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Article Designation: Scholarly JTATM 1
Volume 5, Issue 4, Fall
Global Dynamics Impacting Yarn Production and Consumption
Suvalee Tangboonritruthai, Ph.D. Student Nancy L. Cassill, Professor William Oxenham, Professor/Associate Dean for Academic Programs North Carolina State University, College of Textiles Raleigh, NC.
ABSTRACT
This paper will provide the overview of the factors likely to affect the competition in the global yarn market related to yarn production and consumption. This report examines research, trade literature and government statistical reports regarding the yarn production, exports and imports, movement of machinery, preferential trade agreements and yarn consumption. To conclude, the trends in yarn production and consumption in different regions will be identified. Ad ditionally, this study will provide the factors that should be considered for the yarn industry to stay competitive in this globally dynamic yarn market.
Keywords: Yarn Production, Yarn Consumption, Global Dynamics, Competitiveness, Imports and Exports
Introduction
Since the global yarn market has become competitive, domestic consolidation and regional adjustments are anticipated (Dockery, 2005). It is possible, from historical data, to examine the different factors that affect yarn production and consumption.
In a quota-free world, it is anticipated that relatively low-priced imported textile products will reduce the demand for domestic yarn (Gazanfer, 2005). As for the changes currently taking place in textile industry, the elimination of quota resulted in a flooding of Chinese imports last year. This year, additional adjustments will be required to deal with new 2006-2008 Chinese quotas, a possible upward revaluation of the undervalued Chinese yuan and all the new producer distribution-retail channels that are
being developed and refined (Reichard, 2006). Many strategies evolved to stay competitive in yarn market during the year
- James W. Chesnutt, CEO, National Spinning Co. Inc., New York City and Chairman, National Council of Textile Organizations (NCTO), Washington asserts that if U.S. textile industry is going to be successful, it must go through Congress. One of the most successful legislations passed by congress in recent years is to put 34 categories of textiles and apparel products from China under safeguards (Chesnutt, 2006).
Some of the United States spinners have provided an outlook for spinning industry in 2006 and beyond. They envision in short term, that the U.S. spinning industry will have the advantage to work with Central American vendors, especially with the passage of CAFTA-DR. However, the
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long-term outlook is tempered by uncertain business conditions and increasing imports (Dockery, 2006). As apparel production is moving to Central America, with the closing of US operations, spinning manufactures are moving in the same direction to become yarn suppliers and to gain a competitive advantage in speed-to-market strategy for US marketplace.
The key drivers determining the competitive advantage in producing textile and apparel items are many factors such as energy, interest rate, etc. According to Julian (2005), the key drivers are labor, capital/infrastructure, technology, and raw materials (Julian, 2005). Labor competitiveness is defined in terms of labor cost per unit of output or called unit labor cost (Culbertson & Hackett, 2005). Capital/ Infrastructure is the money available to build upon an existing base (Julian, 2005). Technology is the process of incorporating the best available expertise and equipment into the production. Raw materials are considered to be a key driver when there is a cost difference between competitors (Julian, 2005).
To understand global dynamics of yarn market we have to obtain a meaningful measurement for the consumption by
consumers in each country, the import and export trade of yarn must be evaluated. Knowing where and what are being consumed by whom, allows yarn production and future growth to be more understandable and predictable (Julian, 2005). Therefore, this report will particular emphasize yarn production and consumption, and the factors likely to affect the competition in the global yarn market.
Historical
Regionalizing production networks in the textile and apparel industry Several broad regional shifts have occurred in the global textile and apparel industry since the 1950’s (see Figure 1). The relocation of production is mostly dominant in the apparel industry. Some researchers think that the internationalization of apparel manufacturing began earlier and has extended further than that of any other industry. Textile and apparel firms have relocated their labor-intensive manufacturing operations from high wage regions to low-cost production regions in industrializing nations. Since the 1960’s, the industrializing countries of Asia and some countries of Latin America have achieved a healthy return from export-oriented production (Gereffi, 1999).
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(UNIDO), 2003). Furthermore, US apparel and home textile operations will continue to move offshore, to lower cost locations, due to further downward pressures on prices through trade liberalization and the need to be closer to major apparel manufacturing centers (Kilduff, 2005). However, domestic operations will continue in innovation to produce leading edge products, while the brain function of design, marketing, operations management and related functions will remain centered in the USA for the future (Kilduff, 2005).
Global Dynamics
Globalization is creating a growing level of interconnectedness and competition in the world economy, and geographical clustering of activity is an important way in which firms and localities deal with these pressures (Dicken, 2003). As a result, extraordinary changes are taking place in the
world of textiles. The six main drivers in textile industry today are as follows:
Labor costs The driving force of transition in the textile business is competitive advantage. One component of competitive advantage is labor; labor cost has driven the textile industry to sourcing products from developing countries. Similar to other industries, the hourly labor cost is one of the major factors that impact competitiveness. According to a Werner International (2005) newsletter, Switzerland has the highest hourly labor cost. Japan has dropped from the first place in 2000 to the third place in 2004 (see Figure 2). Several countries positions have changed, due to the changes in the exchange rate of the United Stated Dollar. When compared to those in 2003, there is not much change in the low labor wage countries of ranking: the lowest labor costs are noted in Asia, with Sri Lanka, Vietnam, and Pakistan.
27.77 27.
7.1 (^) 6. 3.8 (^) 2.88 2.86 2.83 (^) 2.19 (^) 1. 1.29 1.18 (^) 0.67 (^) 0.55 0.48 0.46 (^) 0.37 0. 0
Switzland
Japan Germany
Canada
USA
S. KoreaHongkongS. Arfica
Turkey Argentina
Brazil Mexico ColombiaThailandMalaysia
India
Indonesia
Chian Mainland
Sri LankaPakistanVietnam
$US
Figure 2****. Average cost per operator hour comparison in the primary textile industry ($US) in 2004, selected countries Source: Werner International. (2004). Primary Textiles Labor Cost Comparisons Winter 2004/. Reston, VA: Werner International, Infotext Division.
Note: Employee benefits are not included [U.S. Department of Labor. (2005)].
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In the spinning industry, the movement of U.S. yarn manufacturers to lower labor cost countries might not be the most economical solution (Dodd, 2000). However, since U.S. yarn producers still have to pay for the transportation costs, it may be better to have their production close to their customers. In order to make labor cost per unit more meaningful, we have to introduce labor productivity factor into the calculation of unit cost. Even then it can only give a limited view of the total competitiveness of the primary textile industry, since total competitiveness depends on other costs and other factors, such as raw material, energy, interest cost, inventory turn-over, throughout time, quality, and styling (OECD, 2004).
Tariffs and Regional Trade Agreements Since a lot of the textile industry is closely tied to apparel, the effect of lifting quotas has as much, or more, to do with the vulnerability of the U. S. textile industry as it does for apparel (Abernathy, Volpe, & Weil, 2005). After the elimination of quota in January 2005, some buyers shifted their sourcing from the cost effective region formerly limited by quotas. Although quota elimination may continue to drive production to Asia, the emergence and expansion of trading blocs, as well as the increasing trend of preferential trade agreements as political tools, will constrain the migration of production within the region (Singhal, 2004).
Although quota was ended under terms of the Agreement on Textile and Clothing (ATC) in 2005, tariffs established within the system of bilateral agreements will remain. Tariff agreements are the set of regional trade agreements that provide participants with full or partial relief from their partner’s standard tariff rates on certain products under certain conditions (Chiron, 2004). As the result, it gives the competitive advantage to particular suppliers with duty free benefits under the same agreement. In the United States, a key preferential trade agreement that has impacted spinning industry is the North American Free Trade
Agreement (NAFTA) signed in 1994. This agreement eliminated quotas and tariffs on duty-free benefits to apparel made from yarn originating between member countries: Mexico, Canada and United States (The Office of Textiles and Apparel (OTEXA), 2006). The second trade agreement was the Caribbean Basin Trade Partnership Act (CBPTA), enacted in 2000. According to the CBPTA agreement section 211(b)(2)(A), members (see Appendix A) receive the benefits of market access to the U.S with duty and quota free products, as long as products are constructed strictly from U.S. yarns and textiles (Abernathy, Volpe, & Weil, 2005). For example, eligible apparel articles can be assembled in one or more CBTPA beneficiary countries from fabrics wholly formed and cut in the United States, or from yarns wholly formed in the United States. Moreover, it includes the articles assembled with thread formed in the United States (OTEXA, 2006).
The third trade agreement, the Andean Trade Preferences Act (ATPA), effects in lower or eliminate duties on imports from Bolivia, Colombia, Ecuador and Peru. This agreement provides duty and quota free imports of apparel assembled from U.S. formed, dyed, printed and finished fabrics or fabric components, or knit-to-shape components from U.S. or regional yarns (OTEXA, 2006). The fourth agreement, the Central America-Dominican Republic-United States Free Trade Agreement (CAFTA-DR), which was signed on August 5, 2005, is designed to eliminate tariffs and trade barriers and expand regional opportunities for the workers, manufacturers, consumers, farmers, ranchers and service providers of all the countries (OTEXA, 2006). The agreement immediately eliminate tariffs on more than 80 percent of U.S. exports of consumer and industrial products, phasing out the rest over 10 years. Eighty percent of CAFTA-DR imports already enter the United States duty free under the Caribbean Basin Initiative (OTEXA, 2006). This agreement allows apparel produced in the five Central
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competitive in the face of the very low labor costs in developing countries (Dinsdale, 2004). Cost reduction is not the only benefit derived from the new technologies for developed countries to gain cost competitive over the low labor costs in developing countries, but timesaving as the result of the automated manufacturing, also provides greater benefits for the manufacturers to respond quickly to customer demand (Dicken, 2003).
Quality Quality has been defined as value (Abbott, 1955), conformance to specifications (Gilmore, 1974), fitness for use (Juran & Gryna, 1988), and meeting and/or exceeding customer’s expectations (Parasuraman, Zeithaml, & Berry, 1985). In the textile industry, the importance of quality cannot be overstated. For example, the combed cotton yarn in Canada represents high quality products that can compete over low labor cost products. The better quality of products and services on a consistent basis are needed for industry to compete internationally (Sabanci, 2005). With the competitiveness in low-wage countries, the differentiated products with high quality have made the Italian manufacturer an example of the major exceptions in competing for low-price products. In general, the Italian producers have pursued a strategy of product specialization. They have
focused on a fashion orientation with the aim of avoiding dependence upon these types of goods most strongly affected by low-cost competition.
Oil prices The rapid increase in oil prices is one of the keys driving the development of the global market, especially in production cost and consumer spending. With higher oil prices, the raw material prices will be a major issue in the spinning industry. If oil prices fail to decline to more substantial levels, it becomes less probable that world GDP growth will continue to be above 4% in 2005 and 2006, and both world textile fiber and cotton consumption will likely grow at lower rates (International Cotton Advisory Committee (ICAC), 2005).
Global Competition in Yarn Production
World Yarn Production The growth rate in cotton yarn production dramatically increased 25.9 % from 1995 to 2000 and still increased but at a lower rate (13.3%) in the last 5 years (2000-2005) (see Figure 3). World production of cotton yarn is moving toward certain global regions, especially the Asian region. During 1995- 2000, the growth rate of Asia & Oceania increased 20.1%, with a more significant increase of 35.2% during 2000-2005 (see Table 1).
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Table 1
World Production of Cotton Yarn by Regions (000 Metric Tons)
Growth Rate Growth Rate Share of the World
1995 2000 2005 1995-2000 2000-2005 2004
( 000 Metric Tons) ( % Change) ( % Change) ( % Share)
Regions North America 2,250.6 2,387.0 1,450.9 6.1 (39.2) 6. Central America 13.6 21.3 15.6 56.6 (26.8) 0. South America 903.8 986.3 920.0 9.1 (6.7) 4. Americas 3,168.0 3,394.6 2,386.4 7.2 (29.7) 10. Africa 563.0 421.8 398.3 (25.1) (5.6) 1. Europe 1,616.1 1,576.2 1,309.6 (2.5) (16.9) 5. Asia & Oceania(a)^ 10,561.9 12,680.1 17,149.8 20.1 35.2 75.
Europe, other ( Turkey) 369.2 1,040.0 1,106.2 181.7 6.4 4.
World 16,718.9 19,493.5 22,741.9 16.6 16.7 100.
% Share of Selected countries Asia & Oceania (b) China ( Mainland) 5,422.5 6,575.7 10,976.6 21.3 66.9 64. India 1,834.0 2,290.0 2,147.2 24.9 (6.2) 12. Pakistan 1,210.5 1,706.7 2,106.2 41.0 23.4 12.
% Share of Americas United States 2,012.4 1,906.2 1,052.2 (5.3) (44.8) 44.
(a) Asia & Oceania represents 19 countries; China, Hong Kong, Taiwan, Australia, Indonesia, Japan, Korea, Malaysia, Philippines, Thailand, Vietnam, Afghanistan, Bangladesh, India, Myanmar, Pakistan, Sri Lanka, Iran, Israel. (b) Three Asia countries represents 88.8% of the total share of Asia & Oceania.
Source: International Cotton Advisory Committee (ICAC). (2004). World Textile Demand. Washington, DC: Author.
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Asia/Oceania 75%
America, North 6%
Europe, other (Turkey) 5%
Other countries 2%
America ,South 4%
Africa 2% (^) Europe 6%
Figure 4. Production of cotton yarn by regions in 2005
Source: ICAC 2,3. (2004). World Textile Demand. Washington, DC: Author.
Figure 5. Top 5 countries in cotton yarn production in 2005 Source: International Cotton Advisory Committee (ICAC). (2004). World Textile Demand. Washington, DC: Author.
(^2) World Textile Demand (2004): Cotton yarn production data represented in this resource is the latest one that is available. Some data for years before 2001, as well as 2002-2005 data for most countries are estimated using previous year fiber consumption to yarn production. (^3) Countries including in Regional segmentation are Asia & Oceania : China, Hong Kong, Taiwan, Australia, Indonesia, Japan, Korea, Malaysia, Philippines, Thailand, Vietnam, Afghanistan, Bangladesh, India, Myanmar, Pakistan, Sri Lanka, Iran, Israel. North America; Canada, Cuba, Dom Rep, Mexico, United Stated. South America; Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Paraguay, Peru. Central America; El Salvador, Guatemala, Honduras, Nicaragua. Europe; Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands,
Thousand Metric Tons
China( Mainland) India Pakistan United States Turkey
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Costs in international cost comparisons Yarn costs need to been analyzed to see the difference in international cost comparisons. According to international production cost comparison report from ITMF (2003), each country represented in the data represents the almost same amount on some components such as waste, and power cost. The difference among countries was capital (depreciation & interest) and labor costs. Comparing the total yarn costs from different countries (see Figure 13), the ring spun yarn cost indexes shows that Italy is the only country in here that had the
higher cost than that in U.S., and other countries had the cheaper yarn costs in ring spun yarns. The only factor is the labor cost in Italy is higher than that in U.S. While in rotor spinning Turkey, Korea, Italy and China had higher rotor spun yarn costs. India ring spun yarn cost is cheaper than that in U.S., because US had lower raw material cost and power cost. Therefore, labor cost is not the main factor in yarn costs. It is more important to include other factors, which influence yarn costs, especially capital and power cost.
Brazil China India Italy Korea Turkey
US= 100
Cost Index of Rotor Yarn Cost Index of Ring Yarn
Figure 13. Cost inde x for ring and rotor spun yarn compared to the U.S. yarn cost in 2003 Source: ITMF. (2003), International Production Cost Comparison. Zurich, Switzerland: International Textile Manufacturers Federation.
Import and Exports For the U.S. yarn market, it is interesting to address the yarn trade balance, which represents the U.S position in the yarn market. Figure 6 shows that the U.S. had negative yarn trade balances with NAFTA, which includes Mexico (-4 million dollars in
- and Canada (-82 million dollars, - million dollars in 2003 and 2004, respectively). The U.S. had positive yarn trade balances with Caribbean Basis
Initiative (CBI) countries of 560 million dollars in 2004. It appears that the CBI region will maintain a positive position for the future, according to the benefits of recent preferential trade agreements, including CAFTA-DR. Most of the imports of textile and apparel from Central America and the Dominican Republic have already gained access to the U.S. market under the Caribbean Basin Trade Partnership Act (CBTPA).
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Table 2
Top 10 U.S. Cotton Yarn Import Countries in 2004
Source: The Office of Textiles and Apparel (n.d.), U.S. Department of Commerce (http://www.otexa.ita.doc.gov/scripts/tqads1.exe/catpage, 2006)
Pakistan seems likely to continue as a supplier to the U. S market, and is considered by many U.S. firms as a competitive alternative to China. The key competitive factors for Pakistan are inexpensive labor supply, access to local supplies of raw cotton, and government support (The Office of the United States Trade Representative, 2002). Pakistan’s spinners benefited from a rebound in their sales to the United States. Taking advantage of its quota-free access to the US market, US imports of Pakistan’s cotton yarns were up 27% in unit terms over the period after falling in 2003. Moreover, the 2004-05 trade policy in Pakistan offers a wide range of incentives to help exporters meet the challenges of a WTO global trade. In this regard, notable is the elimination of sales tax on ginned cotton to reduce costs for the spinning sector, setting up of garment cities and removal of the ban on the import of cotton waste (Mazhar & Baqai, 2004).
During 2000-2004, cotton yarn imports from NAFTA (Canada and Mexico) show an overall increase with a combined share of 34% of the total U.S. import market (see Table 2). While cotton yarn imports from Mexico slightly dropped by 6% to 22 million kilograms, Canada imports significantly increased 62% to 23 million kilograms.
Canada, the United States' other NAFTA partner, remained in second position in 2004. This low value is reflected in Canada’s combed cotton yarns, compared with other suppliers. The average value (unit value = US$/kilogram) of combed cotton yarns from Canada only was US$2.91 over the period, compared with US$3.33 for yarns from Pakistan and US$3.30 for yarns from Indonesia in 2004 (EmergingTextiles, 2004).
Rank Rank Growth Rate Share of the World
(in 2000) (in 2004) 2000 2004 2000-2004 2004 (Kilograms) ( Kilograms) ( % Change) ( % Share) 1 1 Pakistan 35,106,189 44,442,938 27 32. 3 2 Canada 14,779,584 23,975,783 62 17. 2 3 Mexico 23,490,930 22,120,683 (6) 16. 6 4 Brazil 6,254,130 8,312,142 33 6. 8 5 Indonesia 4,966,624 7,606,871 53 5. 5 6 Egypt 6,520,523 3,955,729 (39) 2. 10 7 Malaysia 4,059,057 3,651,674 (10) 2. 12 8 Thailand 2,770,420 3,162,305 14 2. 27 9 Korea,South 621,811 2,820,060 354 2.
14 10 China 2,056,952 2,420,598 18 1.
World 136,973,870 135,670,557 (1) 100.
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Unites States’ imports of cotton yarns from Brazil and Indonesia also surged over the same period. If the Brazilian quota in categories 300/301 is far from being filled, the fill rate of Indonesian limit already reaches 70.40% in the same category 300/301 (carded and combed cotton yarns) (EmergingTextiles, 2004). Shipments from Indonesia were up 53% in the cotton yarn market while those from Brazil were up 33% on the cotton yarn market.
According to Table 3, there was a dramatic change during 2000-2004 in the U.S. exports of cotton yarn to NAFTA, with Canada and Mexico decreasing 69% and 42% respectively. However, the amount of export of cotton yarn from U.S. to the
Caribbean Basin Initiative (CBI) group increased with the significant growth rate in Honduras (1025%), Guatemala (507%), El Salvador (117%), Dominican Republic ( %), and Costa Rica (48%). In addition, there was growth rate to selected counties in South America, such as Columbia (845%) and Peru (287%). The increased number of exports of cotton yarn to the CBI region was due to the passage of CBPTA, which extended duty-free and quota-free benefits for apparel products assembled in the Caribbean that use fabrics manufactured in the U.S. from U.S. yarn (U.S. Newswire, 2000). Furthermore, the increased number of exports of cotton yarn to Columbia and Peru were due to the passage of the Andean Trade Preferences Act (ATPA).
Table 3
Top 10 U. S. Exports of Cotton Yarn to Various Countries in 2004, Kilograms basis
Rank Rank Growth Rate Share of the World
(in 2000) (in 2004) 2000 2004 2000-2004 2004
(Kilograms) ( Kilograms) ( % Change) (% Share)
3 1 Honduras 12,152,802 136,658,604 1,025 66. 1 2 Canada 53,033,914 16,566,180 (69) 8. 6 3 Guatemala 2,522,855 15,317,020 507 7. 2 4 Mexico 23,351,772 13,507,842 (42) 6. 4 5 El Salvador 4,956,300 10,738,223 117 5. 7 6 Dominican Republic 1,348,949 2,927,392 117 1. 8 7 Costa Rica 1,713,952 2,534,181 48 1. 14 8 Colombia 249,993 2,363,519 845 1. 5 9 Venezuela 3,111,526 1,657,080 (47) 0. 12 10 Peru 209,970 811,886 287 0.
World 105,285,290 206,186,218 96 100.
Source: Office of Textiles and Apparel (n.d.), U.S. Department of Commerce (http://www.otexa.ita.doc.gov/scripts/tqexp_ads.exe , 2006) (Includes 10-digit HS codes 5205 - 5207)
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years, involving a drastic elimination of obsolete spindles and re-equipment with new ones (Comité International de la
Rayonne et des Fibres Synthétiques (CIRFS), 2001).
Table 4
Shipments of Short Staple Spindles by Regions, 2003 and 2004
Source: ITMF, International Textile Machinery Shipment: 2003-2004[Data file]. Zurich, Switzerland: International Textile Manufacturers Federation.
China and India were the major countries investing in short staple spinning. For the ten-year period (1995-2004), China was the biggest investor, taking almost 29% of world purchases. India accounted for 25% of the total (Anson & Brocklehurt, 2005).
Comparison shipments of short staple spinning and weaving machinery to different regions, 1995-
The shipment of short staple spinning machinery moved following the shipment of weaving machinery during the last ten–year period (1995-2005), but these
movements showed a time lag in shipments (see Figure 8 and Figure 9). According to analysis by region, the shipments of spinning and weaving machinery to Asia & Oceania were increasing, while those to North America were decreasing. This has implications for sourcing of material since one key to diversity of manufacture is the availability of variety of raw material close to the spindle point and then yarn production close to fabric forming units. It is advantageous for the weaving manufacturers not to have the cost burden of transporting yarn long distances (Dinsdale, 2004).
Rank Continent ( Destination) Growth Rate Share of the world
(in 2004) 2003 2004 2003-2004 2003 2004
( Spindles) ( Spindles) ( % Change) (% Share) (% Share)
1 Asia & Oceania 7,187,796 7,502,424 4.4 88.1 91.
3 Europe, Other( Turkey) 595,392 448,008 (24.8) 7.3 5.
4 Africa 139,824 94,644 (32.3) 1.7 1.
2 America, South 65,520 55,700 (15.0) 0.8 0.
5 Europe, West 137,956 40,608 (70.6) 1.7 0.
6 America, North 7,056 25,260 258.0 0.1 0.
World 8,157,600 8,173,600 0.2 100 100
Shipment
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Weaving (Thousands)
YEAR
Spinning (Thousands)
Weaving Spinning
Figure 8. Shipment of short staple spinning and weaving machinery to Asia & Oceania Source: ITMF. (2004), International Textile Machinery Shipment: 1995-2004[Data file]. Zurich, Switzerland: International Textile Manufacturers Federation.
The shipments of short staples spinning to North America in 2000 showed exception data (see Figure 9). In 1999, the overall of shipments of short staple spindles to North America dramatically increased, while the weaving shipments have decreased since 1997. These causes can be the lag time of data reported to ITMF, or this may be the increased number of countries that participated in this report. According to the World Textile and Apparel Trade and Production Trends (2005) report, these changes might be due to ITMF’s survey data
that covers most of the world's deliveries of textile machinery, based on data supplied by some 120 manufacturers of spinning, draw texturing, weaving, and knitting machinery. These manufacturers represent almost all of the world’s output. Coverage was expanded significantly in 2000 by incorporating data from more than 25 Manufacturers in China applying China market and the international market. Delivery data for 2000-2004 is therefore not strictly comparable for the previous year (Anson & Brocklehurt, 2005).
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Figure 10****. U.S. consumption of cotton by major end uses, 1995- Source: National Cotton Council of America (2005). Cotton Counts Its Customers. (http://www.cotton.org, 2005)
Fiber Consumption World fiber usage is expected to increase from 53 million tons in 2000 to 74 million tons in 2010, and 95 million tons by
- Cotton is still the fiber choice for much of the apparel market, notably in next to skin applications. For example, in the USA cotton has a 60% share of the apparel market (Dinsdale, 2004).
Cotton is still the dominant fiber used in the manufacture of the short staple system. While Asia and Oceania accounted for 72% of the 33.6 million metric tons of cotton consumed by the short staple system in 2004, other regions represented the rest; North America 9%, Africa 3%, Europe 11%, and South America 6 % (see Figure 12).
However, in the long-term outlook, the data for the period between 1999-2003 shows that cotton has gradually been losing market share to synthetic fiber (see Figure 11).
Conclusion and Future Prospects
The yarn market will continue to grow and become more competitive in the global marketplace making it more challenging for producers to devise effective production, distribution, and market strategies to deal with the myriad of changes. Yarn producers need also to be able to detect the changes in trends of yarn production and consumption in the new marketplace.
0
10
20
30
40
50
60
70
80
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Percentage
Apparel Home Furnishing Industrial Uses
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Figure 11****. World consumption of raw materials in the short staple system by main fiber types, 1999- Source: ITMF. (2004), International Textile Machinery Shipment: 1995-2004[Data file]. Zurich, Switzerland: International Textile Manufacturers Federation.
Figure 12****. Regional distribution of world cotton consumption in the short staple system, in 2004. Source: ITMF. (2004), International Textile Machinery Shipment: 1995-2004[Data file]. Zurich, Switzerland: International Textile Manufacturers Federation.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1999 2000 2001 2002 2003 2004
Percentage
Raw cotton Cellulosic Fibres Synthetic Fibres
Asia & Oceania 72%
Europe, West 3%
Europe, Others 6%
Europe , East 2% America, South 6%
America, North 9%
Africa, 3%
Africa America, North America, South Asia & Oceania Europe , East Europe, West Europe, Others
