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Cotton scarcity severely hits apparel factories
09
Dec '10
Cotton scarcity coupled with its rising prices has severely hit the international cotton market, thus causing the textile and garment units in Vietnam to suffer severe dearth of inputs for their units. The prices of cotton in the international market have continuously been rising since the beginning of the current year, and have registered a rise of around US $1.9-2 per kg during the months of May and June, that is it grew by some 40 percent over the earlier month's figure.

Presently, the prices have reached a record high in the last 140 years at four dollar per kg, registering a hike of 100 percent. This rise in the price of the commodity is mainly because of a considerable fall in the cotton production of US and China, two of the world's leading cotton exporters, due to the ongoing drought. India, the world's second most leading exporter of cotton, has declared that it too would ban cotton exports in order to secure adequate supply for domestic industries, and this has adversely influenced the global market.

According to the world economists, the cotton producing nations are now facing severe scarcity of the raw material. This has escalated the prices of the commodity, in spite of which it is being demanded highly. The prices are expected to rise further, which is seen to add to the difficulties of the countries like Vietnam, which mostly import cotton for production purpose. They are supposed to face difficulties in the procurement of the raw material and manufacturing of products over the next few months.

The country proposes to raise the number of its cotton farms for the reason that its present output of 10,000 tons sources only two percent of the country's overall demand for the commodity, while it imports the remaining 98 percent. Moreover, the country is also required to import 80 percent of the other materials that go into production of clothes, which is the reason why the raise in cotton price not only influences the textile sector but even the clothing industry.

A majority of the Vietnamese textile producers vended their products in the middle of the year when the prices of commodity surged by 40 percent. Now, they are struggling against the price rise and scarcity of cotton to meet the future orders as per the agreements. Due to lack of knowledge about the situation in global market, they did not stock any cotton. The dearth of commodity and rise in its prices has forced several textile producers to stop their production. Rise in the prices of cotton has also boosted the prices of cotton fabrics, which in turn have pushed the prices of clothes.

Fibre2fashion News Desk - India


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