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Vietnam's Cotton Industry Advocates Risk Management

2011/7/6 17:18:00 55

Vietnam Cotton Risk Management Production Cost

In recent months, due to the continuous increase of Vietnamese garment exports, the demand for cotton by domestic producers is growing.

However, due to the fluctuation of international cotton prices and the reduction of domestic cotton planting area, Vietnam's cotton industry is facing a serious crisis.

Stakeholders pointed out that Vietnam's cotton industry focused on risk management to avoid losses due to fluctuations in global market prices.

"No matter what is taken

Raw material cost

Hedging measures, creating future market strategies or adopting hedging measures should aim at minimizing risks. "

Adam, vice president of the US economic policy analysis agency and the national cotton Commission, proposed that Vietnam's cotton industry should take measures to reverse the passive situation affected by price fluctuations at a seminar held recently in Hu Zhiming.

At present, Vietnam's cotton planting is mainly concentrated in NingShun and Ping Shun provinces in the south.

Cotton cultivation in these areas is mainly carried out in families, because it is difficult to achieve cotton production.

Mechanization

Therefore, local cotton production efficiency is low; on the other hand, cotton prices are lower than corn, cocoa and soybean, and cotton farmers' willingness to grow cotton gradually decreases.

Two reasons made Vietnam's cotton industry in crisis.

Ruan Hongjiang, Secretary General of the Vietnam Cotton Textile Association, said that the annual output of Vietnam's cotton is about 3500 tons, which only meets 1% of the local 380 thousand tons demand.

Therefore, Vietnam's cotton supply had to rely on imports, of which 40% of the total cotton imports from the United States were imported from India, and the rest came from West Africa, the former Soviet Union and Australia. 15%~16%

In order to reverse this heavy dependence, Vietnam Cotton Association encourages cotton farmers to actively cultivate cotton, and gives corresponding support measures to cotton farmers.

Adam suggested: "Vietnam should find suitable methods in future market planning strategies, which can neither increase their"

Production costs

At the same time, we should minimize the risk of price fluctuation.

Some textile factories should cooperate with wholesalers supplying cotton.

Adam believes that Vietnam has great potential for export of cotton textile products, especially exports to the United States.

It is understood that last year Vietnam was the fifth largest supplier of cotton textiles in the United States, second only to China, Pakistan, India and Bangladesh, accounting for 5% of the total cotton imports in the US market.

Insiders pointed out that in order to increase the share in the US market, Vietnamese cotton textile exporters should cooperate with retail brands in the United States and actively establish a supply chain relationship.