Yarn spinning is rapidly expanding in South and Southeast Asia and is expected to continue on the same lines in near future, according to the latest report on ‘Cotton: World Market and Trends’ released by the US department of agriculture.
Owing to growth in India, Indonesia, Bangladesh and Vietnam, yarn spinning in South and Southeast Asia overtook Chinese yarn spinning in 2011-12, and it has been rising ever since. During the same time, yarn spinning has remained roughly flat in the rest of the world.
The rise of yarn spinning industry in South and Southeast Asia was in part due to the confluence of high internal prices for cotton in China, and China’s uniquely dominant position in yarn spinning over the last decade, says the USDA report.
China’s consumption of cotton increased from around 20 to 25 per cent of the world total during 1960 to 2000 to 40 per cent of global consumption in 2000 to 2010. With nearly two-fifths of consumption, any policy change in China was likely to impact globally.
When China started stock accumulation and price support policies, domestic cotton prices in China went up and remained above global averages. This pushed yarn spinning into other nearby markets.
Yarn spinning is expected to continue expanding rapidly in South and Southeast Asia as over the last year China has witnessed rising labour costs, lower crop subsidies, and the imposition of tighter import controls.
Accordingly, relative to recent years, China’s share of global cotton consumption is expected to remain low, concludes USDA.
