Although the effect of the pilot cotton price reform reform policy has been significant, the cotton industry is still struggling to get rid of high planting costs, overcapacity, and insufficient quality cotton.
According to a national white paper on the quality of imported cotton issued by the State Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), the national grade, length, and strength of imported cotton have risen compared to the same period last year. Even so, in 2015, with domestic stocks continuing to be high, China’s cotton imports still amounted to 1.76 million tons.
According to statistics released by the National Bureau of Statistics, in 2015, the country's cotton planting area was 56.98 million mu, which was 10% less than in 2014; the total output was 5.605 million tons, which was 9.3% less than the same period of last year. In spite of the reduction in production, the stock of reserve cotton reached the highest level in history. Inventories of reserve cotton in 2015 exceeded 11 million tons, accounting for almost half of global inventory.
As the largest cotton producer in the world, China’s cotton production accounts for nearly one-third of the world's cotton production. So why should we import it from abroad?
Insiders pointed out that imported cotton has a certain price advantage, which is the main reason for the continued high import of cotton in China and the substantial increase in domestic cotton stocks in recent years.
Cotton "soft ribs"
It is worth mentioning that during the period of 2011-2013, China implemented the policy of temporary purchasing and storage of cotton for three consecutive years, which has given the cotton market a certain degree of stability. However, its drawbacks have caused the farmers to weigh only on output and not quality, and their prices have also deviated from the market.
For this reason, the decision-makers canceled the temporary cotton purchase and storage system that has been in effect for three years in 2014. Instead, the policy is to let the cotton prices return to the market on a rational basis at a target price (this policy is only piloted in Xinjiang).
According to Zeng Haiwei, director of operations and director of the research center of the China Enterprise Business School, the cotton price has begun to integrate with the market, the market environment has been significantly improved, market-oriented mechanisms are gradually being formed, and the cotton industry chain has entered a new The stage of development.
The reporter learned that under the influence of policies, since the beginning of the 2014 purchase season, the purchase price of seed cotton has decreased significantly compared with previous years. The purchase price is returning rationally. The implementation of the target price policy realizes the “price separation and separation†of market regulation and gives full play to the decisive role of the market mechanism in price formation and resource allocation.
Even so, compared with imported cotton prices, China's cotton prices still do not have a price advantage. According to statistics, after the cotton temporary storage was cancelled, the lint price fell from 13,000 to 16,000 yuan per tonne in 2013 to around 12,000 yuan, but it is still almost 1,000 yuan more than the foreign cotton price per ton.
In an interview with reporters, Zeng Haiwei introduced that the high price of cotton in China has a direct relationship with the high cost of planting cotton in China. China's cotton production mode is dominated by small-scale farmers, with high production costs and low production efficiency, which leads to the price of cotton in our country higher than that of imported cotton.
According to the survey conducted by the National Cotton Market Monitoring System, the total cost of planting cotton in the Mainland was 1,125 yuan per mu in 2015, and the total cost of hand picking cotton planted in Xinjiang reached 2,185 yuan per mu.
It is worth mentioning that most of China's cotton is harvested by hand, and its mechanization is relatively small, which has, to some extent, pushed up the final price of cotton.
With high stocks and falling prices, on the one hand, cotton farmers are facing difficulties in selling cotton. On the other hand, downstream textile enterprises are faced with the problem of “no rice potsâ€, lack of quality cotton, and poor quality cotton accumulation. The production needs are not cotton in China. The true portrayal of the industry.
In particular, high-quality cotton can not meet the market's needs, and it has always been a “heart disease†for downstream textile companies.
In an interview with reporters, Li Xiaokai, a research fellow at China Institute of Technology, said that domestic textile companies have started their transformation and their market positioning has gradually shifted from the low-end market to the high-end market. Therefore, the demand for high-quality cotton by textile companies has been increasing in recent years. However, the quality of cotton in our country is relatively insufficient compared with that of Australian cotton and that of the United States. Therefore, the contradiction between supply and demand for high-quality cotton in China is highlighted.
The brand is the starting point for industrial upgrading
This year is the third year of the implementation of China's cotton target price reform pilot. The implementation of the cotton target price subsidy policy has guided the scientific cultivation, has played a positive role in optimizing the industrial structure and accelerating industrial upgrading, and has also significantly improved the quality of cottonseed.
To sum up, it is enough to show that the cotton target price reform was piloted in Xinjiang for two years, and its pilot reform has achieved preliminary results.
Li Xiaolu believes that the development of China's cotton industry needs to focus on improving the quality of cotton, increase the limited supply of the market, and meet and gradually expand the demand for high-end markets. In this process, effective policy guidance will play a crucial role.
"Utilizing the timing of market downturn, optimize the rational distribution of cotton production capacity, gradually improve the overcapacity situation in the processing and circulation industry, eliminate backward production capacity, adjust the industrial structure, and force high-end cotton products," said Zeng Haiwei.
Observers in the industry believe that adjusting the industrial structure and developing middle-end and high-end cotton products need to promote the promotion of domestic cotton brands. Brand upgrading is an important task for industrial transformation and upgrading.
What is gratifying is that in the past two years, as China's top management attaches great importance to improving the quality of cotton, Xinjiang, the main producing area of ​​cotton, has improved in terms of seed selection, cultivation patterns, cotton processing, and transportation. In recent years, the internal quality of domestic cotton has been improved overall. . The high-quality cotton resources produced in Xinjiang and other regions have also become the target of choice for some cotton spinning enterprises that produce high-end products.
The change from quantity to quality is the direction "The key to the future development trend of China's cotton industry is to change from heavy quantity to heavy quality." Li Xiaoxi said.
In the interview, the reporter also learned that in the future, the scale of cotton production in China will be reduced and the regional layout will be more concentrated. The output of Xinjiang's cotton region will surely increase further, and the cotton planting area in the Yellow River valley and the Yangtze River valley will shrink.
According to reports from relevant media, cotton grown by farmers in some areas is not subject to collection and sorting, and contains a lot of impurities. The overall quality is poor. The price per ton is still 1,500 yuan higher than imported cotton. Therefore, this situation needs improvement.
“Quality emphasizes brand building, and brand building is mainly focused on the construction of regional brands and the brand of cotton processing companies, which will play a demonstration role in driving China’s cotton consumption.†Li Xiaoyun said that the success of the cotton industry transformation can not only promote cotton The sustained and healthy development of the industry will also have a very big impact on textile companies. It will increase the added value of textile products and help sustainable development of textile enterprises.
Zeng Haiwei anticipates that the structure of the cotton industry needs to be further adjusted and the quality of the cotton products must be made to the middle and high end. In addition, the scale of cotton imports has declined, and the import pattern has been divided. In the future, China's cotton prices will gradually move closer to international market prices. (China Sankei Shimbun)
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