Cotton prices slump Slow sales of cotton yarn

In recent days, the spot price of cotton in the Texas region of Shandong Province has continued to fall. Cotton farmers have been reluctant to sell cotton at low prices. The purchase and sale prices of cotton enterprises have been unwilling to close. The local seed cotton buying and selling market has been deserted and has basically remained in a stagnant state.

The decline in cotton prices has caused a certain impact on the downstream market. Weaving and apparel customers are not willing to purchase, resulting in the obstruction of sales of cotton yarns and the continued decline in yarn prices. Recently, the mainstream transaction price of local C32S cotton yarn was around RMB 27,300/ton, which was reduced by RMB 700/ton from the average of half a month ago. At present, cotton yarn sales in Texas remain weak, with an average operating rate of only about 70%. The main reasons for the sluggish textile enterprises are: First, the economic recession in Europe and the United States and the demand reduction. Second, due to the rise in domestic labor costs and raw material costs, the cost of cotton textiles has increased, and international competitiveness has declined. Foreign trade orders have shifted to some countries in Southeast Asia. Third, tight bank credit, resulting in financing difficulties for the small and medium-sized textile companies that rely mainly on private financing, and increased interest costs.