In the years after China's entry into WTO, China's textile and garment industry developed at a high speed, and the demand for cotton consumption expanded sharply. The supply of cotton in China has formed a three-legged situation of imported cotton, Xinjiang cotton and mainland cotton. This also makes China cotton industry fully integrated into the global cotton industry chain and trade map, becoming the most important market in the world. So what will be the development trend of cotton industry in China in the next three to five years? What is the current situation of Chinese and foreign cotton merchants?
Industry development trend: shuffling is under way ...
Shuffle is inevitable: At present, the future trend of China cotton industry will be that the cotton processing and circulation industry will continue to shuffle, and several major cotton merchants will control most of the market.
At present, there are too many enterprises in the field of cotton processing and circulation in China. They are generally small in scale, weak in risk resistance and have no sustainable business model. A large number of repeated constructions lead to the surplus of cotton processing capacity and insufficient operating rate, which also leads to disorderly competition in the cotton purchasing market.
Under the impact of the mature and advanced business model of international cotton merchants, a large number of weak cotton processing enterprises in China will face elimination and integration, and individual cotton merchants who can survive will also become bigger and stronger rapidly with their successful experience. Finally, apart from Xinjiang cotton, the fragmented cotton market in the mainland will eventually evolve into a situation in which international cotton merchants and a few large domestic cotton merchants compete for hegemony.
The advantages of international cotton merchants are very obvious, and combined with the actual situation in China, it is difficult for China cotton merchants to compete with them.
Five advantages of international cotton merchants:
1, business scale and management advantages. The scale of foreign business is large, but there are few managers and low operating costs. After hundreds of years of business exploration, international cotton merchants have accumulated rich experience and formed a reasonable and scientific corporate governance structure.
2. Talent advantage. In China, international cotton merchants hire a large number of local cotton management elites with high salaries to realize localized management, while domestic cotton merchants are facing the dilemma of brain drain.
3. Strong financial strength. The business volume of millions of tons needs huge funds, which is difficult for domestic enterprises to reach.
4. Channel advantages. Before foreign investors enter the China market, they are buying and selling the world, and they can allocate global resources.
5. Use of hedging tools. This is the secret of the success of international cotton merchants in their survival and development, risk control and large-scale operation.
Three characteristics of cotton merchants in China;
1, market chaos, disorderly competition, overcapacity. According to relevant data, although there are less than 9,000 qualified processing and purchasing enterprises in China, it is said that the number of unqualified cotton circulation enterprises in various places is much higher than this figure, estimated at more than 1.8 million, and the processing capacity has reached 30 million tons. In recent years, China's cotton output is only 6-7 million tons, and the world's cotton output is only about 26 million tons.
2. Lack of funds, small scale and poor ability to resist risks. At present, more than 60% of the acquisition funds of cotton enterprises in China are cotton purchase and sale loans provided by the Agricultural Development Bank. China's cotton enterprises are generally small in scale, and their ability to resist risks is extremely poor.
3. The use of hedging tools is obviously insufficient. Most cotton-related enterprises do not use the futures market for spot operations to avoid risks, which is also an important reason why enterprises do not do much.
Downstream demand growth slows down: judging from the current development of textile and garment industry in China, the development of textile industry has turned for the better, the structure has been continuously upgraded, and the growth rate of cotton consumption will slow down.
At present, the development of China's textile industry has reached its peak, and the profit space is getting thinner and thinner, even to the edge of loss. The whole textile industry entered the cold winter and the growth rate began to slow down. China textile industry will accelerate the reshuffle and integration, and the growth rate of cotton consumption will also decrease.
In recent years, China's social spinning volume has been increasing at a rate of more than 10%, of which the social spinning volume in 2006 was17.22 million tons, up by 2 1.9% year-on-year. According to the author's latest calculation, China's spinning volume will also reach19.85 million tons in 2007, with a year-on-year increase of 15.3% and a decrease of 6.6%. Social spinning volume and cotton consumption slowdown will be the development trend in the next few years.
Coping strategy: talent and correct operation mode simultaneously
International cotton merchants have entered China and coveted the China market for a long time, and they know how to show their ambitions in the China market. If you are a member of China's cotton processing trade, do you smell the blood coming from afar, and do you realize that the crisis lurking around us is about to become a reality?
The author thinks that in order to avoid the recurrence of the tragedy of soybean industry in cotton industry, it is necessary to study the business strategy and operation methods of international cotton merchants and the possible changes in cotton prices, and take correct and effective measures to make enterprises survive in this international competition.
According to the possible management strategies of international cotton merchants in China cotton market, the author thinks that the coping strategies that China cotton enterprises can adopt are as follows:
1. Construct an operation mode of using futures market to avoid risks.
International cotton merchants attach great importance to the use of cotton futures market as a tool to avoid risks, which also provides a strong guarantee for its development and growth, and has formed a strict, almost rigid but effective spot portfolio futures operation mode. China cotton enterprises must also build such a business model to avoid risks and expand the scale of cotton business.
The futures market has the functions of price discovery and hedging. In the international cotton futures and spot market for nearly a hundred years, international cotton merchants use the futures market to avoid risks and combine future and present business strategies to make enterprises bigger and stronger. In 2004, China cotton futures was listed on Zhengzhou Commodity Exchange, which marked the perfection and maturity of the cotton market system, built a bridge between the spot market and the capital market, and provided a platform and environment for the large-scale operation of China's cotton-related enterprises through the combination of futures, spot and hedging.
At present, there are few cotton enterprises that use this platform on a large scale in China. However, international cotton merchants boldly tested the China cotton futures market and successfully copied it to China with reference to its operation mode in the international market, and achieved remarkable results. Therefore, when cotton-related enterprises become bigger and stronger, they will learn to use the futures market flexibly, which is also a major trend in the development of cotton enterprises in China in the future.
Take Louis Dreyfus, an international food and cotton trading giant, as an example. In 2005/2006, in the first year of testing water in China, Louis Dreyfus, like most domestic cotton enterprises, experienced the embarrassment of "buying high and selling low". Average cotton purchase price 14500 yuan/ton, and average cotton sales price 13800 yuan/ton. However, relying on skilled and accurate hedging operation, Louis Dreyfus got rid of the loss situation of China cotton enterprises and realized profit. This year, their business volume did not exceed 654.38+10,000 tons.
In 2006/2007, Louis Dreyfus also made brilliant achievements in the acquisition of new cotton. According to the author's observation, Louis Dreyfus bought a large amount of tertiary cotton at the price of 1.27 million yuan/ton, about 20,000 tons. At this time, Zhengzhou futures price is on the high side, and it is short in the futures market to lock in the huge spread profit. Since then, spot prices have been rising steadily, while futures have fallen sharply since February 2007 due to heavy selling pressure, until the basis between them gradually narrowed. Louis Dreyfus not only made a spot profit, but also won a great victory in futures, and the overall profit was very objective.
The cotton warehouse receipt registered by Zhengzhou Commodity Exchange is about 6.5438+0.5 million tons every year, which creates a large number of stable cash arbitrage opportunities for many cotton processing and circulation enterprises. At the same time, a large number of operational risks and price fluctuation risks have been transferred to the spot market.
2. Broaden the channels of cotton purchase loans and realize the diversification of cotton capital sources.
Cotton purchasing funds have always been the weakness of China's cotton enterprises. It is very dangerous for enterprises to operate only by cotton loans issued by the Agricultural Development Bank. Because around June every year, the Agricultural Development Bank will force cotton enterprises to sell their stocks to return the cotton loans issued by the Agricultural Development Bank, which is very likely to be sold at a relatively low price in that year, and the business risks of cotton enterprises will expand. Therefore, it is necessary to obtain more cotton loans through various financing channels, which also replaces some loans from the Agricultural Development Bank and enriches the diversification of cotton purchase funds.
3. Increase the training and introduction of outstanding international cotton management talents.
Cotton management talents are the core issue of market competition. Without excellent cotton management talents, cotton enterprises cannot survive in the fierce competition. Due to the high salary of international cotton merchants, China cotton enterprises began to lose a large number of experienced and excellent management talents. Therefore, cotton enterprises should improve the salary and welfare of outstanding cotton management talents and train and reserve a large number of cotton management talents in time to maintain sustainable development.
4. Learn to use external cotton research strength and research results.
Research on cotton market trend is the soul of the development of cotton enterprises. Enterprises should not only train cotton market researchers themselves, but also learn from external cotton research forces and research results to serve the development of enterprises. This is the so-called cotton market consulting service, which often conducts market research and adjusts the ideas and strategies of cotton management in time.
5, in order to improve the ability to resist risks and core competitiveness, the implementation of industrial management.
Because cotton processing, circulation and even cotton consumption enterprises are facing great competitive pressure, the profit space of the industry is getting thinner and thinner, but the risk is getting bigger and bigger. To be bigger and stronger, it is necessary to improve the profitability, competitiveness and risk resistance of enterprises, and cotton industrialization has become the first choice and future development trend.
Cotton industrialization management strategies are mainly divided into three types, namely, extending from the upstream to the downstream of the industrial chain, extending from the middle to both ends and extending from the downstream to the upstream.
The development of cotton industry in Tongzhou, Henan Province is a typical case of cotton industrialization management with "cotton processing-trade circulation-textile" extending from upstream to downstream.
Shandong Ruyi Group and Black Peony (Group) Co., Ltd. are typical cases that extend the cotton industrialization management idea of "clothing-textile-cotton trade-cotton processing" from downstream to upstream in order to obtain stable raw material procurement channels and sources.
Of course, the future development trend of China cotton industry is not only the above aspects. It is believed that with the development of cotton industry in China, more industrial development trends will be formed.
In short, the state should give more support and encouragement policies to the domestic cotton industry, study and establish a unified, accurate and authoritative statistical system of cotton data, and use scientific statistical methods and means to find out the production and sales data of cotton in China. Only in this way can we improve the decision-making level and regulation effect of the country on the cotton industry. Otherwise, the regulation of China's cotton industry cannot get rid of the data puzzle, and the international market will continue to impact China's domestic cotton supply and demand market, affecting the price trend, and the domestic cotton industry will not be protected.