Home / Knowledge / News / Textiles / Cotton prices play havoc with Vietnamese textile firms
Cotton prices play havoc with Vietnamese textile firms
Dec '11
Vietnamese textile firms depending on imported inputs are facing major difficulties due to various factors including volatility in cotton prices, exorbitant interest rates and high inflation rates.

As stated by the Vietnam Cotton Association, the global cotton market is seeing much volatility in cotton prices. Scarcity of cotton coupled with a constant rise in the commodity prices during first three months of the current year compelled textile firms to procure cotton at historic high prices.

While prices soared from US $2 to 5 per kg during the first quarter, it dropped radically during the second quarter. Moreover, as the firms failed to sell the yarn in the period, it had several adverse consequences.

Some of the firms were required to cut production to reduce stockpiling, while some others were forced to breach their contractual commitments, causing them to accept losses which are likely to push these firms to bankruptcy.

Such great volatility did not allow any enterprise to run sustainably without bearing any losses during April to November, when cotton prices plunged from the peak of US $5 per kg.

By the time the cotton which was bought when at its peak was processed, in to yarn, cotton prices has slumped to $2.5 per kg, following which some firms suffered a loss of $1 to 3 billion, while some other fateful firms even suffered a loss of $7 to 8 billion.

It takes around two to two and a half months to ship cotton from East and West Africa and one to one and half month from India and America.

Thus, only those firms, which can well plan in advance their production strategy as well as import requirements, can shun risk. Basically, the firms can mitigate losses only by taking insurance to tackle cotton price volatility, the association concluded by saying.

Fibre2fashion News Desk - India

Must ReadView All

Textiles | On 27th Oct 2016

Teijin Frontier develops Solotex RC lightweight fibre

Teijin Frontier Co. Ltd, fibre products converting company and part...

Tosha Hays addressing the conference. Courtesy: College of Family and Consumer Sciences, UGA

Textiles | On 27th Oct 2016

Industry experts discuss future of fabrics at UGA

Industry experts, researchers and military officials discussed the...

Textiles | On 27th Oct 2016

Fischer Konzept installs sixth Zünd digital cutter

Fischer Konzept, German developers of individual packaging solutions...

Interviews View All

Claudia Kersten
Global Organic Textile Standard

‘GOTS is a very efficient supply chain management tool, especially for...

Sanjay Yagnik
Maa Tex Speciality

‘We suggest reducing dosage of sizing chemicals to reduce sludge...

Ghanshyam Ghoghari
Kimora Fashion

Bridalwear is not about reds and whites anymore

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Marcel Alberts

Coating at a fibre level is a practice not usually seen in the...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Igor Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies

October 2016

October 2016

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Browse Our Archives


Advanced Search