Shanghai Fabric Exhibition Extends: Raw Material Prices Rise in Export Enterprises

Although the appreciation of the renminbi is expected to be a problem that has plagued exporters, at a recent Expo China International Fabrics and Accessories Exhibition held at the Shanghai New International Expo Center, the reporter found that many companies feel that the most painful thing is not exchange rate changes, but cotton. Raw materials, chemical fiber prices.

Shanghai Sina Ze Import & Export Co., Ltd. is a silk fabric production and export enterprise. On the booth, colorful silk fabrics are very nice, but Miss Luo, the salesman, has a dignified face. She told reporters that in the year since last October, the price of raw silk, the raw material for the production of silk fabrics, has doubled, and the current market price per ton of white factory yarn has exceeded RMB 340,000. Although the company has its own factory, exports are basically unprofitable because the export prices of fabrics cannot keep up with the price increase of raw materials. She said that compared with the appreciation of the renminbi, raw material prices have caused more damage to the company.

Located in Lanxi, Zhejiang, Jinsuo Textile Co., Ltd. is a large-scale textile enterprise specializing in the production of denim fabrics and garments. The annual export value exceeds 30 million US dollars. According to a salesman of the company who did not wish to disclose his name, the company has not dared to take orders since the second half of this year, because cotton, cotton yarn and other raw materials have risen too quickly, causing price increases due to price increases, and foreign companies are reluctant to take on their own. No, so you can only accept orders. Take cotton yarn as an example. In August this year, the price per ton was 35,000 yuan, which is now 44,000 yuan. Now cotton yarn is almost a price for a day, a rise is 1,000 yuan to 2,000 yuan, people scared.

According to some exhibitors and professional visitors participating in the textile fabrics exhibition, the reason why the price increase of raw materials has become the most troublesome thing for China’s textile export companies is mainly due to the imbalance in market supply and demand. In China, although the increase in the purchase price of cotton this year is relatively large, there are not many benefits for cotton farmers. Therefore, the enthusiasm of cotton growers has not been significantly improved. In addition, frequent natural disasters this year have led to a slight reduction in domestic cotton production. In the international market, the area of ​​cotton in the United States, the world’s largest cotton exporter, has decreased in area and production has declined. India, the world’s second-largest cotton-growing country, has issued export restrictions this year. Pakistan’s major flooding disaster in Pakistan, one of the country’s main growing countries, has drastically reduced cotton production this year. These factors have resulted in a reduction in the supply of cotton and an increase in prices.

At present, China has become the world's largest exporter of textiles and garments, and demand for raw materials such as cotton continues to rise. Last year, China’s cotton imports accounted for about one-third of the world's total. According to the statistics released by the General Administration of Customs, from January to September this year, China’s clothing exports reached US$93.48 billion and textile yarns and fabrics exported US$56.327 billion, exceeding the historically highest 7.35% and 12.97% for the same period of 2008, respectively. The rise in international and domestic demand and the shortage of raw materials for textiles and garments have become major obstacles restricting the export of China's textile fabrics and other textiles, and may affect the development of China's textile industry within a certain number of years.