Xinjiang cotton production and business management analysis
——Xiao YuqingChairman, Xinjiang Cotton Industry Group
Firstly, Mr. Xiao introduces the operating status of Xinjiang cotton market. Cotton production in Xinjiang takes 70% of China's gross production. Though planting areas are shrinking, Xinjiang cotton output may not decrease much in 2015/16.
The sales rate of Xinjiang cotton is at around 80%, according to China National Cotton Exchange. Currently, there are only one month left before the arrivals of new cotton, but enterprises involved in cotton businesses still face large capital pressure.
By Jul 21, the total turnover of reserved cotton reached 29205.4275 tons with trading proportion of 7.87%, including 25535 tons of 2011/12 domestic cotton and 3670 tons of 2012/13 imported cotton. 2012/13 domestic cotton saw no transactions.
Secondly, Mr. Xiao forecasts 2015/16 Xinjiang cotton market outlook. Under the stable Chinese and international cotton markets, Xinjiang cotton market may continue to move lower in 2015/16 season. In general, risks and opportunities will coexist.
One the one hand, there are four aspects of positive factors:
1. The reform of target price reinforces the?strategic role?of Xinjiang cotton textile industry;
2.“One Belt One Road” strategy fuels robust development of cotton textile industry in Xinjiang;
3. Govermental policies are favorable;
4. Positive profits of textile enterprises boosts development of cotton enterprises.
One the other hand, negative factors also exist:
1. Higher cost, lower quality and difficult transportation;
2. Delays in innovation and adoption of modern business model, overcapacity and low quality;
3. Threats from overseas cotton market;
4. Lack of professional and technical talents.
Lastly, Mr. Xiao shares countermeasures for Xinjiang enterprises involved in cotton businesses:
1. To enhance cotton quality control;
2. To reduce cost and enhance efficiency, reducing cotton comprehensive cost;
3. Technology innovation and sales channel expansion;
4. Model innovation, promoting the whole cotton industry chain;
5. To seize initial chance, improving ability of grasping resources;
6. To transform and upgrade, eliminating backward capacity.