The rise in cotton prices will have a great impact on the textile industry. First of all, due to the high proportion of cotton in textile raw materials, the change of cotton price will affect the production cost and compress the profit space of enterprises. Secondly, the change of cotton price directly affects the supply and demand of cotton, and then affects the market supply and demand of textiles. If the price of cotton rises sharply, manufacturers can't bear the cost pressure, which may reduce the purchase of cotton, lead to tight market supply, and then lead to the increase of textile prices. Therefore, enterprises need to deal with the risk of rising cotton prices in time and formulate corresponding countermeasures to ensure the stable development of the textile industry.
Under normal circumstances, enterprises should be fully prepared for the rise of cotton prices when formulating purchasing strategies. Enterprises can reduce inventory and control production costs by reasonably planning funds, so as to better cope with emergencies. In addition, enterprises can avoid risks through reasonable price risk management strategies. Price risk management usually includes futures trading, option trading and price locking trading. Enterprises can choose a way suitable for their own situation to reduce the impact of cotton price fluctuation on their production and sales. In short, in view of the market phenomenon of rising cotton prices, enterprises should ensure the stable development of their own production and operation through effective management and various coping strategies.