CHINESE RAW SILK - REGAINING ITS GLORY
THE FIRST HALF OF 2007 HAS GONE AND THINGS HAVE STARTED LOOKING BETTER FOR CHINESE RAW SILK. THE RECENT LOW LEVELS OF RAW SILK IN THE PAST FEW MONTHS HAS SPURNED THE DEMAND IN INDIA AND WITH THE SEASON COMING UP INDIAN DEMAND SHOULD REMAIN STEADY AND ROBUST FOR RAW SILK.
THERE ARE SOME INTERESTING FACTORS NOW AND WE HAVE TO SEE HOW THE MARKET ADAPTS TO IT. THE JIAXING FUTURES HAS BECOME THE BASE LINE REFERENCE SITE FOR ALL INTERNATIONAL SILK YARN BUSINESS. SOME ENCOURAGING FACTS FOR THE COMING DEMAND OF RAW SILK IS AS FOLLOWS:
1) THE CHINESE CROP IS MORE OR LESS EQUAL TO LAST YEAR
2) GOOD FABRIC DEMAND FROM INDIA MEANS GOOD DEMAND IN CHINA LOCALLY FOR RAW SILK
3) INCREASE IN MANUFACTURING BASE IN INDIA MEANS GREATER CONSUMPTION FOR CHINESE RAW SILK THIS SEASON.
4) SHORTAGE OF INDIAN YARN DUE TO WEATHER CONDITIONS HERE TILL SEPTEMBER TO CONTRIBUTE TO THE EXISTING DEMAND FOR CHINESE RAW SILK
5) SHORTAGE OF EXPORT LICENSE IN CHINA FOR RAW SILK
6) HIGHER DOMESTIC DEMAND FOR SILK IN INDIA COMPARED TO LAST YEAR
THE ABOVE FACTORS HAVE BEEN THE REASON FOR RAW SILK GOING UP SLOWLY AND STEADILY AND IT IS CLEAR THAT THE DEMAND WILL CONTINUE FROM INDIA.
THE AVERAGE CONSUMPTION FOR CHINESE RAW SILK IN INDIA HAS CROSSED 6 TONNES PER DAY AND THIS IS MAINLY THE DOMESTIC DEMAND , THE INDIAN EXPORT ORDERS ARE STILL VERY FEW AND NEGLIGIBLE . ONCE THAT DEMAND STARTS THEN WE HAVE A SITUATION OF CONSUMPTION CROSSING 9 TONNES PER DAY EASILY AND THAT MEANS “ RAW SILK WILL BE THE KING AGAIN “
DUPION :
THE SCENE IN DUPION IS VERY STRANGE NOW, WITH CHINESE DUPION FACTORIES UNABLE TO PRODUCE TO ITS FULL CAPACITY DUE TO SHORTAGE OF WORKERS, IT HOWEVER MATCHES WITH THE LOW DEMAND FROM INDIA DUE TO VERY FEW EXPORT ORDERS FOR DUPION FABRICS .BUT IS IT THE SILENCE BEFORE THE THUNDER? THE MOMENT INDIAN EXPORT ORDERS STARTS FOR DUPION FABRICS , THE CHINESE DUPION PRODUCERS WILL BE UNABLE TO MEET THE DEMAND RESULTING IN A DRAMATIC PRICE INCREASE , THERE IS A POSSIBILITY THAT DUPION MAY SELL ABOVE RAW SILK , BUT IT FINALLY DEPENDS ON THE INDIAN DEMAND . WE CAN ONLY WAIT AND WATCH.
FABRICS :
SILK FABRICS HAS BEEN THE SURPRISING PACKAGES THIS SEASON, THE SUDDEN UPTREND HAS CAUGHT MANY BUYERS BY SURPRISE AND DEMAND SEEMS UNENDING. WITH VERY LITTLE STOCK IN INDIA FABRIC BUYING STARTED FROM MAY SECOND WEEK AND IS CONTINUING FULL STEAM. MANY IMPORTERS HAVE STILL BEEN UNABLE TO BUY DUE TO THE SHORTAGE OF SUPPLIES OF GOOD QUALITY BRANDS FROM CHINA. THE DECREASED OUTPUT IN CHINA HAS HELPED THE FABRIC REMAIN STRONG AND WILL CONTINUE PARTICULARLY FOR 12101.
THERE IS NO DOUBT THAT SILK FABRICS WILL LEAD THE DEMAND THIS SEASON AND QUESTION IS WHETHER CHINA CAN MEET THIS DEMAND. WITH THE SILK FACTORIES FACING THE SAME WORKERS PROBLEM AS IN DUPION I FEEL FABRIC PRICES WILL STILL GO UP FURTHER IRRESPECTIVE OF THE SILK YARN PRICE AS THE INDIAN SEASON HAS NOT YET STARTED FOR FABRICS, THE COMING WEEKS AFTER THE RAINS IN INDIA SETTLES DOWN WILL UNLEASH THIS DEMAND TOTALLY AND WE CAN SEE SOME INTERESTING MOVEMENTS IN FABRICS.
