china cotton price, import policy and consignment trade tcem
TRANSCRIPT
China Cotton Price, Import Policy And Consignment Trade
TCEM
www.icotton.cn
目 录
Cotton Net Gap change from Rigidity to Flexibility
The Influence of RMB appreciation
Domestic Supply & Demand Data
Sliding Import Duties Affect the Price
China’s Cotton Price in 2007
Unfavorable Environment for China Textile Industry
Sliding Import Duties Affect the Price Sliding Import Duties Affect the Price
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China Cotton Price
Domestic Supply & Demand Data
In 2006 China enjoyed a cotton harvest with plantation 79.97mil. mu and 6.73 million tons output 。 (Data from NBS -- National Bureau of Statistics of China ).
In 2007 cotton plantation is 81.7 million mu which is 2.2% higher than that of in 2006.
Output will be 7.07mil.tons in early September this year.
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China Cotton Price
Cotton production in Main Areas
07 Plantation10,000mu （ ）
06 Plantation10,000mu （ ）
plus/ mius± %（ ） 07 output 06 output
plus/ mius± %（ ）
XizJ iang 2004 1950 2.8% 250 250 0%
ShanDong 1430 1395 2.5% 110 103 7%
HeNan 1218 1200 1.5% 85 83 2%
HeiBei 950 935 1.6% 65 64 2%
HuBei 602 608 -1.0% 48 46 4%
AnHui 587 562 4.4% 39 36 8%
J iangSu 518 520 -0.4% 35 38 -8%
HuNan 230 203 13.1% 23 21 10%
Total 7539 7373 2.2% 655 641 2%
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China Cotton Price
Cotton production in 2007
Plantation in Main Provinces
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Cotton production in 2007
Output in the Main Provinces
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China Cotton Price
www.icotton.cn
China Cotton Price
China cotton consumption
in the second quarter, the GDP growth in the first half of 2007 is 11.9%, and the annual GDP growth is expected to be 10%. For the past 4 years, the growth has been holding 9% and up.
China’s per capital consumption of fabric also shown a rapid upward. In the past three years, the increase is 15% per annum and will maintain the strong growth.
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China Cotton Price
China cotton consumption
For 2006-07 is 10.88 million tons, while for the 2007-08, the predicted cotton consumption will be 11.75 million tons. 。
In 2006, China’s yarn production is 17.22 million tons. By the end of July in 2007 , the yarn production is 17.33 million tons.
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China Cotton Price
Unfavorable Environment for China Textile Industry
above 95% are non-stated-owned enterprises in textile industry, one of the most market-oriented industries in China.
increase of domestic labor costs, the raise of raw material price and the decrease of the tax-return for textile export, the profits margin of the textile industry is extruded further.
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China Cotton Price
Un-favorable Environment for China Textile Industry
created a lot of trade surplus benefiting from the good quality and cheaper price,
and now are suffering from tense trade
frictions and technical barriers caused by this trade gap.
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Unfavorable Environment for China Textile Industry
The Influence of RMB appreciation
China’s cotton & textile industry chains in main three elements: raw cotton—yarn & fabrics — apparel and textile. Products are distributed to two markets: for export and for domestic demand.
China’s textile industries export related ratio is up to 53%.
Any block in the industry chain will affect the benefits and efficiency of the whole industry. The slowdown in exports will have a direct and strong effect on the market demand for cotton.
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Unfavorable Environment for China Textile Industry
The Influence of RMB appreciation Up till August 31, 2007, the cumulative
RMB appreciation had reached 3.365%, exceeding 3.349%-- the annual increases of 2006.
Taking into consideration the one-time adjustment at the start of the reform in 2005, the appreciation is higher ,i. e 9.557%. the corresponding for 2006 is 5.525%.
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Unfavorable Environment for China Textile Industry
The Influence of RMB appreciation
RMB Appreciation will weaken the labor comparative advantage in textile industry which is the most critical points in China textile exports.
The appreciation of RMB can further enhance the higher value-added products, accelerate industry re-construction.
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Unfavorable Environment for China Textile Industry
Lower Tax Rebates for Textile
Export tax rebates for textiles was lowered from 11% to 9%, for garments from 13% to 11% from July 1st ,2007.
let market itself to select textile enterprises, to optimize the allocation of the resources.
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Unfavorable Environment for China Textile Industry
Lower Tax Rebates for Textile
There will be a remarkable change on China’s export textiles’ orientation, expediting the export of high value-added products.
The state aims to transform China textiles industry from Huge to Strong.
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China Cotton Price
Cotton Net Gap transit from Rigidity to Flexibility
confronted with ever severe market situation. Some small-sized textile mills are shutdown, and the large and medium-sized are keeping operating rate around 70-80% due to the large inventory.
Lower production and higher yarn counts comes out lower cotton consumption in volume. China domestic cotton supply gap will be affected more by the markets nationally and internationally
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China Cotton Price
China national reserves sound stronger in the supervision
During July 16th – Aug. 22nd in 2007, China had auctioned 300,000mts of commercial and reserve cottons.
Since 2003, China had invested 10 more new warehouse
giving 600,000mts. more spaces to national reserves.
China remain 3.27mil.mts of cotton stock in 2006/07 and 2.996mil mts for 2007/08.
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China Cotton Price
China Cotton Price
Influenced by rapid micro-economy growth, higher of CPI , planting cost, other crops prices new crops price will be
higher than that of 2006. But the price can not go higher than mills can accept as
the commodity price finally needs to be confirmed by the consumers, and China textile industry are now
compressed in and out.
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Import Policy for Cotton
Principles for Sliding Duty Policy on Imported Cotton
Use proper preferential temporary tax to increase import.
To make the imported cotton price similar to domestic cotton price by the adjustment on import duties.
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Import Policy for Cotton
Sliding Duty Policy on Imported Cotton
On Jan. 1st , 2007 China amend the sliding duty ratio slightly to reveal the difference of the quality, reduce the
risk of custom supervision.
Ratio range from 6% - 40% compare with 5% - 40% in 2006
Duties are lower than last year for the price lower than
usd 0.575/lb and higher than that for usd 0.66/lb.
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Import Policy for Cotton
Amendment Sliding Duty Policy in 2007
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Consignment Trade in China
General Situation of Consignment
Tianjin Cotton Exchange Market and ECOM first start to sell the imported cotton on consignment terms in free trade zone in China at the end of 2003.
International cotton dealers positively quickly suit themselves to the business custom in China.
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Consignment Trade in China
General Situation of Consignment
The average volume in consignment is abt.400,000mts per month in 2007.
And sales abt. 20% - 43% of China total imports according to different month.
And percentage is higher in mid of the year .
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Consignment Trade in China
The Good part for the consignor
raise the rate of profit take the preemptive opportunities. popularize imported cotton
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Consignment Trade in China
The Good part for the Chinese mills
Have prompt delivery Accelerate funds flow Reduce price risks Avoid quality uncertainty
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Tianjin Cotton Exchange Market
Physical market for imported cotton in China
TCEM aims to serve market participants in China and abroad alike by taking advantages of the geographical position and preferential policies of BinHai New Area
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Tianjin Cotton Exchange Market
Cover the 70 percent of China domestic cotton consumer areas
Have established branch markets in Zhangjiagang Free Trade Zone,
Qingdao FTZ Guangzhou Huangpu FTZ,
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Tianjin Cotton Exchange Market
Logistics Service , Inspection Centers,
To cooperate betted with CIQ, TCEM has established Cotton Inspection Centers in the above areas. The center is equipped with USTER HVI
TCEM will invest more in constructing the warehouses in the 4 base ports
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Tianjin Cotton Exchange Market
Financial assistance, Information net
Loans with warehouse receipts to the
consignors and Chinese buyers . Update our website from tjcotton to
international cotton in China -- ICOTTON.CN
TCEM