China´s synthetic fabric exports expand

China´s recent cotton fabric shipments have trended lower at an average 2.0 m tonnes per year compared to roughly 9.0 m tonnes for synthetics. As a result the price of polyester yarn relative to cotton yarn has fallen over the past decade. For example, the price of Chinese polyester yarn averaged 72 cents per pound last month, 76 cents lower than the cotton yarn price of 148 cents. Furthernmore China´s dominance in synthetic fabric exports has surged due to global restrictions on Xinjiang cotton. The region, a key cotton supplier, faces import bans by U.S. retailers, compelling major importers like Vietnam and Bangladesh to reduce reliance on Chinese fabric linked to Xinjiang. This shift aligns with rising consumer demand for affordable performance fabrics like polyester, favored in fast fashion for its lower cost. Lower synthetic fabric prices and the Uyghur Forced Labor Prevention Act (UFLPA) drive this trend, challenging traditional cotton dominance in the market. (Source: USDA, Cotton: World Markets and Trade, 11/2023)

DNFI: World natural fibre production declines

The Discover Natural Fibre Initiative (DNFI) estimates world natural fibre production at 31.9 m tonnes in 2023, a reduction of 100,000 tonnes from the estimate published in early October, and down more than one million tonnes from 2022 between 1.67 USD/kg and 1.98 USD/kg. USDA raised its October estimates of cotton production during 2023 in Brazil, Argentina, and Tanzania, while lowering estimates for production in the USA, Australia, and Greece. The estimate of world cotton production rose by 45,000 tonnes. The Alliance for European Flax/Linen and Hemp observed a substantial decline in abaca deliveries in the Philippines, impacting the projected 2023 production. Cotton futures on the Intercontinental Exchange dropped by 6% in October, maintaining a narrow range since November 2022. Meanwhile, wheat and corn futures in Chicago fell by 36% and 23% respectively over a year, contrasting with a 13% increase in cotton futures. Higher Indian jute prices, despite weak market conditions, aimed to bolster farmers´ fortunes. Silk prices in China rose by 13% annually. Flax long fiber prices in Western Europe surged by 65% from July 2022 to July 2023, reaching 6.72 USD/kg. (Source: DNFI)

Afghanistan: Less poppy, more cotton

Afghanistan´s ban on poppy cultivation led to a surge in alternative crops, notably cotton. USDA forecasts a record 110,000 tonnes for marketing year (MY) 2023/24 up 150% higher than last month, 335% above last year, and 360% beyond the 5-year average. Despite a 6% dip in yield, harvested area sets a record at 250,000 hectares, marking a 355% increase from last year. Satellite analysis confirmed a 99% reduction in poppy cultivation in key regions, driving the rise in alternative crops like cotton, often paired with wheat in the south. (Source: USDA, World Agricultural Production, November 2023)

For more detailed information please see Bremen Cotton Exchange – Report No. 45/46 – 23 November 2023