CPI is the English abbreviation of consumer price index. It is an index of price changes that reflects the price of goods and services related to the lives of residents. It is usually used as an important indicator of the level of inflation observed. According to data released by the National Bureau of Statistics, China’s CPI rose by 5.3% year-on-year in April 2011.
Obviously, with the increase in the prices of agricultural products such as vegetables and grain, the market retail prices of China's textile and apparel products also show a large-scale and large-scale upward trend. Looking at Parkson, the Pacific, and other large department stores, the prices of many clothing and clothes and hats rose by 1-2% over the same period in 2010. Chunyi generally rose 50--100 yuan per piece. At the same time, in the autumn and winter trade fairs that are held at present, textile and clothing companies are busy raising product prices, ranging from 10% to 30%. However, even if the price of textile and clothing products has risen so much, companies still complain about it, saying that not only has profits not risen, but it has also fallen sharply. Some small and medium-sized textile and garment enterprises are struggling and even have to stop production. Where did the strange phenomenon of "price rise and loss" in the industry come from, and who took away the profits of textile and garment enterprises?
Textile companies: Rising production costs and power cuts Since the beginning of 2010, Cotton prices have been soaring. They have been dubbed “crazy cotton†by the majority of people in the industry. Faced with soaring cotton prices, the main affected enterprises are foreign-export-oriented fabric companies and upstream cotton Yarn manufacturers. Among them, the small companies that use pure cotton as their main raw material have suffered the most serious impacts and losses.
Rossi is the boss of a small textile company in Fuzhou. He positioned his factory as a "professional cotton manufacturer." All along, Rossi’s production of various types of cotton fabrics is mainly exported to India, Iran and other Middle East regions. In October 2010, his factory's business was still very hot and the orders were quite adequate. The products were taken away in the entire cabinet. However, due to the continuous rise in cotton prices, he suffered huge losses. In February 2011, Rossi quoted a customer who ordered velveteen fabrics for 22 yuan per meter. However, from the time the customer placed the order to the pick-up in May, the price per hectare of fabric needed to be produced in accordance with the cotton price at that time needed to reach 24.5 yuan to be profitable. However, the customer still pays 22 yuan per meter according to the contract price. As a result, Rossi’s profits were lost. And such losses can only be borne by the company itself. As for the price increase, it is also a problem that the next single business may involve.
Cotton prices have been very volatile since 2011, which has led to an increase in the prices of related raw materials. This has made it impossible for the prices of various types of products in the industrial chain of the textile and textile industries such as grey cloths and fabrics to stabilize. In fact, the volatility and instability of the market for textile products have already severely squeezed the profit margins of fabric companies.
The situation faced by the Rossi factory is only a microcosm of the situation of most small coastal textile enterprises. It is understood that after the National Day in 2010, many small cotton yarn manufacturers or small fabric companies in Jiangsu and Zhejiang provinces cut production or even stopped production. Even some large fabric companies or cotton yarn companies have a certain degree of reduced production. Because such crazy raw material prices have made them unable to bear, and even if they gritted their teeth and made grey cloths, it is difficult to sell them according to their expected judgments.
In order to cope with the unfavorable situation of rising cotton prices, some textile companies that originally produced pure cotton products began to use chemical fiber materials instead of cotton. However, due to this reason, it has inevitably driven up the price of chemical fiber raw materials. It is understood that polyester, viscose and other fiber raw materials have risen to varying degrees since 2011. However, relatively speaking, the price increase of chemical fiber raw materials is far lower than the increase in cotton prices.
In addition, the “labor shortage†at the same time as the dramatic increase in labor wages has also contributed to the decline in the profits of textile and apparel companies known to be labor-intensive and low-tech. In fact, after the Spring Festival in 2011, all the national small and medium-sized garment enterprises have encountered an unprecedented recruitment problem. This problem spread from the Pearl River Delta to the Yangtze River Delta and spread from Beijing, Tianjin and Tangshan to the central and western regions. Including some of the textile and garment companies that have moved to the west, the labor-exporting provinces and cities in the traditional sense of the Midwest have encountered the embarrassment of not recruiting workers.
The direct result of the emergence of "employment shortage" is that the textile and apparel companies go past the sea, and they are trying to recruit workers. But in the final analysis, all methods are directly linked to the economy. For example, to increase employee salaries, the average increase is about 10%; the old employees introduce new employees to the factory to give 200-300 yuan rewards and so on. As far as the profits of textile and garment companies are concerned, the shortage of employment in spring will affect the harvest in the company's autumn.
Obviously, with the increase in the prices of agricultural products such as vegetables and grain, the market retail prices of China's textile and apparel products also show a large-scale and large-scale upward trend. Looking at Parkson, the Pacific, and other large department stores, the prices of many clothing and clothes and hats rose by 1-2% over the same period in 2010. Chunyi generally rose 50--100 yuan per piece. At the same time, in the autumn and winter trade fairs that are held at present, textile and clothing companies are busy raising product prices, ranging from 10% to 30%. However, even if the price of textile and clothing products has risen so much, companies still complain about it, saying that not only has profits not risen, but it has also fallen sharply. Some small and medium-sized textile and garment enterprises are struggling and even have to stop production. Where did the strange phenomenon of "price rise and loss" in the industry come from, and who took away the profits of textile and garment enterprises?
Textile companies: Rising production costs and power cuts Since the beginning of 2010, Cotton prices have been soaring. They have been dubbed “crazy cotton†by the majority of people in the industry. Faced with soaring cotton prices, the main affected enterprises are foreign-export-oriented fabric companies and upstream cotton Yarn manufacturers. Among them, the small companies that use pure cotton as their main raw material have suffered the most serious impacts and losses.
Rossi is the boss of a small textile company in Fuzhou. He positioned his factory as a "professional cotton manufacturer." All along, Rossi’s production of various types of cotton fabrics is mainly exported to India, Iran and other Middle East regions. In October 2010, his factory's business was still very hot and the orders were quite adequate. The products were taken away in the entire cabinet. However, due to the continuous rise in cotton prices, he suffered huge losses. In February 2011, Rossi quoted a customer who ordered velveteen fabrics for 22 yuan per meter. However, from the time the customer placed the order to the pick-up in May, the price per hectare of fabric needed to be produced in accordance with the cotton price at that time needed to reach 24.5 yuan to be profitable. However, the customer still pays 22 yuan per meter according to the contract price. As a result, Rossi’s profits were lost. And such losses can only be borne by the company itself. As for the price increase, it is also a problem that the next single business may involve.
Cotton prices have been very volatile since 2011, which has led to an increase in the prices of related raw materials. This has made it impossible for the prices of various types of products in the industrial chain of the textile and textile industries such as grey cloths and fabrics to stabilize. In fact, the volatility and instability of the market for textile products have already severely squeezed the profit margins of fabric companies.
The situation faced by the Rossi factory is only a microcosm of the situation of most small coastal textile enterprises. It is understood that after the National Day in 2010, many small cotton yarn manufacturers or small fabric companies in Jiangsu and Zhejiang provinces cut production or even stopped production. Even some large fabric companies or cotton yarn companies have a certain degree of reduced production. Because such crazy raw material prices have made them unable to bear, and even if they gritted their teeth and made grey cloths, it is difficult to sell them according to their expected judgments.
In order to cope with the unfavorable situation of rising cotton prices, some textile companies that originally produced pure cotton products began to use chemical fiber materials instead of cotton. However, due to this reason, it has inevitably driven up the price of chemical fiber raw materials. It is understood that polyester, viscose and other fiber raw materials have risen to varying degrees since 2011. However, relatively speaking, the price increase of chemical fiber raw materials is far lower than the increase in cotton prices.
In addition, the “labor shortage†at the same time as the dramatic increase in labor wages has also contributed to the decline in the profits of textile and apparel companies known to be labor-intensive and low-tech. In fact, after the Spring Festival in 2011, all the national small and medium-sized garment enterprises have encountered an unprecedented recruitment problem. This problem spread from the Pearl River Delta to the Yangtze River Delta and spread from Beijing, Tianjin and Tangshan to the central and western regions. Including some of the textile and garment companies that have moved to the west, the labor-exporting provinces and cities in the traditional sense of the Midwest have encountered the embarrassment of not recruiting workers.
The direct result of the emergence of "employment shortage" is that the textile and apparel companies go past the sea, and they are trying to recruit workers. But in the final analysis, all methods are directly linked to the economy. For example, to increase employee salaries, the average increase is about 10%; the old employees introduce new employees to the factory to give 200-300 yuan rewards and so on. As far as the profits of textile and garment companies are concerned, the shortage of employment in spring will affect the harvest in the company's autumn.
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