Recently, cotton, yarn, fabric etc textile raw materials prices are relatively dropped substantially, however textile enterprise production and operation condition did not appear big improvement.

Experts think, raw material prices, artificial cost rises, credit-tightening, yuan appreciation of such negative factors arise "accumulated superpose" effect, what impact will be on enterprise,.

MianJia drop has not let in the centralized push the high cost of China's FangQi on pant (breathe a sigh of relief. They are more sorrow.

Recently, cotton, yarn, fabric etc textile raw materials prices are relatively dropped substantially, however textile enterprise production and operation condition did not appear big improvement.

Experts think, raw material prices, artificial cost rises, credit-tightening, yuan appreciation of such negative factors arise "accumulated superpose" effect, what impact will be on enterprise,.

Funds to tight inventory cost cutting

Since march, China textile materials, yarn and fabric prices have been in decline channel. According to the first, according to the monitoring data of textile net two months, cotton, polyester short and sticky short price per ton fell 5000 yuan respectively, 1700 yuanhe 540 yuan.

March MianJia fall after the main reason is enough, downstream demand inventory reduction. Thus, FangQi not only with capital MianJia facing high fronts, also because order dramatically reduced caused days quantity inventory. "Because of capital chain taut, the increase in inventory, textile and garment enterprise management status is likely to worsen." ZhuQingHua said.

Jiangsu sumec textile international trade Co., LTD, told reporters WuWeiFeng assistant general manager for the original order has been buying fabrics, now raw material price doesn't make any sense.

He said, only those 1 ~ 2 months ago because of orders, still hasn't purchasing fabric, the price also can talk about, maybe slightly send some, will be a percentage of the profits.

According to understand, textile enterprise capital chain in procurement, sales two links appear disjointed, enterprise funds recycling difficulties.

Sumec textile international trade Co., LTD situation proved the above situation. This year, the central bank WuWeiFeng talked about four times since 'reserve-requirement ratio, loan interest then raise, textile and clothing export enterprise's capital chain are a bit tight.

MianJia fluctuations and credit policy by tightening and all kinds of rising costs to the influence of various factors, such as FangQi sales impeded, currently of ginned cotton procurement keep wait-and-see attitude.

Hua spinning Co., LTD is such. The company mainly produce and export home textile, bed is tasted, fabric, etc.

The director of the department QuWeiHua reflect, because MianJia might drop estimated earlier in large quantities, prices without the cotton.

National cotton market monitoring system show that the report released on April 11, textile enterprise yarn sales productivity to 84%, reduce 8.8 percent, compared to 2008, the lowest level since September Inventory Numbers as 26.5 days, annulus increases 13.1 days for 2009, its highest level since march.

Inflation also loss, fall also loss

First textile nets chief analyst wang said, raw material prices advance of enterprise, which in the long term it could reduce the cost of production and operation of the enterprise, but in the short term, may actually have negative effects on enterprise. Cotton is the main cost FangQi, accounted for about 60 percent of the comprehensive cost. Once the cotton price volatility, FangQi suffer management will effect.

Wang forward further analysis: "MianJia decline could spread and influence the cotton industry chain is not clear. Due to price movements, enterprise will delay procurement, affected orders and corporate profits, companies have cotton because enterprise also. If the price inventory of raw materials, and this year FangQi appear chain fall earnings will face greater difficulties."

MianJia rise not, also can fall. The cost for companies to drop, prices rose sharply, earnings cuts.

QuWeiHua said: "two days before the MianJia here in shandong province to 22,000 yuan ~ twenty-three thousand yuan/ton, has now cheaper than the original $5,000 to 6,000 yuan/ton, raw material costs to ease the pressure. Because we can not predict the future cotton will fall to what price, now the company according to batch purchase orders small cotton. Though orders than previous have improved, but not much improved. Because foreign customers are also looking at the price will go down, see what level cotton decide to order again."

WuWeiFeng pointed out: "bargaining is a change process, raw material prices fell, the customer side will also demand for cotton. In addition, ample supply, price low, many cotton orders are already transferred to Bangladesh, India and other countries."

Cumulative superpose "effect faded in

Although a recent cotton prices fall, but China textile clothing industry low value-added products, plus artificial cost rises, credit-tightening, yuan appreciation, and heavy inflationary pressures makes Chinese consumer spending will continue to fall, the textile and apparel industry of domestic demand is growing slowly, it doesn't benefit with improvements in textile enterprise production and management.

These factors "accumulated superposition of enterprise of pressure," appeared gradually.

Wang forward said, in the first quarter from last year, these factors on the industry production management restrict power is more and more obvious.

According to wang, has yet to publish on the forecast the first five months of this year textile clothing industry profits index will appear growth slowed sharply trend. "From a business look, besides export growth, basic all indexes are apparent, including profits, yield, textile industrial added value, etc." Wang forward says to the reporter, "bureau of textile industrial added value in April last year, year-on-year increase 5.9% in the data basic maintain above 10%. This means that the textile industry starts, output, profits are present growth slows down, down from a flank trend, reflects the textile industry overall performance. In the second quarter of this year, the third quarter will be FangQi lull in business."

This year China textile and clothing industry whole export situation is sorrow. Although industry sales growth, but industry development appear still resistance is heavy. But textile enterprise fronts won't continue to deteriorate. On the one hand, MianJia prices will tend to long-term stability, with the downstream demand gradually to increase, textile enterprise profit margins will gradually release; On the other hand, because recent rainfall scarce, Yangtze river on this year's cotton cultivation is likely to cause, is expected to affect the cotton stocks will gradually be consumed, cotton prices will continue to thaw.

Source "Chinese textile nets"

Edit: Emma