Cotton enterprise spot settlement railway freight reduced

Recently, some cotton enterprises and operators in Xinjiang have reported that although there has been an increase in inquiries from small and medium-sized cotton textile mills, and the requirements for lint quality are not high (length of 28mm and above, strength of 28CN and above, Ma value of 5.2 or below), most cotton textile enterprises have put forward the requirement of "delivery to factory, payment upon delivery", which is somewhat difficult for cotton enterprises, especially for cotton enterprises using loans from Agricultural Development Bank, credit cooperatives, and other commercial banks. Due to the fact that cotton must pay off the loan in full in order to leave the regulatory warehouse, cotton enterprises generally require cash and spot payments from both domestic and foreign regulatory warehouses in Xinjiang, without credit or accepting acceptance bills or domestic letters of credit.

A cotton enterprise in Aksu stated that since mid to late March, although some customers in southern Jiangsu, Henan, Hubei and other regions have contacted for goods and offered prices higher than the market price of 100-150 yuan/ton, they need the seller to deliver the goods to the factory by car without paying a deposit. Considering the high risk, the cotton enterprise cannot accept the "payment on delivery" condition.

Recently, some cotton related enterprises reported receiving a notice from the Freight Department of Urumqi Railway Bureau that the cotton freight price has been reduced by 30%. Cotton warehouses in Aksu, Bachu, and other places in southern Xinjiang have also received a notice from the railway bureau that cotton transportation prices will be adjusted by the end of March, but it is expected that the reduction will not be as significant as 30%.

After the Spring Festival, the overall price of cotton transportation out of Xinjiang by truck has decreased. The cost of directly shipping from warehouses to mainland cotton textile factories is slightly higher than the comprehensive expenses of railway transportation (including freight forwarding, inland warehouse loading and unloading fees, warehousing fees, etc.), which is 50-100 yuan/ton or even flat, forcing the railway transportation price to be lowered. In addition, the railway freight rates have been lowered by industries such as coal and metallurgical energy. According to the "Notice on Several Suggestions for Promoting Railway Supply Side Reform and Deepening Spot Logistics" issued by the China Railway Administration, the autonomous reduction of transportation prices by each railway bureau has expanded from the current 15% to 30%, with only a further 15% reduction. Anyway, the reduction in the cost of cotton railway transportation out of Xinjiang is a tangible benefit for cotton and cotton textile enterprises both inside and outside Xinjiang.