China looses advantage in low-priced cotton textiles

07 May '12

2 min read

China has lost its price advantage in low-end cotton textile products. India, Pakistan, Vietnam and other countries have taken over part of China's market share in global markets, with their advantages in low cotton prices and labor costs.

Even a large US t-shirt company set up factories in Bangladesh and South America, and then sends these products to China.

According to statistics, 59 percent of the US decline in imported cotton products was from China, while the increased volume of exports from Southeast Asian countries to the US accounted for 54 percent of China's reduction.

Currently the spread between Chinese cotton price and international market is basically around 3000 Yuan/ ton and the 16 percent export tax rebate is not enough to offset the pressure from rising raw material and labor costs.

Now worker's wages are two times from over three years ago, but export price of fabrics is lower than three years ago.

At present the entire textile industry is in a cycle of de-stocking, due to which enterprises generally say their orders have declined by 20-30 percent since this year.

Statistics also show that export value of China's textile and apparel in March grew by 13.4 percent year on year, but growth rate dropped by 37.2 percentage points over the same period last year.

In the case of difficult external living environment, the majority of textile enterprises hope that the Government will stabilize cotton price by using administrative means to avoid greater losses to these enterprises.

A top official of a large textile enterprise says that their relationship with customers turns tense, whenever cotton price fluctuates.

He says that buyers quicken up transactions, when cotton price rises, while they adopt a wait-and-see attitude, when cotton price drops and even put pressure on fabric suppliers by demanding a reduction in prices.

Fibre2fashion News Desk - China

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