Wuhan, Hubei Province: Textile Enterprises Gradually Resume "Order By Sales" To Mitigate Risks

Since the beginning of this year, some areas of our country have encountered the new crown pneumonia epidemic situation and flood disaster, and the entity enterprises are facing unprecedented difficulties. In order to deeply understand the situation of cotton textile industry in Hubei Province returning to work, China cotton net reporter went to the front line to carry out research.

It is understood that due to the late resumption of work in Hubei Province, it has gradually returned to normal since May, resulting in serious loss of customer orders of some textile enterprises. The person in charge of a trade enterprise in Hubei told reporters that most of the local textile enterprises bought high price lint for production years ago. Due to the epidemic situation, cotton prices dropped sharply and orders decreased, and some enterprises faced great business pressure. Since the resumption of production and production in April, the enterprise has been in good condition. Although the trade in Hubei has been greatly affected, the overall impact of the enterprise is small due to its small proportion.

The person in charge of the enterprise said that during the off-season period of the industry, the business situation of the enterprise was better than expected, mainly due to the following three reasons: first, the cotton price this year has been relatively stable since April, after the textile enterprises resume production, the impact on cotton trade is small, and the sales are even better than the same period last year; second, the difference between domestic and foreign cotton prices is small, and textile enterprises give priority to domestic cotton in raw material procurement. It is understood that the current price of lint in China is about 12000 yuan / ton, while the price of Indian cotton transported to Hubei is 11800 yuan / ton (without ticket). Compared with domestic cotton with similar quality, the price advantage of imported cotton is not obvious; Third, some enterprises which are greatly affected by the epidemic situation have difficulties in financing, and the cotton reserve effectively alleviates the financial pressure on the production of enterprises. In addition, the blockade and control in Xinjiang has hindered the transportation of cotton in Xinjiang, which has accelerated the cotton sales in inland warehouses.

The reporter learned that the enterprise's raw material procurement mainly adopts the way of "order by sales", fixed-point procurement, fixed-point sales, select some cotton that meets the enterprise's customer group indicators, and reduce the enterprise's procurement risk from the source. At the same time, the enterprise from the source of procurement to later sales, the implementation of staff responsibility system, greatly reducing the business risk of the enterprise, so as to ensure the normal operation of the enterprise.