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China's textile firms hike prices at Canton fair
20
May '13
The Chinese textile enterprises increased their prices by 3 to 5 percent at the 113th China Import and Export Fair or the Canton Fair, which ended earlier this month at China’s Guangzhou city.
 
Although there is a substantial stability in the cotton prices and labour costs in China, the Chinese textile enterprises are worried that their share of profit will be lost due to the fluctuations in exchange rate, according to experts.
 
Hence to maintain their profits, the Chinese enterprises increased their prices by 3 to 5 percent while accepting orders at the trade fair.
 
The assistant general manager of Guangdong Textile Import and Export Co. Ltd., Mr. Zhong said the current monthly salary of workers in countries like Bangladesh and Cambodia, is around US$ 80, which is much lower than that in China, where the salary is in the range of US$ 500-600 per month.
 
The high labour costs add up to increase the overall cost of production in China. The only advantage for the Chinese textile enterprises is the time required for delivering the orders, as Chinese companies are able to ship goods within two months time, while the other Southeast Asian countries require a minimum of three months time to deliver the goods from the date of accepting the order. Hence, the Chinese textile firms participating in the trade fair accepted orders that needed to be delivered within a short period of time.
 
The statistics from the China Foreign Exchange Trade Center shows that the value of yuan against the US dollar has been appreciating in the recent time. 
 
In the absence of stability in yuan-dollar exchange rates in the future, Chinese firms have to fix the exchange rate beforehand since the payment is made after a long time.
 
Textile industry experts believe that the industry has entered a high-cost and low-growth era. According to them, the increasing pressure on the Chinese textile enterprises is mainly due to the price difference between cotton prices of China and abroad, the debt crisis in Europe and many uncertain factors affecting the international economic situation.  
 

Fibre2fashion News Desk - China

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