Cotton in China has become concentrated in the hands of a few dealers, who would purchase the cotton at around 13,400 yuan per ton and add their storage expenses before selling it to the manufacturers at high prices.
Medium scale textile enterprises, in Henan Province, have already started complaining about sluggish business proceeds. Besides, financial strain which has almost stagnated sale of products, is making it extremely difficult for textile units to sustain their production process.
Further, manufacturers find it difficult to borrow from the banks in China and the only solution to the existing problem is to sell their cotton yarn, in spite of low remunerative prices.
On the other hand, entrepreneurs cannot even resort to the alternative of shutting down production as this would only aggravate the situation and create problems like paying salaries, bearing the cost of the equipment, rents, maintenance and loss of expert technicians without any revenue.
Fibre2fashion News Desk - China
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