Import call on cotton for textile producers
The National Development and Reform Commission has urged textile firms to raise cotton imports ahead of expected price rises next year on tighter supply.
The commission yesterday said that buyers should take advantage of a recent decline in cotton prices, with the latest statistics showing sales waning in the first 11 months of this year. In tandem with lower inventory, it forecast an upward trend on cotton prices.
Higher raw materials prices look set to aggravate the plight of mainland textile and garment firms which will face unprecedented challenges next year on the combined effects of a new labour contract law, a new regulation on the use of chemical substances in the European Union and the cancellation of a quota regime on textile exports to Europe.
'Shrinking imports and inventory this year will lead to tighter supply of cotton next year,' the commission said yesterday.
'Textile firms should grab the opportunity of recently lower prices by increasing imports to avoid higher costs next year and weakened competitiveness.'
Last month, cotton prices drifted 1.3 per cent higher to 13,646 yuan a tonne in the mainland market. This price was higher than the after-tax quotation of 13,244 yuan a tonne on December futures of the New York Mercantile Exchange, according to the commission.
Rising cotton prices globally caused the mainland's imports to slump 37.2 per cent to 2.13 million tonnes in the 11-month period from last year.
Although the mainland, the biggest consumer of cotton, has awarded textile firms an import quota of 3.5 million tonnes this year, the commission expected imports of 2.4 million tonnes only.
The China Chamber of Commerce for Import and Export of Textiles, one of the largest industry bodies with 6,300 members, warned yesterday of a harsh year ahead as consumer demand weakened due to the United States' unfolding credit woes.
It also warned of new trade barriers in Europe when the quota regime would be lifted on January 1, followed by that of the United States one year later.