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Chinese textile firms face difficulties in getting cotton
May '13
Textile enterprises in China are finding it difficult to procure cotton as around 6.5 million tons of 2012-13 cotton has already entered the warehouses under the Government’s temporary cotton purchase and storage policy.
Currently, the available cotton resources for textile enterprises are insufficient, and downstream enterprises make little spot purchases.
In the given scenario, textile enterprises in China can procure cotton either by participating in auction of cotton reserves or by importing cotton.
Some textile enterprises find the cotton released from reserves is not of good quality and it does not meet their production requirement. These companies find it difficult to get cotton as imports are under quota restrictions.
Textile companies are in search of other ways to get cotton to meet their production needs. One solution is to buy cotton import quotas from other enterprises that hold quotas in hand. At present, the transfer price for quota is around 3,300 yuan/ton, which greatly increases the cost of cotton for enterprises.

Fibre2fashion News Desk - China

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