Record Cotton Prices May Curb China Textile Growth, Planer Says

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Record gains in prices of cotton and rising labor rates may limit the expansion of China’s textile industry and reduce export competitiveness, according to the National Development & Reform Commission.

In 2010, prices surged to 30,000 yuan ($4,551) per metric ton from 14,000 yuan at the beginning of the year, while labor costs gained as much as 20 percent, the top economic planner said in a report on its website yesterday.

“Raw material and labor shortages are the industry’s bottleneck,” the report said.

A slower rate of recovery of the global economy and world consumer demand, as well as a stronger yuan, will reduce the competitiveness of China’s textile products, the report said.

In 2010, domestic sales took a larger share of the nation’s textile products, the report said. For companies with relatively large output, local sales represented 82 percent of the total, up 2 percentage points from 2008, the report said.

China’s textile mills increased yarn output 14 percent to 27 million tons in 2010 from a year earlier, the report said.

(Source: http://www.bloomberg.com/news/2011-01-31/record-cotton-prices-may-curb-china-textile-growth-planer-says.html)

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