Home / Knowledge / News / Textiles / China's policy to influence 2013 cotton outlook - NCC
China's policy to influence 2013 cotton outlook - NCC
11
Feb '13
National Cotton Council economists say cotton’s 2013 outlook will be influenced by China’s policy decisions and continued competition from man-made fiber (MMF).

Dr. Gary Adams, the NCC’s vice president Economics & Policy Analysis, told delegates at the NCC’s 75th Annual Meeting in Memphis that, recent data on fiber market share clearly demonstrates the many challenges in terms of competition from MMF that the cotton industry faces in 2013.

According to Adams, “Measured on the basis of pounds of cotton fiber, the 2012 U.S. retail cotton market fell to the lowest level since 1996, amid a 4th consecutive year of declining market share.” Calendar 2012 retail cotton consumption is estimated to be the equivalent of 17.0 million bales of fiber.

In part, the loss in market share is the result of cotton prices that have been uncompetitive with polyester. As raw fiber prices have moderated in recent months, cotton textile products also have become more competitive with manmade fiber products. Assuming these relative prices continue at levels comparable to current values, market share is projected to stabilize, leading to a modest growth in cotton net domestic consumption for 2013.

“However, cotton is unlikely to reclaim market share unless cotton prices trade at levels below polyester,” Adams said.

The NCC sees 2013 world mill use of 108.7 million bales, an increase of 2.5 percent from 2012.  More specifically, international mill demand outside of China is estimated to increase by 5.7 percent for the 2013 crop year, with more than half of the growth being accounted for by India and Pakistan.

“This demonstrates that a shift is underway in terms of where cotton is spun into yarn,” Adams said.

Continued growth in mill use is being supported by the relatively stable price pattern of recent months, more competitive prices when compared to polyester, and more favorable spreads between yarn values and fiber prices.

China’s current policy is another factor lending support to mill use in other countries. By purchasing their domestic production at prices 40 to 50 cents above world prices, China is insuring that their internal prices are well above world prices, and causing their cotton spinning to be uncompetitive.

For China, differentials between yarn values and fiber prices are only one-third of those in India and Pakistan. Fabric manufacturers in China are increasingly looking to fill their yarn demand with imported product.

China’s current policy, while supporting prices received by farmers, acts as a tax on textile mills and has furthered the shift to manmade fiber. Over the 2009 through 2012 marketing years, mill use in China declined by almost 15 million bales. Over that same period, China’s use of man-made fiber grew by 40 million bales, dropping cotton’s market share from 30 percent to 19 percent.

Continuing to operate the program in a manner similar to the past year will maintain pressure on China’s cotton spinning mills. As a result, China’s mill use for the 2013 marketing year is expected to decline further, falling to 34.3 million bales.

Must ReadView All

Apparel/Garments | On 18th Jan 2017

Government considering 100% FDI in single brand retail

The Government of India is looking at allowing 100 per cent foreign...

Courtesy: Walmart

Apparel/Garments | On 18th Jan 2017

Walmart to create 34,000 new jobs in the US

The world’s biggest retailer and also the biggest US private sector...

Courtesy: UN Department of Public Information

Textiles | On 18th Jan 2017

World economy expanded by just 2.2% in 2016: UN

The world economy expanded by just 2.2 per cent in 2016, the slowest...

Interviews View All

Jim Desai
Blaiva Fabricaa

Fashion industry likely to remain labour-intensive in coming years

Dinaz Madhukar
DLF Emporio and DLF Promenade

‘Each event and promotion is planned out keeping in mind the business of...

Priyanka
Studio Priyanka Rajiv

‘To reinvent the age-old tradition of embroidery to suit demographics and...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
January 2017

January 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search