Textile companies have to seek for another "way out" as cotton prices continue to rise

Cotton price rises all the way up, supply is tight, quality is not ensured, while fabric price can not increases in synchronization, combined with employment pressure and squeezed profit margins of small weaving factories, textile enterprises have to seek for another way out.

Many enterprises have began to adjust product structure, reduce amount of cotton in production process, some small and medium textile enterprises take a holiday to avoid the peak of rising costs, some enterprises finance each other to stabilize cotton sources, such as advance payments to cotton processing enterprises, cotton acquisitions through target organizations.

Prices of chemical fiber and other related products also follow up high cotton prices, which have affected consumer market. As cotton price rises, textile production has shifted to more chemical fiber and other alternatives, triggering a chain reaction, resulting in higher product prices.

As of mid-October, prices of chemical fiber products led by polyester staple fiber increased from 9,600 Yuan per ton to 13,000 Yuan per ton, an increase of over 30 percent.

Industry sources said, "prices of chemical products were mostly adjusted by the influence of oil price fluctuations in the past, but now price of chemical fiber follows up with cotton price."　Price hike of raw materials and fabric products produces a direct result of increased price of downstream products, clothing and textile products have their prices increased to varying degrees. For example, a set of "Three Gun" underwear was sold at 37-38 Yuan last year, but the price has risen to 48 Yuan per set this year.

source:ChinaTexnet