Yiwu Shortage of Raw materials driving prices up

Shipping container loading facility, Xi'an, Shaanxi, China

A lack of raw materials is causing factories to raise their manufacturing costs, and once items are on their way, shipping snarls are delaying their arrival on Western store shelves. Yiwu has also been impacted by China’s chronic electricity shortage, which has caused factories to look for generators or halt production altogether since the middle of last month.  For Yiwu’s manufacturers, this was meant to be a resurgence holiday. Last year, business was halved as the epidemic wreaked havoc on the global transportation industry, with big customers canceling orders. In March, things appeared to be ramping up as retailers rushed to place orders earlier than usual to ensure they were well-prepared for the next season after using up back inventory to get through Christmas last year. Instead, surging commodity prices exacerbated manufacturers’ problems, contributing to China’s sharpest factory-gate inflation in 26 years in September. Unfortunately consumers will ultimately bear the costs.

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