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Textile sector worried over soaring raw material prices

14 Jul '10
1 min read

Prices of textile raw materials (including natural and synthetic) rose between 44 and 80 percent from late last year to June this year. Among which acrylic fiber, among chemical fiber raw materials showed the fastest growth rate to rise by 80 percent.

In addition according to a Chinese Ministry of Commerce report, current prices of silk have soared to its highest level in 15 years. Cotton price too has surged nearly 70 percent since November 2008.

Undeniably, as non-cotton textile materials are mostly petroleum based products, the monopolistic chemical fiber industry has strong pricing power.

The biggest worry for the textile sector is that most of the products that they manufacture and sell have not been able to absorb the full impact of the rise in raw material prices, which has lead to bottoming out of margins.

Some experts point out that the risks of Chinese economy likely to be dragged down are increasing, due to double squeeze from rise in raw materials prices and wage hikes of workers, with no proportionate increase in per unit prices.

Fibre2fashion News Desk

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