Shandong's cotton prices continue to strengthen

According to recent statistics, as of the end of July, the port of Shandong imported 739,000 tons of cotton, valued at $1.31 billion, representing 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, up by 39% year-on-year. This sharp increase in import prices has put significant pressure on downstream textile and apparel manufacturers, who are now facing rising production costs. Looking at the current market situation, it seems unlikely that the supply and demand dynamics for cotton will change significantly this year. A survey indicates that in 2010, the cotton planting area in Shandong decreased by approximately 5%, with similar reductions reported in other major cotton-producing provinces. Combined with the substantial drop in cotton output in 2009, the overall supply remains constrained and cannot be quickly replenished. On the demand side, the textile industry is showing signs of recovery. After a prolonged downturn, the sector has begun to grow steadily. In the first half of the year, spinning volumes in the domestic textile industry increased by 16.9% year-on-year. As a result, the demand for cotton is rising, further widening the gap between supply and demand. This imbalance has led to continued upward pressure on cotton prices, which are being passed down the supply chain. Many textile companies have started to raise the prices of finished garments, contributing to heightened inflation expectations within the country. Additionally, the rising costs could negatively impact the competitiveness of Chinese textile and apparel exports in international markets. With these factors in play, the industry is likely to face more challenges in the coming months.