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Exporters hike prices at Canton Fair
12
Nov '10
China's textile and apparel enterprises generally raised their prices by about 30 percent at the 108th Canton Fair, as prices of raw materials represented by cotton are sharply rising this year, which is accompanied by a decline in the number of buyers as well as export orders.

The Department of Foreign Trade under the Ministry of Commerce points out that currently textile and garment exporters face greater cost pressure and the state is concerned about this rather peculiar situation.

It adds that it will continue to maintain stable development of textile and apparel industry and increase intensity of macroeconomic regulation and control over cotton market by taking various measures.

Earlier this year, the spot price of domestic standard cotton was about 15,000 Yuan / ton, which rose to 18,000 Yuan / ton in September and has recently risen to 30,000 Yuan / ton.

There are several major reasons for cotton price rise. China faces a huge gap between demand and production, due to which, the Ministry of Commerce has planned to increase cotton imports, as China's production has reduced.

But China did not foresee that cotton production of global major cotton-producing countries too will decline. The flare-up in prices is also due to speculation on cotton. Funds have withdrawn from real estate and are investing in cotton, which has lent fuel to the fire.

Chinese export enterprises are disappointed for two main reasons. First, demand recovery in global markets is slow and second, buyers are worried about rising prices in China.

On the other hand, raw material and labor costs are rising; in addition, there are other factors, such as exchange rates and energy-saving, which is adding to the misery of these exporters.

Due to the ever-increasing prices of cotton, the Chinese textile and garment industry has reached the limit of cost tolerance and it cannot afford any more pressure, but raise prices.

Many textile and garment exporters generally consider it is difficult for cotton price to significantly decline in the short term and do not rule out the possibility of a further rise.

So, at the Canton Fair, they held a firm attitude towards increasing their prices and they would rather give up orders and not make concessions on prices.

Fibre2fashion News Desk - China

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