Although currency appreciation has long been a major concern for most export-oriented companies, during the recent China International Textile Fabrics and Accessories Exposition at the Shanghai New International Expo Center, reporters observed that many businesses are now more worried about something else—rising raw material costs.
Shanghai Xinze Import and Export Co., Ltd., a silk fabric manufacturer and exporter, showcased vibrant silk fabrics at its booth, but the sales representative, Luo Yan, looked visibly stressed. She explained that since October last year, the price of raw silk—a key input for their products—has doubled. The current market price for white factory yarn has surpassed 340,000 yuan per ton. Despite owning their own production facility, the company is struggling to remain profitable due to the mismatch between rising material costs and stagnant export prices. According to her, the impact of raw material price hikes has been worse than the effects of currency appreciation.
Jinsuo Textile Co., Ltd., based in Lanxi, Zhejiang, is a large textile enterprise specializing in denim fabrics and garments. Its annual export value exceeds 30 million US dollars. A salesperson, who preferred to remain anonymous, said the company has been hesitant to accept new orders since the second half of this year. This is because the rapid increase in cotton and other raw material prices has made it difficult to maintain stable pricing. Foreign buyers are unwilling to absorb these cost increases, so the company is forced to take orders even at lower margins. For example, Cotton Yarn prices have risen from 35,000 yuan per ton in August to 44,000 yuan today. The daily fluctuations—up by 1,000 to 2,000 yuan—are causing real anxiety among industry players.
According to several exhibitors and professionals attending the textile exhibition, the surge in raw material prices has become one of the biggest challenges for Chinese textile exporters. This is largely due to an imbalance in supply and demand. While the price of cotton has increased significantly this year, farmers haven’t seen much benefit, which hasn’t led to a substantial rise in planting enthusiasm. Moreover, frequent natural disasters have slightly reduced domestic cotton output. On the international front, the U.S., the world’s largest cotton exporter, has seen a decline in both area and production. India, the second-largest cotton producer, has imposed export restrictions this year. Meanwhile, severe flooding in Pakistan, a major cotton-growing country, has drastically cut its production. These factors have contributed to a global shortage, driving up prices.
As the world's largest textile and garment exporter, China’s demand for raw materials continues to grow. Last year, China imported roughly one-third of the world’s total cotton. According to data from the General Administration of Customs, clothing exports reached $93.48 billion from January to September this year, while textile yarns and fabrics totaled $56.327 billion—an increase of 7.35% and 12.97% compared to the same period in 2008. Rising global and domestic demand, combined with raw material shortages, is now a major obstacle for China’s textile exports and could pose long-term challenges for the industry’s growth over the next few years.
Shanghai Xinze Import and Export Co., Ltd., a silk fabric manufacturer and exporter, showcased vibrant silk fabrics at its booth, but the sales representative, Luo Yan, looked visibly stressed. She explained that since October last year, the price of raw silk—a key input for their products—has doubled. The current market price for white factory yarn has surpassed 340,000 yuan per ton. Despite owning their own production facility, the company is struggling to remain profitable due to the mismatch between rising material costs and stagnant export prices. According to her, the impact of raw material price hikes has been worse than the effects of currency appreciation.
Jinsuo Textile Co., Ltd., based in Lanxi, Zhejiang, is a large textile enterprise specializing in denim fabrics and garments. Its annual export value exceeds 30 million US dollars. A salesperson, who preferred to remain anonymous, said the company has been hesitant to accept new orders since the second half of this year. This is because the rapid increase in cotton and other raw material prices has made it difficult to maintain stable pricing. Foreign buyers are unwilling to absorb these cost increases, so the company is forced to take orders even at lower margins. For example, Cotton Yarn prices have risen from 35,000 yuan per ton in August to 44,000 yuan today. The daily fluctuations—up by 1,000 to 2,000 yuan—are causing real anxiety among industry players.
According to several exhibitors and professionals attending the textile exhibition, the surge in raw material prices has become one of the biggest challenges for Chinese textile exporters. This is largely due to an imbalance in supply and demand. While the price of cotton has increased significantly this year, farmers haven’t seen much benefit, which hasn’t led to a substantial rise in planting enthusiasm. Moreover, frequent natural disasters have slightly reduced domestic cotton output. On the international front, the U.S., the world’s largest cotton exporter, has seen a decline in both area and production. India, the second-largest cotton producer, has imposed export restrictions this year. Meanwhile, severe flooding in Pakistan, a major cotton-growing country, has drastically cut its production. These factors have contributed to a global shortage, driving up prices.
As the world's largest textile and garment exporter, China’s demand for raw materials continues to grow. Last year, China imported roughly one-third of the world’s total cotton. According to data from the General Administration of Customs, clothing exports reached $93.48 billion from January to September this year, while textile yarns and fabrics totaled $56.327 billion—an increase of 7.35% and 12.97% compared to the same period in 2008. Rising global and domestic demand, combined with raw material shortages, is now a major obstacle for China’s textile exports and could pose long-term challenges for the industry’s growth over the next few years.
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