Global fibre industry sailing on volatility boat

10 Feb '10

9 min read

Volatility best describes today's fibre industry world over. On one hand natural fibres are striving hard to weather climate of scarcity in acreages, on other, man made fibres are jostling with high rising raw materials' prices. Issues related to policies and monetary constraints remains present challenges therein.

Reporting about the industry situation to News team at www.fibre2fashion.com, Mr Kalyan, General Manager, Evergreen Global -Singapore, said- “First half of last year was dominated by raw materials related issues. Their costs have increased a lot to the extent that some raw materials have witnessed 15 to 20 percent price rise. So, in this case fibre producers had no other choice but to increase their prices. Also in December, there was not much buying. Therefore, some kind of replenishment of stock was also going on. Month January was all right, but our outlook for the sales of fibres from producers point of view, would be on little bit the softer side for the end of February and begin of March. Within that span, raw material prices will start showing downward trend.”

Furnishing the reason behind this trend, Mr Kalyan explained-“Prices were high possibly because of Chinese people rushing to buy before beginning of their New Year. So, there may be chance of some kind of revision of the fibre prices. Next quarter is difficult to forecast. Generally, as second quarter is the period of renewed demand, when people start using their fibre to make yarn to sell to fabric producers, so as to cater usually the festive demand August onwards; that way we see sales increase May onwards.”

He also pointed up on peculiar trait that can be observed in current market. He told that it is very tough to draw a line between the demand and supply in present times. It is difficult for sales people to position their products; for sometimes all people rush to buy and sometimes all refrain. This volatile kind of demand and supply can be seen 2008 economic crisis onwards. Moreover, it happens actually because sellers of fabrics are also unable to assess the demand at their end, and thus are unable to stock their yarn well in advanced which in turn causes makers of yarns unable to produce their yarn well in advance. According to him, scene was different in 2006, 2007 and early 2008. It used to be three months to six months position for these people, but now it has become quite a bit port kind of business.

He also mentioned – “Industry is not free from crises yet though people are making regulations in trade trying to pull it out from crisis. It has not worked yet because end users i.e. fabric users and producers, are in very difficult time as they are not able to earn compared to what they used to. And in our expectations, at least from third quarter of the year, when people would be able to sell their yarn that they buy and fabrics that they make, we see period during August to September likely to bring revivals due to festive mood. Otherwise we may have to wait for a year or more to see complete recovery.”

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