SINGAPORE: China is unlikely to hike its duty on yarn imports, because the country's commitments under the WTO and bilateral agreements make it tough to do so, an industry official said on Thursday.
China's aggressive cotton stockpiling policy has pushed up domestic prices, forcing the world's largest textile industry to boost imports of yarn by as much as a third in 2013, while production moves to southeast Asia, drawn by lower costs.
"According to my understanding it is impossible to increase duties because WTO regulations don't allow us to do so," Robert Yang, an official of industry body the China National Textile Apparel Council, told Reuters at a conference in Singapore.
Chinese textile mills are turning to neighbours such as India and Pakistan to buy cotton yarn. Yarn imports, unlike raw cotton, are free of Beijing's tough quota limits and cost about 2,000 yuan ($160) less per tonne than at home, traders have said.
Textile mills use yarn from India and Pakistan for low-grade products such as towels, T-shirts, jeans, stockings and underwear. Many of the mills are small, and compete fiercely to cut raw material costs.
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