custom cold forging automotive bushing Custom Automotive Bushing,Carbon Steel Car Suspension Steering Sleeve,Stainless Steel Liner Sleeve,Stainless Steel Car Liner Hebei Yuanyue Trading Co.,Ltd , https://www.hbyuanyue.com
Reduce the spread of cotton at home and abroad to ease pressure on textile companies
In recent years, the disparity between domestic and international cotton prices has continued to widen, placing significant pressure on Chinese textile companies. High raw material costs have made it increasingly difficult for these firms to manage their operations. Starting this year, the government has decided to phase out the temporary cotton purchasing and storage policy, replacing it with a target price mechanism. This reform is expected to narrow the price gap between domestic and global markets, easing the financial burden on textile manufacturers.
The pressure on textile companies is intensifying due to the mismatch between local and international cotton prices. While global cotton prices have been declining, domestic prices remain relatively high, making it challenging for Chinese firms to compete internationally. According to Mr. Wang, head of a textile export company in Hunan, the high cost of domestic cotton has significantly increased production expenses, putting a strain on profitability. He noted that orders have been decreasing over the past few years, as clients are shifting production to countries like Vietnam.
Similarly, an executive from Hangzhou Light Industry Arts & Crafts Textiles Import & Export Co., Ltd. shared that some of their factories were idle during August and September last year, which was unusual for the typical peak season. The reasons included both a weak international market and customers moving orders to Southeast Asia.
Hunan Yintai Textile Group has started sourcing cotton yarn from Pakistan and India, where prices are significantly lower than in China. With imported cotton yarn priced at around 12,000 yuan per ton compared to 19,000 yuan domestically, many companies are turning to foreign suppliers. This shift has created challenges for domestic spinning enterprises, as the supply chain is becoming increasingly distorted.
Zhu Sujun, head of Shanshan Group’s International Trade Department, confirmed that exports have been sluggish, with reduced order sizes and lower prices. Orders now require a minimum of 500 units, down from 200-300 in previous years.
Analysts believe that the removal of the temporary purchasing and storage policy will lead to a more market-driven cotton pricing system. Sun Liwu from Zhuo Chuang Information Market predicts that domestic cotton prices will gradually align with international levels. Industry estimates suggest that the average domestic cotton price in 2014 could range between 15,000 to 16,000 yuan per ton, bringing the price gap closer to normal levels.
Chang Jianghui from the China Textile Import & Export Chamber of Commerce emphasized that the policy change will benefit the industry by improving competitiveness and boosting exports. A textile company representative from Shandong stated that the new policy will help reduce domestic cotton prices, allowing companies to access more affordable raw materials. Meanwhile, a Henan-based executive noted that the narrowing price gap will eventually lead to higher profits for domestic textile firms.
This article is a reprint of online media. It only represents the author's point of view and does not necessarily reflect the views of this site. If you believe any content infringes on your legal rights, please contact us, and we will handle it promptly.