The cotton spinning market in 2017 is fπσull of uncertainties? Indu βstry experts analyze the tre&γnds.
Release time:
2018-01-27
Source:
On March 27, the fifth ®¶©↕expanded meeting of the f✘ ourth executive council of the China Coλ©×tton Textile Industry Association an↔☆↕d the 2017 Cotton Texti ♣÷ le Market Situation Analysis Co ↑•×nference was held in Cha¥×ngzhou, Jiangsu. Xie Ming, president o&'f the Jiangsu Textile Industry Associa♣♣tion, Duan Xiaoping, vice presiden₩☆≠t of the China National Textile and Ap÷≈§parel Council and president of the Chi "na Chemical Fiber Indus♥←try Association, Zhu λγBeina, president of €↓Ωεthe China Cotton Text ile Industry Association, Wang↓±εγ Shengmin, deputy director ofγ≈ the Agricultural Produπ"♣cts Price Division of the Price Depart™¥Ω ment of the National Development ←and Reform Commission, Yu Xiaox±↕in, director of the First In↑✘spection Division of the China Fi≤δber Inspection Bureau, Y←¥≥e Jianchun, vice president of 'αthe China Cotton Textile Industry Asso♠↓ciation, Zhu Jianjun, genera✘ l manager of Zhongheng Dayao ¶¶Textile Technology Co., Ltd.,>""✘ and the general manager of the cottonγ₹♦ department of Louis Dreyfus (China) C Ω™o., Ltd. attended the meetλ≥$ing.
On March 27, the fifth expand≈≠ ed meeting of the executive council o&"∏>f the China Cotton Textile Industr←≈y Association and the 20←¶✔17 Cotton Textile Market Situation Anal>&•ysis Conference was helδ★d in Changzhou, Jiangsu Province.
Guests attending the meetinφ®g included Xie Ming, Presid∑↔<ent of the Jiangsu Textile Indu€₩✔δstry Association, Dua↑'n Xiaoping, Vice Presid£±ent of the China National T←≈$<extile and Apparel Council and Pre© sident of the China Chem✔>€ical Fiber Industry As★☆™sociation, Zhu Beina, Pre ↓sident of the China Co©☆™tton Textile Industry Association, W ₽ang Shengmin, Deputy Director of tλ'he Agricultural Products Price Di∞↑vision of the Nationa÷✔l Development and Ref≤₽ orm Commission, Yu Xiaox™αin, Director of the First Division of t✔☆λhe China Fiber Inspection Bureau, Ye J→♦ianchun, Vice Presiden♦€t of the China Cotton Textile Iπγndustry Association, Zhu Jianjun×↓, General Manager of Zhongheng&→ Dayao Textile Technology Co♣<., Ltd., Li Nan, General Managerσα₹ of the Cotton Department of Louis↓£× Dreyfus (China) Co., Lt₽εd., and representatives from cotton teσ←xtile enterprises.
At this meeting, the guests ≤∞≤discussed current hot topics in th✔εe cotton textile industry >® , including the domestic cotton t≈✘extile market situation, trend' s in the international cotton mar€™ket, and changes in cotto₽←n target price subsidy policies.
1. Textile Industry Forecast for 2017
Duan Xiaoping, Vice President of©©$♦ the China National ε£≤ Textile and Apparel Cou ©ncil and President of the China☆€×¶ Chemical Fiber Industry AΩssociation: The signs of re←αcovery in the textile industry are no≠"t obvious.
In 2016, the economic bene ★fits of the textile indu≈βα≈stry stabilized but s☆ lowed down, structural adjustm↔±≥±ents accelerated significantly >←Ω, global layout trends be≈came apparent, domestic sales growα✔th remained flat, and operati≈&onal quality improved.↔←∏£ Duan Xiaoping stated t₽hat currently, the sign∏"s of recovery in the textile iπλndustry are not obvi₹ous, and the operational sit ×εuation of enterprises in 2016 was not a>↕ s good as the statistica€εδl data suggests; it is still too early✔φ to say that the 'industryφ✘£ is warming up.'
In 2017, global economic growth i↑"αs expected, the outlook fβγ¥or developed economies wi§∏ ll improve, and emerging markets willγ♦ remain the core driving force for ecoβδ$✘nomic growth, but market risks $♥are also increasing. Internationally≥Ωδ, various factors suchδ♥♦ as President Trump's new policies, th♠←±≈e Federal Reserve's interest r→ate hikes, and elections in E©★uropean countries have made g♠π€•lobal trade growth exc<γeptionally difficult. Compared to the β≥₹≠international market, the domestic mγarket also faces both♦™ opportunities and challen¥≈✘↕ges. Factors such as the accel≈↑₹eration of urbanizat∏±ion, the relaxation of the two-childσΩ ↔ policy, advancements in internet♦↕ππ integration, and the grow£φing potential of the light luπ≠≤φxury market are promoting the ex€ pansion of the domestic text©¶ile industry market. Howeve ↕r, as the proportion of cloth §λ÷ing expenditure declines, the dee¥πpening of rational co•₽§λnsumption concepts, and the pursuit of£® cost-effectiveness increase, the deve →≤♥lopment of the textile iαφ$ndustry faces significant cha↔→÷llenges.
Duan Xiaoping predicts tha¥σ≈≠t in 2017, international demand is e×>xpected to rebound u nder the influence of ®ε≠↓the United States. Regarding domπ estic sales, Duan Xiaoping≠←$ pointed out that macroeconomi↔•→ c stability and inco₽≈me growth will continue to e'♠ xpand domestic sales. If t←•∞he opportunities for consumpt§π♦↕ion upgrades can be sei←•zed, improving product quality and redu≤™cing costs on the product side×®, and meeting consumer experienc♠π£♦e on the retail side, th∞✔e domestic demand ma☆★$"rket can maintain a certain level of↓Ω growth.
2. Analysis of the Do↕ ≥©mestic Cotton Textile Market Situation
Zhu Beina, President of the China Cott♣✔on Textile Industry Association:
From adapting to the new ↓≥¶normal to leading the new norma™$'αl
Since the second half÷ of last year, the cotton textile indu∏☆↕stry's market has generally performe®™d better than the same period¶← in 2015, with product prices<↑ rising. However, this is not entirely× driven by downstream€λ demand, and enterprises should ha♦♦≠"ve a clear understanding. At t×¥he start of 2017, cotton te≠∑xtile enterprises overall operα₽αated well, with low product in♦↔←™ventory levels, suff©✔icient orders, and a ∏✘slight recovery in th™™e prosperity index.
The use of chemical f♣<γiber raw materials in the industry↑≥ is becoming increasingly widespread,↓π✔ and cotton textile enterprises ★φare more enthusiastic abou£"≠t chemical fiber raw materials,♦ε resulting in richer produc€₽ts and reduced risk. Market confid"∑ence among participants is beginning♠$ to recover, and factors such™× as the reform of the cott♣↑•on system, the promotion ofγ→>• high taxation and low dedu≠δ≈ctions, and the steady n∞ arrowing of the price gap b∞∏etween domestic and foreign cotto∏₹n have supported impr∑¥®£ovements for domestic cotton textile enσε terprises. Currently, investment in Xi∞©njiang is still growing, and enterpri₹εses are steadily moving £∏ forward, with industrial transfer an✘₹d investment becoming more rational, aπ±nd market dominance becoming stro÷σ'nger.
In the face of various ÷✔→↑unfavorable market factors, enterpri α≤αses are actively responding, impleme →nting the 'three product★≤γ↔s' strategy, and proactively§™¶Ω adapting to the new norma"✘$ l. In the process ofλ≠ expanding profit margins, they are shi< ↑fting from pursuing speed to purs₹♦ uing quality, from cost-cutt"ing to innovative developmeλ≈ nt, and from focusing on develop≠≠♣↑ment speed to enhancing prod↑₩∑uct added value. It canφβ be said that enterprises have begun≠≈> to lead the new normal.
Ye Jianchun, Vice President ™★± of the China Cotton Textile Ind≈δ÷≈ustry Association:
The competitiveness of≠©'← the domestic cotton yarε♥n market is gradually increasing.
According to statistics f'rom the China Cotton Textile ♣£Industry Association and the Ch±✔↓ina Chemical Fiber Ind®↔ustry Association, in 2016, the c€ ₩★otton fiber used in cotton textile w↑λαφas 7.15 million tons, &γ×↕a year-on-year increase₹☆ of 6%; non-cotton fibers (including≥∞ polyester staple fiber₹↓ and viscose staple fiber)₩> were 12.63 million tons, a yea☆λ↔r-on-year increase of 0.2%;ε∏¶ totaling 19.78 million tons, a y₹≈✔★ear-on-year increase of 2.2%; cot☆↑✘εton fiber accounted forβΩ 36%, and yarn production was 18.8¥♦×4 million tons.
Since the national announcem€₽ent of the release of reserve cotton<π₽ in April 2016, domestic and for↑÷πeign cotton prices have÷÷♥₹ gradually aligned. After th¶σ×αe release of reserve ↑®±∏cotton ended at the end of September, the price gap betwe©&♠en domestic and foreig±n cotton widened again to arou★↕">nd 2000 yuan/ton. Currently, the pric'♥e gap is around 1000 yuan/ton, an≤♥®∏d with the start of the $•release of reserve cotton, influen•≥✘≈ced by the pricing m♣±echanism, the price gap is expe₹☆♣¶cted to narrow further"≥∑.
On March 6, the release of¥↓≠ reserve cotton began. As the release wγ♣✘ork progressed, texti∏∏₹λle enterprises slowed down thei≤'r bidding pace, and the average d™"™>aily transaction volum'← e and transaction price of reserΩve cotton continued to decline. The reφ≤₹duction in the transaction pri€↓ε↕ce of released cotton has ε¥&affected the spot ma≈♥rket, leading to sluggish sales ≥×and a price drop of 100 to 200 yuan/↔£↓÷ton. Currently, the price for β÷high-quality hand-picked ≤§≥♥cotton in Xinjiang's 'Doubl×αe 29' is around 16,000 yuan/ton, buβ∏ t the price of high-quality cott€ ±on remains firm. The inter≥≥action between futur&$¶>es, spot, and released prices has© created a lack of support fro♣&<m downstream, and enterprises are in a γ'state of wait-and-see. Theε₽Ωφ quality of cotton is good, and the pri<♦₽ce still has a significant a&♣₩dvantage.
In 2016, affected by factors such as ti↓®ghtened quotas, the narrow$ββing of the price gap between domes♠₽tic and foreign cotton, a€×nd the release of reserv ∏e cotton, China imported a to'¶tal of 896,600 tons of coΩ'tton, a decrease of 575,9>✔∑<00 tons year-on-year, a reduction o♥&f 39.11%. In 2017, with thα™©e national department increasing→β• quotas and the narrowπ✘ing of the price gap bet≈♣∑♠ween domestic and fo×↓±reign cotton, it is expected that t'φhe cotton import volume ≠ in 2017 will not change much compa✘€ ×red to 2016, and the cotton usag£↔♣§e will increase somewha↔αt, but the increase will be li≈<♣λmited. The import ofα$ cotton yarn is closely relλ≠δated to the import of cotton, and cur←§÷rently, the import volume of cotton yarβ™n in China is also declini¶ε↕ng. As the price gap betw™₩™een domestic and foreign cotton naδ× rrows, the price advantage of imported φ↑☆'yarn will weaken, and ✘☆®≠the competitive advantage of do βmestic cotton yarn will gr₹↕adually increase.
3. How will the target price sub£₽sidy for cotton change?
Wang Shengmin, Deputy Di↓εrector of the Agricultu ¥ral Products Price Divi§≥π"sion of the National DevΩ∏elopment and Reform Commission:
The target price subs ₩idy policy is continuously £δ↔optimized.
The pilot work for the reform σ of cotton target pr®δices in our country σwas completed in 2016. This π€$pilot policy ensured the basi¥₹c income of cotton farmers and play←§✘ed a good role in the reβγ×form of supply measurement, leadi↕$∑ng to the concentration ¶of cotton production i≥✔n Xinjiang and the development of c∑™"otton towards high quality and h®↔↑→igh price. The three-year pilot e♦βnded in March 2016, σ≥and during the evaluation of the cotton✘≈ target price reform pilot, some is$πsues were also discover "ed, such as the price being fixed ™₽φ←for a year and adjustments being "φtoo frequent, and the ↕♠subsidy method for cotton stil×l having unscientificβ€ aspects. How should it b☆"£e changed? Should the upcoming cotton tλσφ÷arget price subsidy be linked tσ<∑✔o cotton quality, etc.
Wang Shengmin stated that on Ma÷§>rch 17, the National Development and π≥≥Reform Commission and the Ministry★¥ of Finance jointly issued t∑≈εhe 'Notice on Deepening <$the Reform of Cotton Target Pri'βces', which made some adjustments to th∏↓β"e cotton target price reform, includi≥>ng changing the subsidy ₽↔target price from a f∑ ÷ixed one-year period to a'®• three-year period, determining the c ™βotton target price level bγσ$σased on the production•∑ costs and reasonable profit×≥s of the past three years, optimi≥&zing the subsidy method, and implement♦✔→÷ing upper limit management on ÷÷Ωthe quantity of cotton in Xinjia&παng that enjoys target price su←£×♣bsidies, with the upp♣✘σer limit set at 85% of the n∑≠∑ational average cotton yield during th "e base period (2012-2014).™£ε¶
The next step in the cotton targe$↔t price subsidy plan is to study the r γ♦eform of cotton subsidy policies in t•∑♥∏he mainland and provide appropriβ↑™<ate subsidies for cotton planting in ↕÷λthe mainland with suitable policieα↕ s. Implement the policies in Xi♦njiang, monitor the e♥₩ffects, track them in a∏←✔γ timely manner, and allow local ÷γgovernments to test methods for cottonβ↑§ price subsidies.
Director Yu Xiaoxin of♥÷ the Public Inspection Division ₹ of the China Fiber Inspection↕∏ Bureau:
The quality of cotton in our coun ♣§$try has improved significan♣φ∞tly.
From 2011 to 2016, the average l≤♠§ength of cotton inspected in X>≤δinjiang was 28.78mm, 28.53mm, 28.₹₽70mm, 28.71mm, 28.56mm∞✘ , and 29.05mm respectivel≠↕♦y. The micronaire value of Xi→<→'njiang cotton has shown ≈♠♠↓a trend of annual incrα≠ease, reflecting that cotto≠n fibers are gradually becoming ♦♦thicker. Other inspection indicators&₹₽, such as color grade, are all<§ better than those in± the mainland.
It can be seen that during the coδλ×tton storage period, the leng £ th of cotton decreased significant₩&₩¥ly, while after the implemen↑ ™'tation of the cotton target price re♣form policy, the quality of cotton in &™∞Xinjiang has improve£λd significantly (the length declined ∞≤€ in 2015 due to weather r α↑easons). Among them, the✔λ average cotton length in 2016 wπ"δas the best in recent years, wit×σ§h the proportion of cotton leng ths reaching 30mm and above reacσ> ∞hing 11.59%, while in the yea ™rs 2011 to 2015, the highest proporti±↑→$on of cotton lengths ≤ ≈™reaching 30mm and above ←•was only 5%.
Yu Xiaoxin analyzed that the₩♠ factors affecting cot∞<σton quality are primari$$× ly policy factors, which have a g☆ uiding effect on cotton quality. Second≈'↔∑ly, there is the impact of climate, fol≤±π±lowed by the influen>δce of cotton varieties and planting↓γ factors, and finall←≈y the impact of cotton processing met ★hods. He particularly∑φ↕♦ pointed out that curren☆€tly about 70% of the cotton produ↕>ced by the Xinjiang Production δλand Construction Corps is machine-harve↕×sted, and there are significan••★t differences between th•←e planting methods of machi↔→ne-harvested cotton and hand-picked cδ>'₽otton, while there is no obvious dif★♦←ference in processing meth&≠ods, which greatly dam ↑ages the cotton fibers.
Yu Xiaoxin suggested continu≈ing to deepen the reform of cotton t₩★arget prices, continuin'<₽g to guide cotton pricing based on♦δ quality, balancing quantity and qualiΩ&←∞ty, implementing price and subs✔ ≤>idy separation, and using ₽the demand of spinning ↔ δenterprises to guide ↕≤ cotton production. Stren±§gthen the management of cottonλ≤ varieties and large-scale pδ☆♣lanting to improve the unifor₩®mity and consistency of co↔γtton. Use cotton plantin₹δ≥¶g and processing methods that are coα₹Ω'mpatible with the technology of♣© machine-harvested cotton to comprehen✔→εγsively improve cotton qual$Ωity.
Director Yu Xiaoxin of ∑φ∞₹the Public Inspection Divi₩♦sion of the China Fibe←γ'✘r Inspection Bureau:
Ensure the public inspectio $n speed of reserve cotto >♥n this year.
The rotation of reserve cotton:±Ω The implementation of package inspecti≤≠on for reserve cotton ha✔→s been welcomed by tπδ↓extile enterprises, wit<h only two quality complaints©↓ ♦ regarding reserve cotton λ∏rotation in 2016. For this year's rot∏♥βation, to avoid a sh ∏ortage of supply, the China Fibe₹€∏r Inspection Bureau beganδ≈₩π the inspection work for rese±♣rve cotton in 2017 starting ¶≥¶in October 2016, so this year's reserve±♥✔ cotton rotation, at the curr'≈↑ent pace, the China Fiber Inspection Bu↔±φ≠reau can ensure the public inspecti♣on speed, ensuring that the cot₩λ₩±ton purchased by enter≈prises can be quickly released fro↔±m storage.
Chairman Sun Ying'an of ¥βπ¶Hubei Xiaomian Industrial Group Cεφα↑o., Ltd.:
Suggest reducing the c♦ osts of reserve cotton.
Sun Ying'an introduced ↓∏that Xiaomian Company mainly≥ε produces pure cotto☆® πn yarns ranging from 5 to 100 co₽¥§unts, and every year, φ↑♠↕the company requires a large amount✔£ of reserve cotton, with 80% oφ±φf the company's raw materialsε sourced from reserve cot→★♦ton. Last year, the implementation o∏₩ ≈f package inspection for re✘"®serve cotton rotation indeed ensu₩βred the quality of reserve cotton pur ↔₩chased by enterprises, which t©↕₩he enterprises were very s↓"atisfied with.
Sun Ying'an stated that the prφλ<®omotion of reserve cotton r₹♥☆∏otation is continuously improving, ¶¶but personally, he believes that th✔↑$e storage fee of 45 yuan/ton for reserv≠₩φe cotton is slightly high and suggests✘> that the rotation feeσ₽←α for reserve cotton could be ↕λreduced.
5. Domestic cotton market∑Ω$ demand forecast.
Li Nan, General Manager α↕of Louis Dreyfus (China) Co., Ltd. ¥∞≠Cotton Division:
The world cotton market is ₹transitioning from oφ&δversupply to a supply gap.
The global cotton industry has rea↕§✔ched a turning point,<↔' with the area of cotton in the world ≤≥εdecreasing from 36.11 million hectק₩ares in 2011/2012 to ®29.31 million hectares i∏✔n 2016/2017, a decrease of over 20%. Lo∑©♣w prices have led to cotton consu≠∞σ↕mption rising from 22✔₩.7 million tons in 2011/2012 ↔↔→to 24.5 million tons in 2016/2017, an i✔£ncrease of 8%. The oversupply ha∏★s turned into a supply gap,≠δβ and by the end of this year,×∞✔ the world’s year-end inventory is expeλ→cted to decrease from the reδ•φcord of 24.4 million tons in 201φ☆4/2015 to 19.6 million tons, a decrease•αγ↔ of 20%. Currently, ★↑×global cotton consumpti∞¶✘on exceeds production ®λ↓by 8%, but growth isε₽ slow, with 2/3 of t÷₹☆he world's polyester productio∏ εn capacity in China, and prices onl↑βy half that of cotton. The use of syn₹£¶¶thetic fibers in China's <♠≥textile production i™→♣δs increasing, and global cotβ§ton consumption is gradually r♥™ecovering to 24 million tons, while gl¥λ₩obal cotton production is only ↓ ☆22 million tons. China's >←¶cotton policy has a huge i±₩÷mpact on consumption, leading to slo←π&w growth in global cotton consumption.&γ$
Looking ahead to the 20< ↓16/2017 fiscal year, global ↑£>cotton consumption is expec £ted to exceed production once aga™×π®in, with a projected increase of 2-↔®¶3%. The low-price rotation of rese₹↔®↓rve cotton in China is expect'<ed to promote consumption, φ☆πand the world’s year-©€ end inventory is expecte$® d to decrease by 1.5 to 1.7 mi ₩σ£llion tons. It is esti↔×mated that the future cotton suppβ♦←ly gap in our countr±→→✔y will be around 3 million ∑ε★ tons, and the national reser"∞✔ve cotton may reach a ₩↕÷relatively ideal low level in the♦¶ 2018/2019 fiscal year, assum₹₽₹ing it is in the range of 2♣≈↓.6 to 3.3 million tons. The reser♠'✘ves will not meet the supply gap π£∏and will have to increa ™"←se production or imports to ←∞resolve it.
6. Hot fabric forecast f×₹εor 2017.
Zhu Jianjun, General Manager of Zho₽ngheng Dayao Textile Technolog₽✘ •y Co., Ltd.:
Downstream demand determines uφ✔Ω₩pstream production strategy.
Zhu Jianjun analyzed the char £acteristics of the downstream marke±£♠↑t in the cotton textile indus≈↕®£try—yarn and fabric products. He sta♣$↓ted, "In 2017/2018, π₽♣the trend for cotton fiber woven p᧣roducts will be smaller ✘שbatch sizes, with cotton ble≈Ω•nded with all fibers₽↕λ, and almost no fabric will<★ be without stretch. ÷≥♦Super stretch and super softnes♥βδs will become the bigges®ε>t demand. Yarn must be able to achie₩ ve both black and white, mean≠<&ing it can be dyed black while also γ¶$being able to be bleached." He predicts✘÷™™ that in 2017/2018, specialt®Ω>≥y coated fabrics, doubε$le-layer fabrics, four-way st♥β£retch fabrics, high-stretch twil×↑l, large jacquard, hollow fabrics, si≤¶<ngle-sided dyed fabrics, and shi₩δ∞→ny materials will become popular★₹δ trends in textile and ¶☆$apparel fabrics.
Zhu Jianjun believes that≤"© good companies have several ke"φ<y characteristics: they manag♦₩e raw materials well, produce good prod₽γγ↔ucts, and innovate their↕φγ← business models effectively. Companies'✔ that excel in product qualityπ¶ also tend to have consistent quali♣≥→ty, sustainable sourcing, and rapid ≈εproduct updates. To produce good↓₹ products, it is essential αγto have stable raw mate₩"'rials; otherwise, orders are likely ¥∏to be lost. It is important to e♥♥≈stablish unique featureφ→$s and main products; otherwise, there®☆≥β is a risk of accumulating excessive ↔'inventory. The pricing o&₹™f new product developments₽®βπ should focus on cost-effectivenes<•s to avoid "overquality."
In addition, the meeting revie™♦ ∞wed and approved changes to the goσΩ'↓verning and member units of the China•ε∑ Cotton Textile Industry &₽←Association.
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