Averaged prices of cotton yarns declined between 300 and 500 yuan (4 to 6 US cents per kilo) in the past week in China, after already sliding down in the previous weeks. .
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On Quiangqing market, average price of carded 21S fell from 22,500 yuan at the start of November down to 21,600 yuan by early December. .
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This is not a dramatic decline but an acceleration in price decrease was reported in the past week, however. .
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Yarn processors are clearly waiting for the end of the fall in prices before returning to the markets.Demand for cotton yarns was once more very low in the past week in China. .
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On the Southwest market, average price of carded 32S fell from 23,000 yuan per ton (US$2.78 per kilo) down to 22,500 yuan per ton (US$2.72 per kilo). .
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After cotton prices surged in October, cotton spinners dramatically raised their prices with their margins improving at the same time. .
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Price difference between cotton and cotton yarns is now declining, down from 83 US cents per kilo on October 20th to 66 cents per kilo on December 8th. .
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Prices of 100% cotton fabrics also declined in China in the past week. .
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Yarn makers are apparently confronted with losses while demand is usually low in the winter season. .
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A large series of spinning units could be placed in receivership in the short term since privately-held companies would now account for 85% of China cotton textile industry, against 17% in 1997. .
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Only 70% of weaving capacities would be operational after production was reduced in the past weeks.In Pakistan, the recent surge in yarn prices also resulted in lower production of cotton yarns and fabrics. .
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The cotton crisis is increasingly looming in Faisalabad, at the heart of Pakistan cotton textile industry. .
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While small units remained closed with unemployed workers waiting for a rebound, larger companies announced an expected reduction in profits. .
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In addition, domestic prices of cotton lint did not decline after New York futures fell in the past two weeks. Prices remained above the high level of 3,000 rupees per maund. .
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Prices of cotton yarns further rose 10 to 15 rupees per bundle (4 to 6 US cents per kilo) in the past week, according to local sources. .
Date:12/11/2003
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