Cotton price crisis forced Henan textile enterprises to close down
In 2009, the purchase price of seed cotton in Shangqiu was approximately 4.6 yuan per kilogram, but this year it has surged to around 11 yuan per kilogram. Similarly, the price of lint cotton went from about 15,000 yuan per ton last year to 25,000 yuan per ton this year. These figures clearly show that cotton prices in the city have more than doubled compared to last year, reaching a record high. According to an official from Mulan Textile Company in the city, the price of lint cotton at the end of last year was below 20,000 yuan per ton, and now it has climbed to 30,000 yuan per ton.
Media reports indicate that on September 27, the cotton futures contract on the Zhengzhou Commodity Exchange hit a new all-time high. The CF105 contract closed at 21,635 yuan per ton, rising by 380 yuan. By November 8, the CF105 contract reached a peak of 33,295 yuan per ton, closing at 32,970 yuan per ton—an increase of 1,950 yuan. According to statistics, the price of cotton had risen by as much as 106% from 16,000 yuan per ton at the start of the year to 33,000 yuan per ton on that day.
The spot market also reflects the same trend. On November 8, China’s cotton price index increased by 733 yuan, reaching 28,891 yuan per ton. At the beginning of the year, the index stood at 15,000 yuan per ton, representing an increase of over 90%.
Zhumadian Kangmao Arts & Crafts Co., Ltd., an export-oriented private enterprise, primarily produces cotton cloth, non-woven shopping bags, and composite fabrics for markets in Western Europe, Japan, and the United States. According to Director Chen of the company, cotton cloth accounts for 30% of their total product output. However, due to the sharp rise in domestic cotton prices, the company's production has been severely impacted. Recently, they have stopped accepting orders for cotton-based products and are only maintaining limited production of non-woven fabrics and composite materials.
Despite joint measures issued by seven ministries and commissions, the impact remains unclear and not very promising. For foreign trade companies, the current situation is challenging, even more so than last year. Most orders in the industry have shifted to countries like Vietnam and Pakistan, where labor costs are lower and raw material prices are more stable, making them more competitive in the global market.
Zhengzhou Clothing Company, known for its brand of pants, reports that there are over 500 large-scale clothing enterprises in Zhengzhou City. Many of these companies are hesitant to take on overseas orders, as contracts are signed based on current prices, but actual production costs have risen significantly, squeezing profit margins.
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