By Wang Ting

The unstable fluctuant cotton price would still be the top hot issue for the whole cotton industry. 

Because of the cotton price, along with the adjustment of currency and industrial macro policies in China, most cotton enterprises were not so sure about their business operation: some of them hesitate to give up the long-term cooperation with customers, some of the exported cotton enterprises gradually transferred their commercial orders to the southeast Asian markets, some small and medium sized cotton companies even stopped their daily production, or some large-scaled enterprises also saw a downturn operating rate. Recently, the textile and apparel industry still show a comparatively weaker market demand of cotton.       

Whereas, in the first half year of 2011, the cotton industry in China still preserved a stable and steady development.

In General

In the first five months of 2011, according to the National Bureau of Statistics, there are 8725 above-designated sized (the above-designates sized enterprises mainly are the companies with the annual sales of or above 20 million yuan) cotton textile enterprises in China. Of the 8725 cotton enterprises, 9.25% suffered a financial loss in the first half year.

From January to May, the industrial output of the cotton enterprises in China reached 584.57 billion yuan, increasing by 34.9% comparing with the same period of time in 2010. And the export delivery value, main business income, as well as the total profit realized 44.78 billion yuan, 570.90 billion yuan, and 29.89 billion yuan, with a rise of 22.7%, 34.8%, and 49.7% year-on-year, respectively.

Moreover, in the first five months, the profit ratio of the cotton industry was 5.26%, witnessed a slightly downtrend comparing with that in the first quarter. Of them, the average profit ratio in April and May was only 4.90%. As referring to the sales rate, from January to May, the rate reached 98.11%, and the average sales rate in April and May decreased to 97.90%, hitting the lowest historical level since the end of 2009.

According to the statistics, the fixed assets investment of the cotton and MMF processing industry realized 75.41 billion yuan, increasing by 46.19% year-on-year, and taking a proportion of 46.3% of the total investment.

Cotton Yarn

According to National Bureau of Statistics, in the first half year, for the 3909 above-designated sized yarn spinning enterprises, the yarn output reached 13.413 million tons, increasing by 11.14% comparing with the same period of time in 2010. While, the fabrics realized an output of 28.34 billion meters, with a rise of 15.36% year-on-year.

As for June, the yarn and fabrics realized an output of 2.608 million tons, and 5.56 billion meters, respectively, representing a month-on-month increase of 8%.

Moreover, from Sheet1, the statistics indicated that yarn enterprises in the middle and western part of China gradually occupy more proportion of the total output, and the fabrics output also saw a markedly uptrend in the first half year against 2010.

Sheet 1 Yarn and Fabrics Output (1-6, 2011)

(Source: National Bureau of Statistics)

Import and export

According to the customs, the import and export of cotton textile and apparel products in the first half year slowed down its growth speed slightly: from January to May, the export arrived at 34.171 billion USD, increasing by 23.72% comparing with the same period of time in 2010; and the trade surplus reached 31.181 billion USD, rising by 24.21% year-on-year.

Due to the soaring cost of raw material and the RMB appreciation, the export price has been lifted to a higher level, leading to an enlarged trade surplus. Of them, the cotton textiles products totalized 11.003 billion USD in export, with a rise of 30.15%, and the export of cotton apparel products reached 23.168 billion USD, rising by 20.88% year-on-year.

As referring to import, in the first five months, the import achieved 2.990 billion USD, with a rise of 19.01%. Of them, the cotton textile and apparel products realized an import of 2.436 billion USD and 0.553 billion USD, increasing by 13.48% and 54.5% year-on-year respectively.

In terms of different categories, from Jan. to May, the import of cotton wool reached 1.205 million tons, down by 11.75% comparing with the same period time of 2010. As for the statistics in May, the import decreased by 31.30% month-on-month. Till the end of May, during the 2010/2011 cotton year, the import of cotton wool totalized 2.09 million tons; and the export and import of MMF staple fiber was 0.5268 million tons and 0.1990 million tons, increasing by 87.31% and 4.77% year-on-year respectively.

As for cotton yarn, in the first five months, the unsteadily changing cotton price resulted in a weak demand in both the domestic and overseas markets: the import totalized 0.3575 million tons, decreasing by 25.49% year-on-year; and the export reached 0.2086 million tons, down by 13.01% year-on-year.   

However, in the first half year, the export of MMF staple fiber represented a strong upturn significantly: the import reached 46,900 tons, descending by 6.41% year-on-year; while, the export realized 268,600 tons, witnessing a rise of 21.61% year-on-year.

As for the cotton weaving products, from January to May, the export reached 5.460 billion meters, seeing a slight increase of 1.3%; whereas, the export in May decreased by 7.13% month-on-month. The export of MMF staple weaving products was 2.540 billion meter, with a rise of 1% year-on-year. However, the export price of the cotton weaving and MMF staple weaving products still preserve a soaring uptrend, the year-on-year growth speed of which reached 43% and 35% respectively.