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Cotton Prices Jumped More Than 25%&Nbsp In August, Fukuda Still Optimistic About The Textile Industry Prospects.

2010/10/4 9:40:00 47

In the past month

cotton

Prices continue to rise. Last month the 30 day has risen to 22684 yuan per ton (RMB. The same below), and has jumped more than 25% since August. In order to ease the tension between supply and demand, the mainland government recently auctioned 300 thousand to 400 thousand tons of cotton reserves.

The rise in cotton prices will undoubtedly increase the cost pressure of the textile industry. Yan Zhenming, executive director of Futian industries (0420), admitted that in the face of sudden rising raw materials, the company only needs to raise the cost structure and offset the cost pressure.

Increase in cost and cost increase

Futian mainly produces knitted fabrics, raw materials are

Cotton yarn

As cotton prices rose, Jiangsu's cotton yarn rose 3% to 28400 yuan per ton last month. Yan Zhenming said cotton yarn was 10% per liter, and the company would increase its price by 5 to 6%.

"Cotton stocks are low throughout the world, and cotton prices continue to rise due to insufficient supply.

He predicts cotton prices will not drop in the short term, because the market demand for cotton is still large.

In addition to rising cotton prices, Fukuda will also face the pressure of RMB appreciation.

Present

For the domestic market

It accounts for only about 10% of the turnover of the company, and the appreciation of the renminbi has brought pressure on the export market to Europe and the United States.

Yan Zhenming believes that the appreciation of the renminbi is a common problem facing the industry. It will reduce expenditure by changing the cost structure, such as integrating processes to improve efficiency and energy efficiency.

Strong demand for fabrics, customers accept price increases

Fukuda has 3 cloth factories in the mainland, two in Jiangsu, one in Dongguan, employing over 8900 workers, and rising wages are also troubling the company.

Facing all kinds of cost risks, Yan Zhenming said that the outlook for textile industry this year is still optimistic because the demand for cloth is strong, even if the company increases the price, customers will still accept it.

On the export side, the debt crisis in Europe is more risky, but the US market is relatively stable. It is still China's largest exporter. With the Fukuda customer base scattered, the demand for sportswear or high-end leisure wear is still very large.

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As for domestic sales, the group will focus on two aspects of cloth making and garment making, without considering its own brand, and will actively expand its domestic market.

Fukuda nearly 90% of its turnover comes from the manufacture and sale of colored cloth, and only 10.8% of its turnover comes from ready-made garments. Yan Zhen Ming acknowledges that the garment market is dispersed and the competition is more intense. But in the future, it will study and improve the garment sales and will not abandon the garment market.

In addition, Fukuda's Yancheng plant in Jiangsu has been put into operation at the beginning of this year. This year, the production capacity can reach 3 million pounds per month, which has invested 400 million yuan in capital expenditure. It is strictly stated that there are no other plant plans in the short term. As the factory building in the city still has room for development, it is expected to produce up to 10 million pounds of dyed cloth per month.