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Insight | Time:Apr 17 2018 2:24PM
Factors affecting batik fabric export
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Batik fabric market remains bullish. Demand for batik fabric keeps large for African festival in Jun, so orders of many fabric plants can be generally scheduled to Jun. Especially in Shandong, orders of some large batik fabric plants can be scheduled to Oct. However, export profit is affected by rising dyeing cost and firm RMB appreciation. Considering acceptance in Africa, price of batik fabric will remain stable on the whole.

Cotton yarn used for batik fabric is mainly low-end ones. Export of batik fabric is affected by factors as follows besides cotton yarn price.

1. Dyeing fee
Dyeing fee was revised up by dyeing plants in many regions after Spring Festival holiday, and is predicted to keep rising. With stricter environmental regulation, dyeing plants will be shut down increasingly. Additional rise of labor and dye cost and dyeing fee hard to fall also make the upward dyeing fee inevitable.

2. Exchange rate
RMB appreciation has affected plants with export business. Some dyeing plants complain more and are reluctant to take orders from foreign market. Recovery of global economy and restructuring of China’s economy are favorable to RMB appreciation, but exchange rate may fluctuate in short run due to international situation.

3. Supply and demand
Many weavers have shifted to produce batik fabric on good sales. If the market participants surge and result in excessive supply, price of grey fabric will be compressed and profit shrink. 

4. Influence of international relations
China-Africa Cooperation Forum Beijing Summit will be held in Sep 2018 and more opportunities of cooperation and exchange will be seen between China and Africa. At that time, policies favorable to export of China’s products to Africa may be introduced. However, recent China-US trade war causes concerns about whether it will expand worldwide. With changes of international situation, China’s export will face more uncertainties.

In conclusion, export orders of batik fabric to Africa perform well. Affected by rising dyeing fee and exchange rate, the price stays firm and market players hold bullish anticipation to market outlook. However, amid rising dyeing fee buoyed by cost, risks brought by RMB exchange rate fluctuation and international environment, export trade will be affected inevitably, but given acceptance in African market, price of batik fabric has limited room to climb up. In addition, in terms of long-term supply and demand, weavers are suggested not to shift production rashly before profits calculation.
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