Industry Information: Transcript Of Round Table Dialogue Of 2020 China Cotton Industry Summit Forum

Recently, the "2020 China Cotton Industry Summit Forum" sponsored by China Cotton Association was held in Hefei, Anhui Province. A round table dialogue was held on the topic of "innovative development of cotton industry under the new pattern". Four guests invited for the dialogue Li Fuguang, director of Cotton Research Institute of Chinese Academy of Agricultural Sciences, Wei gangmin, chairman of Henan TongZhou Cotton Industry Co., Ltd., Ni Junlong, chairman of Anhui Huamao Group Co., Ltd., and Yang Xiaodong, full-time vice president of China Garment Association, were from the upstream and downstream of cotton production, circulation, textile, clothing and other industrial chains. They discussed the current situation from their respective perspectives How to highlight the tight encirclement of cotton industry and realize long-term, sustained and high-level development through innovation in products, technology, system and concept.

Solve the problem of variety disorder and improve cotton quality

Li Fuguang, director of Cotton Research Institute, Chinese Academy of Agricultural Sciences: a few years ago, I heard many textile enterprises say that China's cotton is not good. If you want to produce high-quality yarn or high-end cloth, you must use imported cotton. How to plant and produce good cotton is an important topic for Chinese cotton practitioners. I'm concerned about why China can't produce good cotton. Compared with Australian cotton, I found that variety is a major factor, and it is very important to solve the problem of many, disorderly and miscellaneous cotton varieties in Xinjiang. Australia's high-quality cotton is dominated by a single dominant variety, while Xinjiang has more than 300 cotton varieties. Last September, I proposed in Xinjiang that we should plant one variety every 50000-100000 Mu to solve the problem of one variety. From the perspective of the feedback of the northern Xinjiang, we can see the effect of the information in the south. The Cotton Research Institute participated in the poverty alleviation work of the 35th regiment of Xinjiang production and Construction Corps. This year is the third year, and the planting has fully met the Australian cotton standard. In accordance with the planting mode we advocate, a cotton ginning plant will eventually acquire a variety, and Xinjiang cotton can completely replace Australian cotton. I hope you can join hands to make China's cotton well.

Extending the industrial chain with trade as the center

Wei gangmin, chairman of Henan TongZhou Cotton Industry Co., Ltd.: the core of cotton trade is price change. I entered the cotton industry in 1984, and experienced the changes of cotton pricing methods in different stages. Before 1998, it was policy pricing. After 1998, cotton pricing was a dual track system of market and policy. Later, it became a semi futures trading pricing method. After the listing of cotton futures in 2004, the basic pricing method was futures pricing.

The core of trade is a process of rectifying deviation. To realize the price balance of the whole industrial chain, how to trade has become the core of profit in trade. After 1998, cotton was completely priced in the spot market combined with policy, and cotton traders had to rely on the spot market analysis and judgment. In recent three years, it has become the main body of basis trade. Its advantages are low risk and relatively stable income. Especially when the capital market is highly developed, this basis trade has become the main trading mode and mode of domestic cotton trade.

About five years ago, the cotton industry was involved in cotton production and textile industry in Xinjiang. In terms of cotton planting, we have carried out effective cooperation with the China Cotton Institute. Tongzhou cotton industry wants to achieve the overall balance of the industrial chain by trying to innovate cotton seeds on its own land, and then realize the income, that is, to extend the trade as the center to the upstream and downstream of the industrial chain.

With regard to the current cotton price, the cotton futures price of 14500 yuan / ton is in the middle level in history. It corresponds to the current supply and demand, and I think it is basically balanced price. As for the future price changes, the core is still inseparable from the effective recovery of demand, one is the demand of terminal, the other is the demand of capital.

Production automation is the only way

Ni Junlong, chairman of Anhui Huamao Group Co., Ltd.: in the cotton textile industry, cotton downstream enterprises have been having a hard time. On a large scale, first, there is structural overcapacity and fierce competition. Second, Sino US trade friction has brought great impact on textile enterprises. In addition, the sudden outbreak of the epidemic this year has brought new challenges to the textile industry.

Standing in the perspective of cotton textile enterprises, we are thinking about how to improve the competitiveness of enterprises, how to go out, how to improve the added value of products. The situation of each enterprise is different, and the way they take is also different. As far as Anhui Huamao is concerned, I think there are two aspects that can play a very good role in overcoming the epidemic this year and planning the next development of enterprises.

The first is to attach great importance to the transformation and upgrading of enterprises. Intelligent manufacturing is an important means of transformation and upgrading of traditional industries. In recent years, we have spent a lot of energy on intelligent transformation. Since 2016, Anhui Huamao and some domestic equipment manufacturing enterprises and software development enterprises have jointly developed some automation, information and automation software. In October 2017, the largest single scale automatic chemical plant in China was put into operation. The labor cost decreased by more than 70%, the labor productivity and production efficiency were greatly improved, the product quality was more effectively guaranteed, and the overall labor cost was reduced by 30%. The intelligent chemical plant also plays a good role in avoiding the artificial problems caused by the epidemic this year, which also brings enlightenment to cotton production and processing enterprises. Compared with American cotton and Australian cotton, they started to take the road of automation, intensive and large-scale production very early. I think that if the problem of large-scale production is not solved, other problems will be very difficult solve.

The second is to adjust the product structure. Many textile enterprises are discussing how to speed up the overall adjustment of product structure, which stems from the market demand on the one hand, and the quality and price changes of raw materials on the other hand. Anhui Huamao has made great efforts in the overall structural adjustment. In the past, it basically made pure cotton products and seldom made differentiation. This year, nearly 1 / 3 of the products are doing differentiation, because the fluctuation of cotton price makes enterprises very uncomfortable.

In terms of cotton quality, I think China's cotton quality is good historically, but the current problem is that the quality of cotton is not stable. This year it will be OK, and it may become another situation next year. We hope that Xinjiang's cotton can maintain stable quality, which really needs to cooperate with each other in cotton planting, cotton processing and trade, so as to make Xinjiang's cotton better.

As for the textile market, from the perspective of the general environment, the market has recovered, but I am pessimistic about market consumption. On the one hand, China is a big textile export country, and the largest export consumption markets are the United States, Europe and Japan, but these markets are not very good now. On the other hand, from the perspective of the domestic market, it is no problem for many people not to buy clothes within five years. This has triggered concerns about the weakness of consumption growth among textile industry practitioners.

Three aspects of innovation boost the sustainable development of the industry

Yang Xiaodong, full time vice president of China Garment Association: 20 years ago, clothing consumption accounted for more than 20% of household consumption. In 2019, clothing consumption only accounts for 6.5% of the total household consumption. Is the expenditure of household consumption reduced? No, clothing consumption is relatively stable, but our income increases, and other consumption patterns also increase. China produces more than 40 billion pieces of clothing a year, which is not necessarily oversupply. From the perspective of consumption, it has a constant consumption state.

At present, our goal is to improve the textile and clothing industry chain, build supply chain and create value chain. In the past two years, the communication between the upstream and downstream of the industry has become more and more close, especially this year, which truly reflects the "upstream cold, downstream medicine". Since the outbreak of new crown pneumonia at the beginning of the year, garment production has indeed decreased, and orders transferred to the upstream, affecting the operating rate of cotton textile enterprises. Since October, the price of cotton in the upstream rose, which led to the rise of cotton yarn price, but it was not transmitted to the clothing industry. We are worried about this kind of price increase, because the bearing capacity of the downstream is not enough. This kind of sudden rise or periodic price rise may make a profit for a certain link of the industrial chain, but it is absolutely unsustainable.

My personal view is that the current cotton price fluctuation is very difficult to conduct downstream. It will gradually fade in the process of transmission, and the downstream will gradually bear the load to reach a new equilibrium state. I believe that for China's textile industry, which has a relatively complete industrial chain, such a single industrial chain will not have a great conduction effect on the downstream. When there is no downstream demand, it will in turn reduce the price rise of upstream raw materials.

At present, China's entire textile industry has a perfect industrial chain, and we are moving forward along the high-quality development path of the textile industry, advocating and adhering to the industrial orientation of "science and technology, fashion and green". Around the theme of "innovation and development", I would like to talk about innovation in the textile industry from three aspects

First, technological innovation. Textile industry is an application-oriented industry of science and technology. Especially for terminals, big data has changed the mode of production and organization of products. In this case, the enterprise should adapt to the needs of digital development, in the production link, marketing link, including the supply chain construction, should realize the digital upgrade. In terms of scientific and technological innovation, clothing enterprises, regardless of production, sales and marketing, embrace the Internet in an all-round way and realize digitalization.

The second is the innovation of fashion. Fashion reflects more product innovation. At present, upstream innovation is a little weak. However, over the years, some good upstream product innovation has been recognized by consumers, such as Lycra fabric, Tencel, modal and other upstream product innovation, not only to the downstream terminal industry, but also to consumers and recognized by consumers. Innovation is the means to achieve fashion.

Third, green innovation. Green development emphasizes the sustainable development of the industry. Nowadays, enterprises pay more attention to the quality of products and the social responsibility of products. We also actively advocate the overall social responsibility image of the industry, including the promotion of circular economy, and actively create the green ecology of the industry, so as to promote the sustainable development of the industry through green manufacturing.