotton industry due to the uncertainty of textile demand and the significant increase in the cost of cotton planting in recent years, the enthusiasm for planting cotton farmers has declined. Statistics show that in 2013, China's cotton planting area decreased by 6.7% compared with the same period of last year, and cotton production continued to shrink.

At present, why are farmers unwilling to plant cotton? "The most important thing is that the income of seed cotton is too low, which is time consuming and costly, and the price fluctuates greatly." Yu Junping, the station chief of the Xiajin County Bureau of Agriculture and Forestry, calculated an account: Now cotton, including seeds, mulch, fertilizer, The input of production materials such as pesticides rose rigidly. The labor cost for management and harvesting was not less than RMB 40 per person per day. This would be calculated at an investment of 550-600 yuan per mu, and would now be calculated at around RMB 4 per catty. The yield of 500 kg per mu will only be calculated. 2000 yuan, obviously low.

In order to stabilize the market expectations of cotton producers, operators and cotton companies and protect the interests of cotton farmers, China has implemented the policy of temporary cotton purchase and storage since 2011. Industry experts generally believe that the temporary purchase and storage policy has effectively protected the interests of farmers, avoided the difficulty of selling cotton, and kept the cotton planting area relatively stable. However, under the background of the current wide spread of cotton prices at home and abroad, some problems of temporary storage and storage policies have also been exposed.

Ding Haowu, general manager of the national cotton trading market, believes that the policy of purchasing and storing makes textiles, especially the cotton textile industry, spread more than they can afford, and it is difficult to survive. The state has collected and stored for several years in a row. The financial burden is very large. To meet the demand of enterprises' cotton, it is also low-cost. The operation of “high absorption and low disposal” has increased the cost of capital.

"Temporary purchasing and storage is the bottom price to protect the interests of cotton farmers. Such price intervention will inevitably distort the market price of cotton and cause difficulties for enterprises. If price intervention is not implemented, the interests of cotton farmers cannot be guaranteed." Researcher at the State Council Development Research Center Cheng Guoqiang said.

Upside down "solution": the marketization of cotton is a must

In fact, it has been a long time since the cancellation of the cotton quota system and the reform of the cotton purchasing and storage system. However, the question is how to protect the interests of cotton farmers after the quota is lifted.

At the China International Cotton Textile Conference, experts pointed out that in order to solve the crux of the current problems plaguing the cotton industry, it is necessary to reform the current cotton management system as soon as possible, and adopt market-oriented pricing mechanisms such as cotton direct subsidies.

Wang Tiankai proposed to adjust the temporary purchase and storage policy. When formulating the purchase and storage price, he must refer to the cotton price in the international market, reasonably determine the quantity to be collected and stored, and flexibly carry out storage and storage according to market price fluctuations, and play a role in suppressing market cotton prices. The role. At the same time, in order to protect the interests of cotton farmers and stabilize cotton acreage, direct supplements should be made to cotton farmers in accordance with the policy of direct subsidies.

According to the information disclosed at the 2013 China International Cotton Textile Conference, direct subsidies for cotton may become a breakthrough in the reform of the cotton marketization mechanism. Gao Yong, vice president of the China National Textile and Apparel Council, said that after more than two years of appeal, the policy of direct subsidies for cotton has been loosened, and more than a dozen cotton-related departments have unified their ideas and believe that direct compensation for cotton farmers is a feasible solution.

“China is a big country for cotton production and consumption. In 2000, textiles and apparel exports accounted for 20% of China’s total exports. In 2010, the share was 13%. Although the proportion has declined, the absolute value of exports still exceeds 200 billion US dollars.” Zhou Shengtao suggested that a long-term mechanism for the stable development of China’s cotton should be established in the future.

"We must stabilize the area, improve varieties, increase yields, and vigorously promote the industrialization of cotton. In addition, companies must boldly innovate and seek development through institutional innovation, management innovation, and technological innovation," said Zhou Shengtao.