Do not let cotton price fly again

The problems brought about by the Khmer price have become increasingly apparent. There are issues that need to be studied and discussed in terms of cotton cultivation, picking, lint processing, spinning, and cotton imports. The marketization reform of the cotton industry, giving full play to the basic role of market allocation of resources, avoiding the ups and downs of cotton prices once again, ensuring the long-term healthy and stable development of the cotton market has become the common voice of cotton textile companies.

"Current cotton prices are falling and yarn prices are falling more. Due to the high cotton prices, weak downstream demand and increased yarn inventory, business pressure is very high. The cotton price issue has been talking since the second half of last year. It is very difficult to solve this problem, which is really the most pressing problem that we have to bear on us.” Manager of Yarn Textile Company of Henan Xinye Textile Co., Ltd. said in an interview. The large fluctuation in cotton prices since the second half of 2010 has brought great uncertainty to the production and operation of textile companies, and has also directly affected the market expectations in the future.

For cotton textile companies, the price of cotton is a reluctance to talk about. Last year, the good situation in the industry was largely determined by the rise in cotton prices that led to the price of cotton yarn. Nowadays, various problems brought about by the Khmer price have become increasingly apparent. There are issues that need to be studied and discussed in terms of cotton cultivation, picking, lint processing, spinning, and cotton imports. The marketization reform of the cotton industry, giving full play to the basic role of market allocation of resources, avoiding the ups and downs of cotton prices once again, ensuring the long-term healthy and stable development of the cotton market has become the common voice of cotton textile companies.

The plan has clearly concluded that the purchase price of the lowest purchase price will eventually come into effect in recent years. Because the benefits of planted cotton are lower than that of grain production, coupled with more cotton inputs, lower mechanization, more labor, and less service, it affects the enthusiasm of farmers to grow cotton. As a result, the cotton acreage continues to decline and the country’s cotton production has declined year by year.

Xu Wenying, vice chairman of the China Textile Industry Association and honorary chairman of the China Cotton Textile Industry Association, believes that the soaring price of cotton since last year is a reflection of the contradiction between supply and demand and the result of hype. As the state subsidizes the production of grain, and cotton is not, the contradiction between supply and demand is increasing as cotton output declines and cotton yarn production increases. Therefore, it is of great significance to encourage the enthusiasm of planting cotton, increase the planting area, increase the yield per unit to the development of the textile industry, meet the needs of consumers, and promote economic development. Encouraging farmers to grow cotton is a top priority for macroeconomic regulation and control. In recent years, the China Cotton Textile Industry Association has been actively advising relevant state agencies to follow the example of subsidizing grain farmers and including cotton cultivation in the scope of financial subsidies. The industry has also been calling for the government to introduce minimum protection pricing measures for cotton farmers to protect the farmers' enthusiasm for planting cotton.

National Development and Reform Commission, the Ministry of Finance, the Ministry of Agriculture, the Ministry of Industry and Information Technology, the Ministry of Railways, the General Administration of Quality Supervision, Inspection and Quarantine, the Ministry of Supply and Marketing Cooperatives, and the Agricultural Development Bank of China jointly issued the 2011 annual cotton interim storage and storage plan on March 31. We decided to implement an interim cotton purchasing and storage system starting from 2011 to stabilize the market expectations of cotton producers, operators and cotton companies, protect the interests of cotton farmers, and ensure market supply.

Relevant analysts believe that the more significance of the policy launch is to stabilize the upcoming cotton planting, so that the prospect of increased planting area will be further consolidated, making the “seed cotton purchase protection price” that the industry has been calling for for many years to eventually come into effect, and also the cotton price. The long-term and stable operation protection is at the same time a measure for the country to effectively improve the contradiction between supply and demand from a long-term perspective.

The person in charge of the related textile company believes that the introduction of the 2011 cotton temporary storage and storage plan will reduce the risks brought about by cotton market fluctuations to cotton farmers and will be conducive to the stability of the domestic cotton market. However, the temporary cotton purchasing and storage price determined in the 2011 cotton temporary storage and storage plan may be low. According to the calculation, the reserve price of cotton for the collection and storage of 19,800 yuan/ton in the new year is converted according to the current price of cottonseed, and the approximate purchase price of new flower is about 10 yuan/kg, which is lower than the current price of ** and spot.

In addition, in order to strengthen the regulatory role of cotton reserves, increase the state's cotton reserves for the regulation of the cotton market, some textile company officials recommend that the country import cotton reserves at a timely manner to ensure that there is about 2 months of cotton consumption.

The high levy and low deduction issue highlights the company's desire to resolve chronic diseases. With the significant increase in the cost of production, the issue of value-added tax for cotton raw materials for a long period of time has become increasingly prominent.

According to the current VAT system, the input tax rate for China’s cotton textile enterprises is 13%, while the VAT rate for sales of products is 17%, which means that the sales tax rate is levied on 17% of the sales of products, and the purchase credit for cotton is purchased. The tax rate is calculated at 13%. For a long time, these 4 percentage points have been paid by the textile companies themselves. As the cost of cotton raw materials accounts for more than 70% of the production costs of cotton textile enterprises, the value-added tax of cotton raw materials has greatly increased the company's costs. According to the 2009 China Cotton Textile Industry Association's investigation of corporate value-added tax, a difference of 4 percentage points will increase the taxation of cotton textile industry by more than 5 billion yuan. In recent years, as raw material prices have risen sharply and labor costs have continued to increase, the profitability of cotton textile companies has been continuously squeezed. According to research statistics, after deducting the cost of cotton, the production cost and profit margin of the cotton-to-cotton 32-count yarn was reduced from 7,300 yuan in 2000 to 3,995 yuan in January 2010.

Some industry experts have analyzed that deep processing of cotton is not the same as processing of other agricultural and sideline products. The seed cotton sold by farmers has not been directly sold to spinning companies. Instead, the cotton processing plant has processed the acquired seed cotton into lint for textiles. Lint should belong to industry. For products, the sales value-added tax should be collected at 17%. Since farmers do not pay tax on sales of seed cotton, the virtual deduction tax rate for cotton processing plants can be adjusted accordingly to 17%. In this way, although the cost of purchasing lint from cotton mills has increased, the VAT on cotton yarn sales is also 17%, which is in line with the principle of VAT flat-rate deduction.

Sun Yingan, chairman of Hubei Xiaomian Industrial Group Co., Ltd., pointed out that the current value-added tax credit of cotton spinning enterprises deducted 13% of input tax, output tax deducted 17%, corporate tax burden was heavy, and low profit level affected the industry. With the advancement of technology and structural adjustment, the wage level of employees is also difficult to increase. As the representative of the country, he mentioned the issue several times in the *****. He hoped that the state will pay attention to the increase in the income of workers in labor-intensive industries in addition to the investment in fixed assets while boosting domestic demand. By leveling taxes and other measures to improve the profitability of enterprises, enterprises can transfer the increased profits to workers' income.

The price of foreign cotton is higher than that of domestic elimination of imported sliding tariffs. Due to the dual control of quotas and sliding tariffs on cotton imports, the tax burden on textile companies has increased, which is detrimental to the use of global cotton resources by enterprises and adjustment of the cotton import sliding tax policy. .

Industry analysts believe that the price of foreign cotton has been much higher than domestic prices, and it is no longer necessary to implement imported cotton-slip quasi-tax rates. Because at this stage, the price of imported cotton is unlikely to fall below 11,397 yuan per ton. Above this price, a specific tax of 570 yuan per ton is currently imposed. Based on the current import price, the actual import tariff is less than 2%. Because of the import quota control, it has effectively ensured the import of cotton according to the gap, and it is recommended to adjust the cotton import sliding tariff policy to implement subsidies for seed cotton. This will not only protect farmers but also take care of the interests of textile enterprises.

All along, China has adopted import quotas to regulate the cotton market and effectively control imports according to quotas issued by the cotton gap. In 2005, for the protection of the interests of farmers, the state imposed a 5% to 40% import sliding tax. Dual control made China's cotton prices a long period higher than the international market, making China's cotton textile products participate in international competition. It is not at the starting line with other countries.

Since 2005, China has imposed a slip-tax rate on 894,000 tons of new cotton, that is, when importing cotton, when the cotton price in the international market is lower than the domestic price, a sliding tax is imposed on the imported cotton price and domestic cotton. The price is flat. Although the implementation of the sliding tax has played a positive role in promoting domestic cotton sales, stabilizing domestic cotton prices and protecting the enthusiasm of cotton farmers, the textile industry has assumed a heavy tax burden. Cotton textile enterprises were forced to implement lower wage levels to maintain production and exports. Cotton textile companies demanded that the elimination of sliding tariffs on the basis of quota control be increasingly loud.

Xu Wenying pointed out that the ups and downs of cotton prices prove once again that the marketization reform of the cotton industry is the trend of the times and should give full play to the basic role of market allocation of resources, and on the premise of improving the competitiveness of cotton production, support cotton textile enterprises to make full use of international Domestic two resources.