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High cotton prices reduces competitiveness of textile companies

15
Jun '09
A number of textile factories in Xingtai and Handan of Hebei Province are in a state of shutdown or semi-shutdown as they have almost no supply of cotton. Cotton warehouses of textiles mills are almost empty.

Most of the mills are carrying stocks which may last them between just 15-20 days, which is considered a precarious situation. The mill owners are perturbed by the continuous rise in cotton prices.

They say that domestic cotton price is too high for the enterprise to make any profits. China's textile industry is now fully integrated into global competition, and is more competitive than foreign textile enterprises.

But India and other countries have no quota and no tariff on cotton imports and their market prices ranges between 10,200 Yuan to 10,600 Yuan per ton, nearly 3,000 Yuan less than the price prevailing in China's markets.

The cost difference makes China's cotton spinning enterprises less competitive in international markets. The textile mills have requested the government to help them ride out the storm by releasing adequate amount of cotton reserves.

Fibre2fashion News Desk - China


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