Chinese textile enterprises have still not been able to shed the impact of volatility in cotton prices in the previous year.
Though current cotton prices are ruling around 19,000 Yuan / ton, there are still many textile factories which are still carrying inventories bought around 21,000 Yuan / ton.
At current cotton yarn prices, cotton textile units are losing around 1,500-2,000 Yuan / ton for yarn produced from higher-priced cotton inventories.
Cotton prices started rising September 2010 onwards. From a bottom of 18,000 Yuan / ton, they skyrocketed to nearly 34,000 Yuan / ton in April 2011.
Thereafter they began sliding and bottomed out at 19,000 Yuan / ton in December 2011. This was the most difficult period, cotton yarn units faced in their lifetime.
Fibre2fashion News Desk - China