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China's textile exports face difficult situation in 2013

February 04, 2013 (China)

Exports of China’s textile industry are likely to continue to face very difficult situation in 2013, due to high domestic cotton price, continued rise of labour prices and demand downturn in international market, vice president of China Textile Industry Association Gao Yong said recently.
Mr. Yang said all the three factors together affect the competitiveness of the Chinese cotton spinning industry and subsequently, the entire textile value chain.
In 2012, textile and garment exports from China only increased by 3.3 percent year-on-year, the lowest level since the negative export growth in 2009. The textile and clothing exports also grew at a much slower pace than the overall Chinese export growth rate of 7.9 percent year-on-year.
The slackening of international demand for textiles and apparels can be understood from the fact that total textile and garment imports by the US and the EU dipped by 0.9 percent year-on-year and 5 percent year-on-year respectively during the first 11 months of last year.
Secondly, there has been a continued rise in cost of labour during the past few years. China’s labour prices rose 20 percent year-on-year in 2010 and 2011 and by another 10 to 15 percent in 2012. The continued rise in labour prices has led to a decline in competitiveness of China’s textile and garment industry in the international market.
Another factor is the wide gap between domestic and imported cotton prices. At present, the cost of imported cotton, including tariff, works out to around 13,000 yuan/ton, while the price of domestic cotton released from state reserves is 19,000 yuan/ton.
Thus, there is a price difference of 6,000 yuan/ton, or the domestic cotton price is about 45 percent higher than the international cotton price, which significantly impacts the competitiveness of China’s cotton spinning industry.
In the first 11 months of 2012, China’s cotton yarn exports declined 8.9 percent year-on-year, while imports increased drastically by 56.1 percent year-on-year. It means that the amount of cotton consumed by Chinese textile mills dipped by about 2 million tons in 2012.
All these led to a decline in market share of China's textile industry in international market. From January to November 2012, China’s share in the EU and Japanese textile and apparel import markets fell by 1.8 percent year-on-year and 1.1 percent year-on-year, respectively.

Fibre2fashion News Desk - China
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