Home / Knowledge / News / Textiles / China's cotton storage policy impacts textile industry
China's cotton storage policy impacts textile industry
Sep '13
The cotton purchase and storage policy put in place by the Chinese Government to protect the farmers has resulted in a huge difference between the domestic and international cotton prices, leading to shutdown of several small and medium sized cotton spinning businesses.
The high cost of raw material pushed up the domestic prices of yarn, and weaving firms were forced to opt for low-priced imported yarn. Some large enterprises, however, shifted to production of high value-added products to survive, but they are still struggling to earn profits.
This year, too, the China National Cotton Reserves Corporation launched the 2013 annual temporary purchase and storage of cotton from September 9. The temporary purchase price for this year is same as last year’s purchase price of 20,400 yuan/ton.
On September 13, the spot price of cotton on CCI Index 328 was 19,137 yuan/ton, while the international cotton price index Cotlook A price was 14,220 yuan/ton. Thus, there was a price difference of 4,917 yuan/ton.
This huge price difference directly hurts the competitiveness of cotton spinning enterprises, which naturally lost some orders. 
On the other hand, the domestic spinning mills in China are not free to choose imported cotton, as there is a cotton import quota system, which is parallel to the policy of temporary storage of cotton. However, the downstream weaving companies can freely import cotton yarn.
According to China Textile Industry Association president Wang Tiankai, China’s present policy on cotton has three direct consequences. First, spinning mills use less cotton and increase the proportion of chemical fibre and other blended products. Second, large quantities of cotton and cotton yarn from India and Pakistan continue to enter the domestic market. Third, it leads to the shutdown of small and medium enterprises, making migrant workers jobless.

Fibre2fashion News Desk - India

Must ReadView All

Textiles | On 24th Jul 2017

Govt extends deadline for GST composition scheme to Aug 16

The Government on India has extended the deadline for small...

L-R: Dhanapal, JMD, Best Corporation; Prabhu Damodaran, Convenor, ITF; Narayanasamy, MD, Micro Cotspin; Senthilnathan, MD Rasitex India; and Sabapathy, MD, Prasanna Spinning Mills

Textiles | On 24th Jul 2017

TN mills seek partnership with cotton growing states

Spinning mills in Tamil Nadu are seeking stronger partnership with...

Textiles | On 24th Jul 2017

Irani terms GST as a ‘great step towards transparency’

Union textiles minister Smriti Irani has termed the Goods and...

Interviews View All

Neel Sawhney
One Friday

‘The share of kidswear segment in the online sector is still small in...

Smita Murarka

‘There is huge demand in the Indian lingerie market for non-wired styles.’

Luke Otten
Wigwam Mills Inc

Wigwam aims to recycle discarded yarn that doesn’t make it through the...

Marcel Alberts

Coating at a fibre level is a practice not usually seen in the...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Rupa Sood and Sharan Apparao

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


July 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category

Related Categories:

Planning to Take the Leap towards

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search