ITMF Report Shows Year-on-Year Growth for Yarn Output
As the dominant country in the production of both cotton and yarn, China’s upward or downward trends usually pull the global market in the same direction. However, global yarn production output was up in the first quarter of 2012 despite lower output in China (largely due to celebration of the Chinese New Year).
August 29, 2012
As the dominant country both in the production of both cotton and yarn, China’s upward or downward trends usually pull the global market in the same direction. However, global yarn production output was up in the first quarter of 2012 despite lower output in China (largely due to celebration of the Chinese New Year). China’s Q1 yarn production is traditionally the lowest total of the year as a result of a reduction in working days due to the holiday.
According to the just-released State of the Trade report from the International Textile Manufacturers Federation (ITMF), world yarn output in Q1 dropped 7.7% from the previous quarter, primarily due to a 9% drop in production in Asia -- led by China’s 11.3% decrease.
“The STR 1Q/2012 shows that global yarn production continues its upward trend (year-on-year) while global fabric production was reduced. Destocking of yarn and fabric inventories underline the current uncertainty,” Dr. Christian Schindler, ITMF director general, told Cotton International.
In Japan, Taiwan/China and Pakistan, production decreased 10.4%, 3.0% and 1.3%, respectively. In Europe, South and North America yarn production increased in the first quarter by 0.7%, 10.7% and 19.6%, respectively. Year-on-year global yarn production rose 12.0% with output up in Europe (2.1%), South America (10.4%), and Asia (13.0%) but down 8.6% in North America.
However, this is not a surprise based on the current state of the global economy, small recession in the Euro-area and a less-than-expected growth rate in the U.S. and lower growth rates in China and India, Dr.Schindler said.
Global yarn inventories fell 1.7% in the first quarter of 2012 compared to the previous one with all regions reducing yarn inventories: Europe by 0.6%, South America by 2.5% and Asia by 5.4%. On an annual basis, global yarn stocks dropped significantly –10.1%, a consequence of an 18.6% drop in stocks in Asia and despite higher stocks in Europe South America.
In addition, global fabric production in the first quarter of 2012 fell in comparison to the previous as well as last year’s quarter. In all regions, a reduction could be observed with the exception of South America.
Fabric stocks fell slightly compared to the 4th quarter 2011, but year-on-year they increased as a result of higher inventory in South and North America, despite lower stock levels in Europe and Asia.
Compared with the previous quarter, global fabric production dropped by 11.9% in Q1/2012 as a consequence of lower output in Asia (14.2%), especially China (20.2%) also due to the Chinese New Year. In comparison to the first quarter of 2011, world fabric production was down 1.8% with all regions reporting decreases.
Global fabric stocks decreased.4% due to lower inventories in Europe and North America. Inventories in Asia and South America remained unchanged. Year-on-year, global fabric inventories jumped 14.0%. This can be attributed to soaring fabric stocks in South America, which was up 92.1% and higher stocks in North America of 6.7%. Europe and Asia recorded lower fabric stocks.
“Nevertheless, both global yarn and fabric production are expected to increase in the following quarters according to our estimates and if the global economic conditions do not deteriorate but stabilize with global demand picking up again in the second half of 2012 and in the first half of 2013, global yarn and fabric production should continue to increase,” Dr. Schindler said.
The estimates for global yarn and fabric production in the 2nd quarter compared to the 1st quarter of 2012 are positive. As far as yarn production is concerned, Asia is expecting an increase in output while Europe, North and South America estimates are unchanged. Global fabric production is expected to expand in in the quarter of 2012 as a result of higher output in all regions. The outlook for quarter three 2012 also remains positive both for global yarn and fabric production. Regionally, only in Europe fabric production is expected to fall further.
Source: ITMF, Edited by Stefanie A. Toth, Online Editor