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MAIN REASON OF INCREASING FABRIC COST
1/ COTTON FIBER PRICE:
The reason for the increase in yarn prices is that the world's last cotton crop produced a low yield, and world cotton inventories also decreased. It is expected that the world's cotton consumption this year exceeds the amount of cotton that can be harvested by 1 million tons. supply shortage becomes serious.
Cotton is a highly speculative commodity, so prices fluctuate frequently. It is difficult for investors to give an accurate short-term trend. But in the long term, the expectation of an economic recovery after the expanded Covid-19 vaccine will be a factor supporting cotton prices to maintain above $ 2.2 / kg for the last months of 2021.
2/ SHIPPING FREIGHT
The Covid-19 pandemic, coupled with an uneven global economic recovery, has fueled container shortages in Asia, although other regions have also been hit hard. Observers said that companies have been waiting for weeks in a row and are willing to pay higher costs to have export containers, thereby pushing up sea freight prices.
There are about 180 million containers in the world right now, but "they're in the wrong place," Yeager said. “So what's happening is that China's increased exports are exacerbating the container shortage. In fact, for every 3 containers that go to other countries, only 1 is shipped into China.”
3/ PRODUCTION COST
In the context of dealing with the covid-19 pandemic, Vietnam has applied many measures such as directives 16, 3T, 1 road and 2 locations, contributing to high costs for businesses.
A decrease in production capacity of 30% also affects the factory's marginal cost.
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