Increasing cotton prices have nearly collapsed the international market creating an unstable situation. Inventories of raw materials are running low and even cotton stock in warehouses is depleting at a fast pace.
Cotton is being sold at 14,000 yuan per ton indicating that manufacturers have hiked the prices by nearly 200-300 yuan per ton. Producers of cotton garments will be affected the most by this negative trend.
Moreover, the recently implemented labor law has increased worker's salaries which have further hiked the cost of production and thereby the price of cotton yarns.
Labor cost has increased by 10-15 percent in coastal and some developed regions. Besides, appreciation of RMB has also been a major factor behind high cotton prices.
On March 11, cotton producers held a meeting to increase the prices of yarn.
While carded yarns under 40S increased by 200-300 yuan per ton, high-count carded and combed yarns rose by 400-700 yuan per ton.
Experts suggest that the higher the yarn count, the greater will be prices of raw cotton. Current prices of KC32S and JC40S are focused at 20,200 yuan per ton and 24,500 yuan per ton respectively.
Fibre2fashion News Desk - China
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