Wang Tiankai: Upside down of cotton prices restricts textile development

Wang Tiankai, president of the China National Textile and Apparel Council, said at the 2014 China Textile Annual Innovative Figures Awards Forum that although the state has implemented direct subsidies for new cotton crops in Xinjiang in 2014, the huge national reserve cotton still needs to be digested. The spread of cotton at home and abroad will remain at around 3,000 yuan/ton, and the inverted price of cotton will restrict the development of the textile industry. It is expected that the indicators of the textile industry this year will remain unchanged from last year.

Affected by raw materials and other factors, the growth rate of China's textile and clothing industry has slowed down. Last year, the industrial added value of textile enterprises above designated size increased by 7% year-on-year, and the growth rate was lower than the 1.3% in the previous year. The total growth of textile and apparel exports also continued to decline.

Among the many factors constraining industrial development, the high raw material cost is the most prominent. Taking cotton as an example, international cotton prices fluctuate according to market supply and demand, while domestic cotton prices are still affected by state reserve cotton and import quotas. This has caused the spread of cotton at home and abroad. According to a recent survey conducted by China Textile Federation, domestic cotton prices have been on average 30% higher than the international market since 2014, and high price spreads have put pressure on companies.

China Textile Association recommends that the state conduct research on the disposal of state-owned cotton, and gradually release the quota of imported cotton, accelerate the circulation of domestic cotton, and gradually market it. "Also, it needs the transformation of the industry itself to open up new space," Wang Tiankai said.