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Chinese exporters cautious on raising prices
(Xinhua)
Updated: 2004-04-21 09:57

Though facing price hikes of raw materials and energy at home, Chinese exporters at the ongoing China (Guangzhou) Export Commodity Fair in southern Guangdong Province are cautious about raising the prices of their products in fear of scaring businessmen away.

Because of its long history and scale, the fair, currently the 95th of its kind, is cited as a "weatherglass" of China's export. On show at the fair are a broad range of products, including garments, textiles, food, household appliances and hardware. Buyers from more than 100 countries and regions come to buy products every year.

At the food exhibition hall, a meat-products exporter said that in the past half year, the price of pork has increased to 12,000 to 13,000 yuan from the previous 9,000 yuan per ton, but owing to fierce competition in the sector, their finished products are still kept at 2001's level, cutting profit to the minimum.

Textile corporations face the same problems. Chen Yan, a sales manager of the Fujian Tiancheng Textile Import and Export Corp Ltd, said that they couldn't raise the price of their garments with the cotton price hikes for the fear that buyers would not give them orders.

"Without brand names and high added value, China's corporations have no other way but to cut their own costs to increase export," said Cao Xinyu, vice president of the China Chamber of Commerce of Textile Import and Export. Cao said that a price war is inevitable in such a situation.

Some corporations have decided to raise prices of their products, but only by a small margin. An official from the Guangdong Textile Import and Export Co Ltd said the cost of their products rose by seven to eight percent in recent months, but the price of their products at the fair increased by only three percent.

Still, some exporters acknowledged that the fair is the first step for negotiation with potential buyers. If the price of raw materials keeps going up in the next few months, they would have to raise their prices accordingly.

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