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Raw material purchase by Chinese textile industry dips
Jul '13
The purchase of raw material as well as finished product inventory with Chinese textile enterprises decreased in May, owing to traditional off season for the textile industry, according to the monthly review of the Chinese textile industry  for May released by the China Cotton Association.
During May 2013, orders from downstream buyers reduced and production of both yarn and fabric decreased during the month, the report says.
The purchase of all raw materials by the Chinese textile industry declined by 20 percent compared to April, the report said. According to the report, the decline in raw material purchase was due to a reduction in orders placed, mainly due to the starting of off-season period which runs from June to August.
The textile mills welcomed the release of cotton from state reserves, including imported cotton, during the early and middle May. 
The purchase of raw cotton by textile mills decreased 14.8 percent month-on-month in May, while cotton imports declined by 19.8 percent month-on-month, the survey said.
Similarly, the purchase of polyester staple fibre declined slightly during the month under discussion. 
According to survey, raw material inventory in May increased by 5 percent year-on-year, but down 16.2 percent over April. Raw cotton inventory with textile mills was up 1 percent year-on-year, but less 14.7 percent month-on-month. The stock of imported cotton grew by 17.2 percent y-o-y and 3.4 percent m-o-m. Synthetic fibre stocks rose by 20.3 percent y-o-y, but were lower by 22.1 percent on m-o-m basis.
The survey said yarn production increased by 0.4 percent y-o-y in May, but was down 0.7 percent m-o-m. Fabric production was up 1.4 percent y-o-y, but down 2 percent m-o-m. The increase in yarn and fabric production over 2012 was mainly due to an increase in operation rate of some big companies.
Overall yarn inventory was down 1.1 percent m-o-m in May, but pure cotton yarn inventory grew by 10 percent m-o-m, mostly due to a reduction in price in early May. Fabric inventory rose by 1.4 percent m-o-m, despite decrease in production due to reduced prices and lower demand, the report said.

Fibre2fashion News Desk - India

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