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Rising global cotton prices benefit Chinese textile mills
22 Aug '13
1 min read
Cotton prices in international market have increased to a nearly five-month high this week, with CotLook A index reaching 97.35 cents per pound. This has narrowed the price difference between international cotton and China’s domestic cotton to 3,400 yuan/ton.
The import of cotton by Chinese textile mills is one of the factors driving international cotton prices upward, according to market analysts.
However, the policy of the Chinese Government, including its temporary cotton purchase and storage policy, is the biggest uncertainty affecting international cotton prices.
If the domestic spot cotton supply and demand situation continues to remain same due to the policy intervention of the Chinese Government, international cotton prices will continue to rise, and thus decrease the difference between the price of cotton in international and domestic markets.
This would relatively lower the costs of Chinese textile mills, and thereby enhance their competitiveness in international market.
Fibre2fashion News Desk - India
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