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Prices of Chinese textiles decline on shrinking demand
Nov '11
The prices of Chinese textiles are maintaining a downward trend owing to shrinking demand, including the decline in exports.

Downstream enterprises are adopting a 'wait and watch' strategy due to bearish market sentiments. Their current procurement of raw materials like cotton, yarn or fabric is limited to the quantity necessary for their day-to-day production.

Although the stocks of cotton have declined significantly from their earlier high levels, the inventory is still higher compared to the same period last year. As a result, price continues to take a downward turn.

On the export front too, there has been a significant slowdown during August and September. According to customs statistics, textiles and garment exports declined 9.7 percent on a month-on-month basis in September.

Moreover, the orders taken at 110th Canton Fair were also less than expected. There was a decline both in terms of the number of exhibitors from overseas as well as in trade volume.

The weakening of demand in the Chinese export markets and appreciation of exchange rate will also add to the pressure on prices. Hence, prices of textile items are likely to sustain their declining trend in the coming months.

Fibre2fashion News Desk - China

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