Exporters being hit by rising commodity prices

As export demand is starting to pick up, manufacturers in Guangdong's Pearl River Delta are being hit by higher commodity prices, the South China Morning Post reported. Yarn prices have risen 20% and crude oil rose 8.7% to US$77 a barrel last month. The rising prices are causing Chinese exporters to renegotiate contracts and could hurt China's economic recovery, despite the fact that some of the costs are being absorbed by increases in export revenue, driven by a rise in orders from Europe. European importers are once again placing orders to take advantage of the strong value of the Euro against the renminbi.