The Rise And Thinking Of Xinjiang Cotton

The Rise and Thinking of Xinjiang Cotton

I have worked in the cotton industry for more than 20 years and have never left the cotton industry. I have personally experienced several rounds of ups and downs in the cotton market and industry reshuffles. Following the historical changes of the cotton industry in Xinjiang, I may be able to get some useful inspiration for the healthy development of the industry.

In the early 1990s, cotton growers in Xinjiang were very hard-working. At that time, the degree of agricultural mechanization was low. Due to the limitation of labor, a family could not grow a few mu of cotton, and the yield per unit of cotton was also low. The cotton processing plants of the hemp companies are the main ones. During the purchasing season, there will be a queue of cotton sales that can’t be seen at the gate of the cotton processing factory. It is not easy for farmers to complete the sale on the same day. The cotton buyer is relatively in an advantageous position, and the production efficiency is very considerable. There is also the problem of "difficulty in selling cotton" for cotton farmers.

In the late 1990s, the cotton market was gradually liberalized, and private cotton enterprises represented by Zhejiang merchants sprang up in the vast land of Xinjiang, injecting vigor and vitality into the development of the Xinjiang cotton market. They have a keen market sense and are honest and trustworthy. , flexible business model, adventurous spirit, rapid development and expansion, in one fell swoop established the historical position of Zhejiang private enterprises in Xinjiang cotton industry.

In the historical process of cotton development, there are two years that are still fresh in our memory. In 2003, the seed cotton was harvested, and the spot price of lint rose rapidly. The highest price was about 19,000 yuan/ton. Hoarding, the mainland textile enterprises complained. Subsequently, the state increased the issuance of imported cotton quotas, and then the spot price fell sharply, which eventually led to heavy losses for some large cotton companies that stockpiled a lot of goods. The other year was 2010. In the same rush to harvest, the price of lint once soared to a historically high price of more than 33,000 yuan / ton, and then quickly turned downward. Cotton companies and downstream textile companies that did not sell in time suffered disasters. The industry once again experienced Big shuffle. Subsequently, the country launched the largest continuous purchase and storage policy to support the market, which stabilized the situation and achieved a soft landing of prices. After that, the industry enterprises were able to recuperate, but the large inventory also made the market enter a long destocking cycle, and the cotton price remained sluggish for a long time.

In recent years, the implementation of the target price direct subsidy policy has most effectively ensured the stability of the cotton planting area in Xinjiang, and the cotton output in Xinjiang has been maintained at around 5 million tons for a long time. Around 2015, with the improvement of agricultural mechanization, the large-scale promotion of the machine-harvesting model, the labor force was greatly liberated, the land was gradually integrated and concentrated to the professional large households who knew planting, the advantages of large-scale planting gradually emerged, and the cotton yield and total output were further improved. promote. At the same time, the number of cotton enterprises in Xinjiang continued to increase. According to incomplete statistics, from 2018 to 2020, there were more than 100 newly-built cotton processing production lines in Xinjiang, of which the increase in northern Xinjiang was relatively large. In order to adapt to the characteristics of the concentration of machine-picked cotton on the market, the production capacity of these newly-built production equipment has been greatly improved. , the demand for raw materials is also very strong.

In the first half of 2021, the domestic new crown epidemic was well controlled, a large number of textile orders returned, and Xinjiang encountered extreme weather during cotton planting. The market's expectation of a decline in cotton production was superimposed on the world's major economies with over-issued currencies and high inflation. The above factors are common. The role of the two years of cotton robbing war to a climax, the price of cotton purchase cost is generally as high as 23,000-24,000 yuan / ton. Relevant state departments have issued risk warnings and put cotton reserves on many occasions, but at this time, cotton companies have fallen into involution and cannot extricate themselves. Even if the purchase cost and the spot price are inverted by 2,000 yuan, they cannot stop the enthusiasm for panic buying.

It may be difficult for many people to understand this choice of cotton companies. I have had the same experience. It takes more than half a year to prepare various preparations (funds, personnel and various trainings, facilities and equipment maintenance, etc.), to the acquisition of gold I dare not participate in the season, but I see other companies doing it in full swing. The time to market for machine-picked cotton is very concentrated, and the period of hesitation left for you is fleeting. The feeling of depression and anxiety as a business manager cannot be truly understood by others. There is still a chance to participate in the rush to bet on the market outlook. It is better to do something wrong and not miss it. It is a helpless choice for most companies. In the "prisoner's dilemma", the rationality of the individual sometimes leads to the irrationality of the collective. At present, cotton sales in Xinjiang are difficult, and enterprises generally suffer losses.

In the course of many visits and investigations, we have seen that some textile enterprises have in-depth cooperation with cotton processing enterprises in order to stabilize the supply of raw materials, and even established stable raw material production bases by integrating land, further extending the industrial chain. Through unified and coordinated management, the quality consistency and stability of cotton raw materials from the source of planting to production have been improved, and the ability to digest the risk of price fluctuations has been strengthened through the introduction of talents and the use of various tools.

Through these historical events, every time the industry as a whole is in a dilemma, on the one hand, it needs the precise guidance and support of national policies, and at the same time, it also requires the entire industry to think carefully, summarize them, and extract good strategies that are beneficial to the future development of cotton.