Shandong's cotton prices continue to strengthen

According to recent statistics, by the end of July, the port of Shandong imported 739,000 tons of cotton, valued at $1.31 billion—marking a 65.1% increase in volume and a 130% rise in value compared to the same period last year. The average import price reached $1,776 per ton, surging by 39% year-on-year. This sharp upward trend in prices has placed significant pressure on downstream textile and apparel manufacturers, who are now facing rising production costs. Looking at the current situation, it seems unlikely that the supply-demand imbalance for cotton will be resolved this year. A survey revealed that in 2010, the cotton planting area in Shandong decreased by approximately 5%, while other major cotton-producing provinces also saw reductions in cultivated land. Combined with the sharp drop in cotton output in 2009, the overall supply remains constrained and is not expected to recover quickly. On the demand side, the textile industry has been gradually recovering from its downturn, showing strong growth momentum. In the first half of the year, domestic spinning volume increased by 16.9% year-on-year, reflecting a growing need for raw materials. As a result, the supply-demand gap has widened, pushing cotton prices higher and forcing many companies to consider raising the prices of finished garments. This could further fuel inflation expectations domestically and negatively impact the competitiveness of China's textile and apparel exports in global markets.