National Cotton Council economists told delegates at the group’s annual meeting in Memphis on Saturday that the outlook for cotton this year will be influenced by China’s policy decisions and continued competition from man-made fibers.
Gary Adams, NCC’s vice president of economics and policy analysis, said recent data on fiber market share demonstrates the many challenges from synthetic fibers.
“Measured on the basis of pounds of cotton fiber, the 2012 U.S. retail cotton market [about 17 million bales] fell to the lowest level since 1996, amid a fourth consecutive year of declining market share,” Adams said.
In part, the loss in market share is the result of cotton prices that have been uncompetitive with polyester prices. As raw fiber prices have moderated in recent months, cotton textile products also have become more competitive with man-made 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, Adams said.
“However, cotton is unlikely to reclaim market share unless cotton prices trade at levels below polyester,” he said.
U.S. spot cotton is currently selling for about 76 cents a pound, while polyester staple is at 91 cents a pound and polyester filament is at 80 cents a pound.
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 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 under way 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 with polyester, and more favorable spreads between yarn values and fiber prices, he noted.
China’s current policy is another factor lending support to mill use in other countries. By purchasing its domestic production at prices 40 to 50 cents above world prices, China is ensuring that its internal prices are well above world prices and causing its cotton spinning to be uncompetitive, Adams noted. Fabric manufacturers in China are increasingly looking to fill their yarn demand with imported product.
China’s policy, while supporting prices received by farmers, acts as a tax on textile mills and has furthered the shift to man-made fiber. 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 fall to 34.3 million bales. With the support price well above world market prices, the vast majority of China’s domestic production will enter government reserves.
“The coming year is shaping up to be a challenging year where uncertainties regarding the market are magnified by the 40-million-bale gorilla that is China’s government reserves,” Adams said.
After consecutive annual declines, cotton demand has stabilized and is expected to grow in the coming year. Adams said with a recovering global economy, there is strong potential for growth in cotton demand. However, that full potential will not be realized as long as China continues to operate its current policy.
Reduced imports by China are only partially offset by increased imports in other countries, leading to a decline in world trade from 38.9 million bales to 36 million bales. The U.S. is projected to see a decline in exports for the 2013 marketing year, down 1.6 million to 10.6 million bales.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast