Rising raw material & labor costs force textile exporters to struggle

Textile exporters at the Canton Fair, China's largest trade fair, say they are struggling to survive amid rising raw material and labor costs.

"Wages have increased as much as 30 percent. But several of our partner plants have stopped production because of the worker shortage," said Chen Su, assistant to the general manager at Sunvim Group, China's biggest home textile company, yesterday.

In addition, prices of raw materials are rising rapidly. Cotton prices have risen from 18,160 yuan (US$2,720) to 27,405 yuan per tonne, a 51 percent increase. The prices of other fabrics are also rising.

Labor and raw material shortages often hamper textile output, leading to delivery delays, one of the greatest concerns for buyers.

Elliot Gessle, a British buyer at the Canton Fair, thinks Chinese textile products have lost their competitiveness. "Prices of most products are rising. But delivery delays have been the greatest headache," he said.

China's textile industry is facing competition from other Asian countries with low labor costs.

"Quality and efficiency in those countries are improving. They will catch up with China some day," said Gessle, who also purchases from Laos and Cambodia.

China exported US$149.8 billion of textile products in the first nine months of the year, an annual growth rate of 23.14 percent. But exporters say the numbers are misleading.

The numbers are growing only because buyers are making bulk orders, said Luo Ping'an, the deputy general manager of Anhui Garments Import and Export Co.

"In the past, buyers ordered goods for one or two months of demand. But now they buy half a year's goods in one order," Luo said.

He said buyers are making larger orders to avoid price rises and delivery delays.

source:Xinhua