China’s textile manufacturers are shunting Australia to the bottom of the customer queue as they prioritise production for retail giants in the US and Europe as well as their own surging domestic market.
This will empty shelves and increase prices for Australian consumers after Christmas, The Australian says.
The stock shortage has worsened in the past fortnight as Chinese speculators hoard supplies of raw materials such as cotton, which has doubled in price over the past year.
Manchester brand Pillow Talk, which imports most of its stock from China, has revealed that long-term suppliers in the country have begun reneging on orders in the past week.
“It’s individual mills taking the view they will supply their largest customers first, and we’re way down in the pecking order,” general manager Neil Dellaca told The Australian on Sunday.
“It’s Chinese demand that’s driving it all, and we’re being severely penalised in the Australian market in terms of price and availability.”
Wholesaler Killarney Linen, which supplies manchester to David Jones, Harris Scarfe, hotel chains and hospitals, said Chinese factories are demanding price rises of up to 26 per cent on contracts signed months ago.
Killarney Linen’s owner, John Mutton, said delivery times are being extended from six weeks to six months.
“Getting supplies can be difficult because the big orders get serviced first. I think you’re going to see stock shortages in the near future,” he said.
Linen House — which wholesales Chinese-made manchester to major Australian retail chains including Myer, Kmart, Target and Big W — said the Chinese factories are demanding 10 per cent surcharges on existing orders, citing the stronger Australian dollar.
“If you don’t pay the going rate, they won’t accept the order,” said Linen House director John Huggins. “The mainstream domestic market in China is becoming wealthier and is taking a lot of the products that are available.”
OzTrail, a wholesaler of Chinese-made camping supplies, said the factories are cancelling longstanding orders and selling to the highest bidder, and predicted retail price rises of 20 per cent early next year.