Rising Raw Materials Affect Industrial Chain Terminals

On September 27th, the tide of cotton prices surging in China is now moving towards Quanzhou.

As the raw material of the textile industry, domestic cotton 95% is used for spinning, weaving, printing and dyeing, and then processing into garments. It has a long upstream and downstream industry chain.

Nowadays, the pressure of rising prices of raw materials is continuously pmitting to downstream industries such as weaving, printing and dyeing, clothing and so on.

Mr. Cai, the head of a Shishi textile enterprise, complained incessantly. He said, "the price of 32 cotton yarns was about 30000 yuan per ton a few days ago, and now it has risen by about 5000 yuan per ton.

International cotton prices are approaching the peak in 15 years, directly driving up the price of cloth, which puts the company in a semi shutdown state.

Mr. Cai said that some of the garment enterprises around him received many foreign orders at the beginning of the year.

"At that time, everyone was happy to see each other, and now they can't laugh.

The price of cotton has gone up, and the cost of workers' wages and water and electricity is also rising. Only a few points have been eaten away.

Now, some people are hard at work and bite their teeth at a loss making business.

He said, individual enterprises have been unable to sustain.

"Now the price of raw materials has gone up very much, and the cost of our clothing is also rising. This is a more difficult problem."

Li Tianfu, deputy general manager of Fujian marlett knitting garments Co., Ltd.

Cotton prices have hit record highs this year, driving the price of the entire garment industry up.

Affected by this wave of cotton price surges, cotton prices have risen by 15% - 20%, while export prices have not been significantly improved, and the profits of enterprises are gradually being "swallowed up".

Processing plants dare not take orders easily.

As a labor-intensive industry, garment manufacturers are greatly influenced by the rising labor costs.

The head of a Menswear brand said that the increase in overtime costs on weekends resulted in an obvious increase in expenses, and the wages of workers rose almost every year.

As the cost of raw materials such as cotton and cotton yarn has risen sharply, textile enterprises and garment processing industry as the downstream industry chain are increasingly feeling the pressure of rising costs.

The latest research report released by the China Cotton Association shows that the price of raw cotton material continues to rise, and the profits of downstream garment enterprises are reduced. Many weaving enterprises choose to stop working and leave, while clothing companies are more cautious when receiving orders.

Wang Yumiao, general manager of Jinjiang Dasheng Textile Industrial Co., Ltd., said that the cotton and other raw materials were a substantial increase in prices, and the price of raw materials increased, coupled with the increase of staff wages, the enterprises need to spend more on production costs.

He said: "in this way, the profit margins of enterprises have become smaller.

The price of raw materials of cotton textile industry is rising, and downstream enterprises need to make the most direct response.

At present, Quanzhou garment enterprises are still at the peak of the order meeting. The reporter has learned that the pressure of cotton price rise has been pmitted to the terminal of the industrial chain.

Some clothing enterprises interviewed by reporters said: "clothing garments are greatly affected by the rising prices of raw materials. It is definitely not possible to digest them by themselves, which needs to be shared by consumers and enterprises."

Enterprise analysis, at present, the price of 1 meter pure cotton cloth has increased by 3 yuan, a pair of trousers with 1.5 meters, plus labor costs and post-processing links, and so on, a pair of pants will cost 10 yuan more.

As for the price increase of the terminal retail market, Wang Yumiao believes that different brands have different grasp ranges.

"Different brands have different sales and positioning," he said.

Famous brand enterprises have large sales and high profits, which will not be greatly affected by the substantial increase in the price of the raw materials.

But for export enterprises, it has a great impact.

At present, there is no specific adjustment scope for their own enterprises, but they will gradually adjust to control about 20% of the increase.

At the same time, many clothing companies listed on the relevant financial results also show the trend of higher clothing retail prices.

For example, the semi annual report released by XTEP shows that the average selling price of clothing products has increased by 13.9%.

Anta reported that the price of clothing products increased by 7.1% (49.6 yuan).

Li Ning Co announced in June that the average retail price of footwear and clothing products increased by 7.8% and 17.9% respectively in the fourth quarter of this year.

Senior experts in the industry said that the overall price of clothing nationwide is now rising at 10%-20%.

Or expedited the "foundry army".

"The growth of costs will have a great impact on export enterprises, and will even force many enterprises to pform.

Those factories that rely on making foreign orders are relatively low in profits, and a substantial increase in raw material prices may force them to cooperate with domestic famous brand enterprises.

Cai Tianshou, chairman of Jinjiang Tianshou garment Weaving Co. Ltd. said, "the increase in retail prices is mainly related to distributors, especially the general agents of all provinces and cities.

In the face of rising prices of raw materials such as cotton, retailers from various channels should reduce the profit earned by intermediate links, and share the cost pressure together to tide over the difficulties.