Orders for clothing from overseas markets are growing, but profits are getting thinner and a number of garment enterprises are facing a dilemma in recent time, as rising costs are proving to be the single important reason for profits getting marginalized.
Cotton prices repeatedly strikes struck new highs this year and experts are of the opinion that, domestic cotton prices will witness another wave of increase in August and September. Cotton yarn price usually accounts for 60-70 percent of cost of producing a garment.
In addition, labour costs are also rising. More than 10 provinces and autonomous regions have raised minimum wage by 17-20 percent on average since this year and more provinces are also planning to raise minimum wage in the second half.
Vice-President of the Chinese Textile Industry Association, Sun Rui Zhe said recently that, in 2010, increasing prices have become a matter of concern for the clothing sector, with not much hike in prices of the final product.
Fibre2fashion News Desk - China
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