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Cotton price will decide fate of Chinese textile firms

13 Jul '12
1 min read

The future of textile and apparel enterprises in China, which are currently facing problems, will be, to some extent, determined by the price of cotton in Chinese domestic market, according to experts.
 
At present, several Chinese textile companies have decreased their production substantially. While large manufacturers are operating at 30-50 percent of their production capacity, small units are already seeing bad times owing to insufficient orders and weak market.
 
The Chinese textile and apparel industry, which employs over 40 million people, is considered one of the biggest in the world.
 
As of 2011, China’s spinning capacity accounted for half of global output. According to a recent report by the China Cotton Association, total yarn production of large-scale Chinese enterprises fell by one percent from January to May 2012.
 
Industry experts point out that the main reasons for downturn in the Chinese textile industry are the current international market situation and increase in production cost of textile enterprises.
 
Since cotton accounts for 70 percent of production cost, the price of cotton, to some extent, will determine the fate of textile enterprises, they add.
 

Fibre2fashion News Desk - China

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