According to USDA's latest report, cotton spinning in Vietnam has more than tripled in the last four years, with total cotton use forecast to reach 5.1 million bales in 2015/16.
During this period, Vietnam accounted for half of the total world growth in cotton demand, with rising yarn exports being the main source of this rapid expansion in mill use.According to USDA's latest report, cotton spinning in Vietnam has more than tripled in the last four years, with total cotton use forecast to reach#
Net yarn exports increased at an annual rate of over 40 per cent between 2011/2012 and 2015/2016, with China being the largest market for Vietnam yarn exports accounting for 80-90 per cent of all yarn exports.
“This growth is paralleled by a large rise in Chinese investment in yarn spinning in Vietnam, alongside wholesale relocations of some firms,” USDA said.
“The key driver of this trend has been China's domestic cotton policy which has elevated the internal price of cotton enough to render many spinning operations unprofitable,” the US agricultural body explained.
At the same time, cotton consumption for Vietnam's domestic yarn utilisation has also shown impressive growth, more than doubling since 2011/2012.
“Thus, even as more yarn is being exported to China, Vietnam's role further up the textile value chain is also growing,” USDA observed.
For 2015/16, USDA expects world production to lower substantially, mostly due to changes in Pakistan, India, and China and consumption is forecast to be marginally lower.
US production and use have also been lowered slightly, while ending stocks have been raised, but the US season-average farm price is projected unchanged at 59 cents per pound.
For the week ending December 31, accumulated exports for all cotton rose to 2.44 million running bales versus 2.53 million last year, while outstanding sales rose to 2.53 million versus 5.83 million last year. (AR)
ALCHEMPro News Desk – India
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