Cocoon silk price stays high in the whole 2010, and it gradually comes down in 2011. From the beginning of 2011 to early June, cocoon price finally break through the history high price 410000CNY/t, which could be called as the last madness. Afterwards, the market weakened, and the price gradually downward, until recently, the price went down to 370000CNY/t. Cocoon spot price began to drop in May.
First of all, spring cocoon come into the market in large scale. Domestic fresh cocoon stock will surely increased, thus the two main cocoon silk market price dropped straightly down, the price drop actually is the accumulated chain reaction.
Secondly is the market regulatory effect. See from the overall silkworm cocoon price. 410000CNY/t is beyond the bearing of silk plants and fabric plants and also beyond end consumers’ accessible price. Some plants in eastern China area even stop production or even close the plants, triggering a difficulty for the downstream industry chain. Thirdly, downstream product is unsalable. The double fold price is certainly inhibit terminal consumption. In the recent years, the recession of European and American market plays some impact on China’s silkworm cocoon industry. Silk clothing, silk home textile product and other high class product is mostly absorbed by the European and American market. On silk production in the first half of year, silk production increased slightly, and silk garments production kept in line, year on year, silk fabric reduced 40% while exportation reduced 10%. The dull sale of silk product is surely lead to the upstream raw silk price downward. The last point is the outer environment factor. In the first half of year, China’s textile industry shows an steady operation trend. The overall industry runs stably, production and consumption rate lowered down month by month. Textile garments exportation increased sharply, and its profit margin will be narrowed gradually. In the second half of year, the textile industry will continue to face high external risk, and to further improve risk control and coping ability is still the top priority.
Therefore, the price call back is a reasonable market trend. But, apparently, if the price is too low, producers will suffer a great loss. I hope cocoon silk market can find a reasonable price system, giving mutual benefit to both agricultural farmers and textile enterprises.
On the whole, dry cocoon price is around 90000CNY/t, and such a low price is not likely to change. Spot raw silk price is around 370000CNY/t. With the coming of spring and summer silkworm raising stage, silk price will come into a phase of adjustment. Cocoon silk price stays heavenly high for the past two years, and now it will be adjust to a reasonable price level. If the overall price level is reasonable, the silk industy will develop in a health way. The long term high price is obviously harmful to silk plants, therefore, silk price will continue to drop for the recent period.
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