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SunSirs: The Impact of RCEP on China's Textile Industry
November 19 2020 08:44:33SunSirs(Linda)

Guangxi autumn cocoon production cuts sharply, Chinese cocoon silk prices fluctuate upward

According to SunSirs price monitoring, the domestic cocoon silk market fluctuated slightly in November. As of November 18, the average price of raw silk in the raw silk market was 303,500 yuan/ton, up 2.02% from the beginning of the month and down 25.34% year-on-year; 92,000 yuan/ton, an increase of 1.71% from the beginning of the month, and a year-on-year decrease of 30.17%. The current price of dry cocoon in Guangxi is 92,000 yuan/ton, and the price of raw silk is 302,000 yuan/ton.

Affected by the sharp reduction in silkworm cocoon production in Guangxi this autumn, the price of silkworm cocoons hit a new high since the epidemic. The purchase price of the fourth batch is generally around 42-45 yuan/kg, the gross discount is 8.2-8.5, the cocoon cost is 340-350 thousand yuan, and the quality of the fifth batch of silkworm cocoons is average , The purchase price has fallen compared with the previous batch. Due to the high level of fresh cocoons in Guangxi and other places, some factories have approved the gradual delivery of the products that will be produced. At present, high-quality raw silk is better than low-grade raw silk. There is a shortage of raw materials in silk mills, and expectations of production suspension and production reduction have increased, and the willingness to raise prices is more obvious.

In the current silkworm chrysalis market, in terms of prices, the loading price of domestic fresh pupa in Guangxi factory is generally about 13,000-14,000 yuan/ton for class A, (out of stock) about 12,000-13,000 yuan/ton for class B, and about 11,000-12,000 yuan/ton for class C. The basic loading median price is about 12,500-13,500 yuan/ton. Wet and dry pupae are around RMB 5,000-6,000/ton for class A and RMB 4,500/ton for class B. Feed dried silkworm pupa is about 7,200-7,500 yuan/ton. The receiving price in Thailand is about US$2,350/ton, Vietnam is about 20,000 dong/kg, and South Korea is about US$1,400/ton for dry and wet pupae.

As the silk reeling of fresh cocoons is coming to an end this year, the volume of goods has decreased. The northeast of China began stocking mainly in the Shenyang market. The Shandong market started to stock up during the Spring Festival. The RMB exchange rate has been stable recently and there is still a certain appreciation. After the rise in shipping prices, there is a tendency to stabilize. Foreign Southeast Asian markets start stocking on New Year's Day, which is expected to have a positive impact on exports.

Orders for Double 11 and Christmas since September, the traditional textile and apparel orders in early and mid-October are still intensive. Under the support of the peak season of 'Silver October', textile companies have placed orders until late November, and some companies placed orders until December. , Textile enterprises maintain a high load of about 70% to accelerate the rush to order. This year, the e-commerce platforms on Double 11 have achieved new successes, demonstrating the steady release of restorative consumption, the expected improvement in the domestic consumption cycle, and the rising demand for rigid consumption. Although the textile industry has entered the traditional off-season in November, according to China Textile City, most of the fabric market is currently 'market orders'. The characteristics of market goods are that they come and go quickly, and the duration is not long. With the approach of Christmas and the Spring Festival, under the stimulation of holiday orders, the market has limited cooling in the short term.

Export market

The export market has performed well and has achieved positive growth for five consecutive months. It can be seen from the situation of textile and apparel exports in October that China’s exports of masks, protective clothing and other types of textiles have maintained rapid growth. The latest data from the General Administration of Customs shows that in October 2020, textile and apparel exports were US$24.84 billion, an increase of 10.7%, of which textile exports were US$11.66 billion, an increase of 15.7%, and clothing exports were US$13.18 billion, an increase of 6.6%. From January to October, the cumulative export of textiles and apparel was US$240.62 billion, an increase of 9.5%, of which textile exports were US$129.61 billion, an increase of 31.9%, and clothing exports were US$111.0 billion, a decrease of 8.6%.

Signing of RCEP may also benefit China's textile and clothing exports

SunSirs analysts believe that the number of foreign trade orders placed in November is expected to continue to increase compared with the previous month. Demand in East Asia, West Asia, the Middle East and Africa, and the Americas will continue to recover, and customer orders from European countries will also continue to be placed. In addition, with the advent of winter, frequent flu and repeated epidemics, the export of masks, protective clothing and other types of textiles still maintains rapid growth, and is expected to drive the overall textile and clothing to continue to improve year-on-year. At the same time, the signing of RCEP may also benefit China's textile and clothing exports. It will also have a positive impact on the export of cocoon and silk. Domestically, although the textile industry has entered the traditional off-season, products such as silk quilts have ushered in the peak sales season. After Double Eleven has just ended, there will also be consumption on Double 12, New Year's Day, Spring Festival and seasonal consumption. On the whole, the cocoon silk market will remain volatile and strong.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.

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