The price of cotton soared

According to the report of Qilu Evening News, Dong Huakang, chairman of Shandong Binjiang Huakang Textile Co., Ltd., ate 300,000 tons of cotton at a price of 30,000 yuan last year. However, this year, the price of cotton fell by 30%. Dong Huakang lost more than one million yuan during the month.

Like White Silk and Cognac, from the second half of 2009, cotton also experienced a thrilling price hike. From the initial era of 10,000 yuan, it quickly entered the era of 20,000 yuan and the era of 30,000 yuan. In the second quarter of this year, cotton prices suddenly turned down. Xinjiang's third-grade lint fell by nearly 5,000 yuan a ton a month. This month, compared with last year's peak, cotton prices have fallen by nearly 30%.

In September last year, the price of cotton rose from 14,000 yuan to one ton of 34,000 yuan, and cotton became one of the most profitable commodities. Cotton farmers, cotton mills, textile mills, even downstream clothing companies, printing and dyeing companies have joined the ranks of cotton. For downstream businesses, one ton of cotton, or cotton yarn, can earn a thousand dollars a day, but doing a piece of clothing may only earn a few dollars in processing fees.

However, in November last year and March this year, cotton prices plummeted.

The large fluctuations in cotton prices have already hit the entire industrial chain. China Reserve Cotton Management Co., Ltd. wrote the day before yesterday, saying that due to the slowdown in domestic economic growth, the textile and apparel consumption situation is not optimistic and restricts the destocking process of upstream companies. It is expected that the cotton market will remain difficult to decompress in the near future.

In Xiajin County, Shandong Province, which produces large cotton products, the purchase price of most enterprises' stocks of lint is more than 28,000 yuan per ton, and companies with no time to sell have book losses of more than 10 million yuan. Local large enterprises have tens of thousands of tons of cotton at high prices and have lost nearly 100 million yuan.

Affected by panic, some large cotton yarn companies in Shandong started selling cotton yarn at low prices. In mid-July, a large textile company in Dezhou, Shandong Province, lowered its level 4 lint to below 20,000 yuan per ton. The cotton price experienced five declines in half a month, and the Zheng cotton index was the biggest drop since December 2008.

According to Mr. Li, who is the head of a local cotton yarn company, in the area around Dezhou, Shandong, small businesses with an annual output of 50,000 tons or less are almost closed.

Mr. Li, a large cotton yarn company in Dezhou, Shandong, reluctantly stated that last year, raw materials in cotton rose all the way, and many textile companies in Jiangsu and Zhejiang set a threshold when they come to order. For example, 40 cotton yarns must be 15 tons before they are signed, 50 cotton yarns, and 10 tons of cotton yarn. This year, the cotton industry has experienced a substantial decline, and the willingness of textile companies to purchase has rapidly declined. "There are almost no orders for more than 5 tons."