Domestic cotton products usher in rising prices

In 2012, China’s textile imports totaled 19.94 billion U.S. dollars, accounting for 81.5% of total imports. Imports of textiles maintained an overall growth of 4.8%, but only yarns increased by 22.6%, while fabrics and finished goods decreased by 4.8% and 2.2% respectively. It is understood that the yarn import growth is mainly driven by bulk commodity cotton yarn. In 2012, the cumulative import volume reached 1.528 million tons, an increase of nearly 70%, while imports of chemical fiber yarns decreased by 12.7%. Only the imports of cotton fabrics achieved a slight increase in fabrics, while imports of other raw material fabrics all decreased.

It is not difficult to see from the above data that the demand for cotton yarns and cotton fabrics in the domestic market is very strong. Industry analysts believe that this phenomenon is closely related to the huge cotton price gap at home and abroad.

The person in charge of the China Textile Industry Federation told the reporter that at the end of 2012, domestic cotton prices were about 45% higher than the international market. Wang Tiankai, president of the China Textile Industry Federation, said that the current domestic cotton price spread is as high as 6,000 yuan/ton. At present, the processing volume of China's textile fibers is 43 million tons/year, of which cotton accounts for less and less, only 25%. With the acceleration of the process of industrialization and urbanization, the consumption level of the people has increased, and their consumption of textiles has also gradually increased. At present, due to domestic management policies and other factors, the domestic cotton price has been significantly higher than foreign countries. In order to consider the cost, competition and other pressures, companies are trying to use chemical fiber instead of cotton as a raw material for textiles.

Wang Tiankai predicted that the price of cotton products in the future market will become higher and higher.

This speculation is not groundless. According to the “Statistical Communique on National Economic and Social Development of 2012” recently released by the National Bureau of Statistics, in 2012 China's cotton planting area was 4.7 million hectares, a decrease of 340,000 hectares compared to the same period of last year. The reduction in cotton planting area is expected to further deteriorate in 2013. Earlier reports said that in 2013, the cotton planting area in Shandong, Anhui, and Jiangsu is expected to decrease by about 10%. According to analysis data released by the National Development and Reform Commission on the economic situation of the cotton and textile industries, in January this year, China's market price of cotton rose steadily. The average purchase price of seed cotton in China was RMB 4.2/kg, up by RMB 0.01/kg or 0.04% from the previous month.

In the interview, some cotton spinning companies stated that due to the high domestic cotton price, quotas for imported cotton were difficult to obtain. Due to factors such as cost, the company has been developing products using chemical fiber raw materials since 2012. The momentum will be further extended in 2013. In other words, the proportion of cotton used may be further reduced. According to industry data, in 2012, the amount of chemical fiber used in the cotton spinning industry reached 11.7 million tons, while the amount of raw cotton used in the year was only 9 million tons, and the amount of chemical fiber used exceeded 2.7 million tons of cotton.