Possibly Raising Export Rebate Rate for Viscose Fiber     

A well-informed source said the export rebate rate for textiles could be increased by 2.0 percentage points to 13% and the export rebate rate for clothes will be increased by 4.0 percentage points to 15%.
    The export rebate rate for viscose fiber may also be increased from 5% today to 15%, pending competent departments in late July.
   Analysts say that due to the startup of viscose fiber expansions, raising export rebate rate can stimulate exports and ease pressure on the domestic oversupply.
   Some experts are however not optimistic about the effect of the possible policy. They say that the price drop of viscose fiber in Chinese market is mainly attributed to the oversupply caused by unduly expanding. The export rebate rate increase will be small momentum for price rise of viscose fiber. The price drop of viscose fiber has become a trend that can hardly be changed in near future.
   According to webtextiles.com, in the first five months of 2008 China had 151 viscose fiber producers each with annual sales of over RMB5.0 million. The industrial total production value was RMB18.971 billion, an increase of 30.81% over the same period of 2007. The main-business revenue was RMB17.277 billion, up 26.42% year-on-year. The total profit was RMB724 million, a drop of RMB586 million or 44.72% year-on-year. The export value of delivered goods was RMB1.459 billion, up 15.89% year-on-year.
   The viscose fiber sector was one of the sectors in the chemical fiber industry with a strongest profit-earning ability in 2007. The viscose fiber price hike in 2007 helped producers reap fat profits.
   After the price of viscose fiber touched the historical high of RMB22 200 per ton in November 2007, it started to go down. The price got to the bottom of RMB15 450 per ton in June 2008. Due to the price rise of raw materials, fuel and power, some viscose fiber producers increased the price of viscose fiber by RMB100 per ton, still being much lower than the price in 2007.
   Insiders forecast that the unstable prices of raw materials and the demand decline of downstream as well as depression of the textile sector may cause the slack viscose fiber market for almost half a year.
   Even if the price of viscose fiber tends to be stable and the export rebate rate for viscose fiber is really raised, the viscose fiber sector will still be in the oversupply and will see a declining trend.