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Rising cotton prices spell trouble for textile sector
Sep '10
Recently, cotton prices have quickly and crazily increased from 17,000 Yuan to 20,000 Yuan, up 20 percent in four days, which adds tremendous cost pressure to textile industry. Experts say that this means trouble time for the textile industry again.

Senior advisor Li Xuerong from the China Investment Corporation says that, cotton prices have been rising since last year, the main reason attributed to imbalance between supply and demand.

In addition, market speculation is also one of the factors boosting cotton prices. Some cotton traders with financial strength and experience have begun to hoard cotton, grab cotton and speculate in cotton.

The persistent contradiction between supply and demand makes the characteristics of long duration and large range of current rise in cotton price, which has not yet seen its peak, but, will bring a heavy burden onto textile and garment industry.

“The Investment Analysis and Forecast Report on China's textile industry in 2010-15” released by China Investment Corporation shows that cotton price bottomed out in September last year.

Prices of standard cotton increased from over 9000 Yuan / ton at that time to climb to heady levels of 20,000 Yuan / ton in present times.

Cotton yarn price too have risen sharply. Price of carded cotton yarn 32s is now at 25,200 Yuan / ton, an increase of 33 percent compared with 18,900 Yuan / ton in October last year.

Fibre2fashion News Desk - China

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