It is an indisputable fact that the current domestic cotton price is higher than the foreign cotton price. High cotton prices mean high costs, which will weaken the competitiveness of domestic yarn products and increase the competitiveness of imported yarns. In addition, there are no quota restrictions on imported yarns, resulting in the high number of imported yarns in recent years. This is bound to cause great difficulties to domestic spinning enterprises.
For textile companies, what is the price difference between domestic and foreign cotton prices that they can accept? In fact, there is no unified standard for the cotton price difference. Due to the different varieties of cotton yarn produced by textile companies, the cotton quality and usage ratio will also be different.
A company that produces high-end cotton yarn products said that taking combed 40s as an example, the factory price of Xinjiang cotton grade 2128 is about 16,000 yuan/ton. The current price of combed 40s in the domestic market is 30,500 yuan/ton. Every ton of combed cotton yarn produced Approximately 1.4 tons of lint are needed, so 16,000 yuan/ton multiplied by 1.4 equals 22,400 yuan/ton. In addition, labor, water and electricity costs are about 11,000 yuan/ton, and the comprehensive cost per ton of combed cotton yarn is about 33,400 yuan. Among them, combed noil can be sold for 11,000-12,000 yuan/ton, and each ton of combed yarn produces 0.15 tons of combed noil. In other words, the total cost per ton of combed 40s cotton yarn is approximately 32,000 yuan/ton. If the selling price is lower than 32,000 yuan/ton, textile companies will suffer losses. According to current market prices, for every ton of cotton sold, textile companies will lose 1,500-2,000 yuan, and this is the company’s break-even point.
The person in charge of the cotton spinning company further stated that the price difference between domestic and foreign cotton that the company can accept is 1,500 yuan/ton. If this price difference is exceeded, the advantage of imported yarn will be obvious, which will inevitably have a serious impact on domestic textile companies. On December 8, the international cotton price index (M) released by China Cotton Network was 78.81 cents/pound, which is equivalent to the price of grade 3128 lint cotton at 13,800 yuan/ton (including 1% tariff). During the same period, domestic Xinjiang cotton of the same grade was quoted at more than 15,800 yuan/ton, with a difference of more than 2,000 yuan/ton, far exceeding the critical price of 1,500 yuan/ton. It can be seen that textile companies are not satisfied with the current market cotton price, and the stalemate between buyers and sellers of lint cotton will continue.
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