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Cozy up to Trade this Winter

winter

Cozy up to Trade this Winter

There’s nothing like curling up next to a roaring fire wrapped up in a warm sweater, soft blankets and furry pillows on a cold day. As we bundle up for the remainder of the winter season, we can give thanks to global trade for gifting us with some of today’s trendiest and coziest items – Sherpa wool coats, Mongolian lamb fur pillows and cashmere sweaters, Giza cotton sheets, and Turkish towels.

The United States imported $110 billion worth of textiles and apparel last year, with China, Vietnam and India as the lead exporters. These larger economies dominate overall textile and apparel imports, but specialty products from smaller economies are making a name for themselves with American consumers this holiday season. Before you buy “faux” versions, read on to get the skinny on the originals.

Sherpa from Nepal

Sherpa wool coats, sweaters, and scarves are everywhere this holiday season. Once a high-end statement piece, trendy Sherpa items are now available at varying price points at your local mall. While most of the Sherpa in your closet is likely the faux variety made from polyester, acrylic or cotton, the real deal is inspired by wool clothing worn by the Sherpa people living in the Himalayas.

There are some 150,000 Sherpas residing in the mountainous regions of Nepal, India and Tibet. Many make their living today guiding climbers and tourists up the dangerous summit of Mount Everest as expert mountaineers. But they’re also well-known traders of salt, wool and rice.

The United States is Nepal’s second-largest export market. Top imports include carpets, handicrafts and antiques, animal feed, textiles and apparel. In 2015, the United States established a stand-alone trade preference program with Nepal as part of the Trade Facilitation and Trade Enforcement Act to help support Nepal’s economic recovery following disastrous earthquakes that year. The program established duty-free access for 77 categories of products including carpets, shawls, scarves, handbags and suitcases through 2025.

Although Nepal may have started the Sherpa trend, we get most of our wool products from elsewhere today. U.S. wool apparel imports topped $3.1 billion in 2018. China was the top source at over 42 percent, followed by Italy, Canada and Vietnam.

U.S. wool imports 3 billion

Fur pillows and cashmere sweaters from Mongolia

Fluff up your indoor space by throwing a trendy Mongolian lamb fur pillows on your sofa. (These pillows are all the rage with teens and millennials.) While faux versions are likely a mix of acrylic and polyester, the real ones are made from sheared sheep wool from Mongolia.

Mongolia is home to some 14 million sheep. They graze year-round on Mongolia’s vast plains, accustomed to severe winters, steep mountains and poor vegetation.

Mongolia’s sheep aren’t the only grazers sought after for their soft coats. Mongolia is also home to some 27 million goats that produce 9,400 tons of soft cashmere each year, making Mongolia the world’s second-largest producer of cashmere behind China. Top destinations for Mongolian cashmere include Italy and England. It’s the country’s third-largest exporting industry and employs over 100,000 people, the majority of whom are women.

Exports account for more than half of Mongolia’s GDP. Its economy has traditionally relied on herding and agriculture, but in recent years has gotten a big boost of foreign direct investment in its mining sector which seeks to extract rich deposits of copper, gold, coal, uranium, tungsten and more.

Mongolia second-largest producer of cashmere

Giza cotton sheets from Egypt

If you’ve ever been up late skimming the TV channels over the holiday break, you’ve likely come across a mustached man happily hugging his “MyPillow”. Mike Lindell is now legendary for his infomercial success, and his company has expanded its product line beyond its namesake pillows to offer dog beds, towels and more.

One of the latest product lines from MyPillow is “Giza Dream” sheets and pillowcases made with 100 percent Giza cotton. In one of his infomercials, Lindell explains how he made his signature sheets: “I started by using the world’s best cotton called Giza. It’s only grown in a region between the Sahara Desert, the Mediterranean Sea and the Nile River. It’s ultra-soft and breathable, but extremely durable”.

MyPillow’s first infomercial aired in 2011, but Giza cotton has been around for centuries. Known for being both extra fine and extra long, Giza cotton is planted in Egypt every April and harvested in September. It’s then hand-picked to ensure its properly matured. But issues with deteriorating quality of privately produced Giza cotton led the Egyptian government to intervene in recent years to help restore the reputation of Egyptian cotton.

In 2017, the Egyptian government unveiled a 19-step plan which included taking control of the production and distribution of cottonseed. It’s already led to increased yield and quality, according to a 2019 report by the U.S. Foreign Agriculture Service. The plan also seeks to prevent seed mixing, enforce bans on prohibited varieties, and develop Egypt’s local spinning and weaving industries.

In 2018, Egypt’s total lint cotton exports were estimated at 220,000 bales. India was the top importer of Egyptian cotton, responsible for over 50 percent of total exports. Other top importers include Pakistan, China and Turkey.

World cotton production

Turkish towels

Turkish towels are a summer must-have for sunbathing, but they’ve also made their way into American homes for use after showering, as tablecloths, and as blankets. Usually striped with fringes on the end, these trendy towels are known for being super absorbent, lightweight and getting softer with each wash.

Turkish towels are made with premium Aegean Cotton, known for its extra long fibers. Called “Peshtemal” in Turkey, Turkish towels have a long history dating over 600 years. Turkey is widely credited with inventing the first towels as part of a ceremonial bathing routine for new brides in Turkish hammams.

The Turkish textile industry is one of the leading sectors in its economy, accounting for 16 percent of exports in 2018. According to its Ministry of Trade, Turkey was the world’s third-largest supplier of bed sheets, fourth-largest supplier of towels and bathrobes, and fifth-largest supplier of bedspreads in 2016. Of its top exports markets for home textiles, the United States ranks second behind Germany.

Turkish towels exports

Unwrapping gratitude for trade

Nepal, Mongolia, Egypt and Turkey are inspiring some of the coziest products we’ll unwrap this holiday season.

Even if these products are enjoying the fruits of a fad-induced surge in American demand, their histories date back centuries while also representing an important source of employment and exports for their respective economies today.

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Lauren Kyger

Lauren Kyger is Associate Editor for TradeVistas. Prior to joining TradeVistas, she was a Research Associate at the Hinrich Foundation focused on international trade issues. She is a Hinrich Foundation Global Trade Leader Scholar alumna, earning her Master’s degree in Global Business Journalism from Tsinghua University in Beijing. She received her Bachelor’s degree from the Walter Cronkite School of Journalism and Mass Communication at Arizona State University.

This article originally appeared on TradeVistas.org. Republished with permission.

cotton fabric

Asia’s Cotton Fabric Market – China Still Dominates Exports, Despite a Raging Trade War

IndexBox has just published a new report: ‘Asia – Woven Fabrics Of Cotton – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The revenue of the cotton fabric market in Asia amounted to $43.9B in 2018, increasing by 2% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). Overall, cotton fabric consumption continues to indicate a measured drop. The most prominent rate of growth was recorded in 2015 when the market value increased by 6.4% against the previous year. The level of cotton fabric consumption peaked at $57.9B in 2009; however, from 2010 to 2018, consumption remained at a lower figure.

Consumption By Country in Asia

China (1.9B square meters) remains the largest cotton fabric consuming country in Asia, accounting for 32% of total consumption. Moreover, cotton fabric consumption in China exceeded the figures recorded by the region’s second-largest consumer, Bangladesh (869M square meters), twofold. The third position in this ranking was occupied by Turkey (819M square meters), with a 13% share.

From 2007 to 2018, the average annual rate of growth in terms of volume in China totaled -1.6%. In the other countries, the average annual rates were as follows: Bangladesh (+15.7% per year) and Turkey (-0.4% per year).

In value terms, the largest cotton fabric markets in Asia were China ($13B), India ($9.7B) and Bangladesh ($4.9B), with a combined 63% share of the total market.

The countries with the highest levels of cotton fabric per capita consumption in 2018 were Turkey (9,988 square meters per 1000 persons), Bangladesh (5,219 square meters per 1000 persons) and Viet Nam (2,483 square meters per 1000 persons).

From 2007 to 2018, the most notable rate of growth in terms of cotton fabric per capita consumption, amongst the main consuming countries, was attained by Bangladesh, while the other leaders experienced a decline in the per capita consumption figures.

Production in Asia

In 2018, the production of woven fabrics of cotton in Asia totaled 6.2B square meters, going down by -4.2% against the previous year. Overall, cotton fabric production continues to indicate a measured deduction. The most prominent rate of growth was recorded in 2015 when production volume increased by 10% against the previous year. The volume of cotton fabric production peaked at 8.2B square meters in 2010; however, from 2011 to 2018, production stood at a somewhat lower figure.

In value terms, cotton fabric production stood at $46.9B in 2018 estimated in export prices. Over the period under review, cotton fabric production continues to indicate a mild decrease. The most prominent rate of growth was recorded in 2015 with an increase of 5.9% year-to-year. Over the period under review, cotton fabric production attained its peak figure level at $59.6B in 2008; however, from 2009 to 2018, production failed to regain its momentum.

Production By Country in Asia

China (3.1B square meters) remains the largest cotton fabric producing country in Asia, accounting for 50% of total production. Moreover, cotton fabric production in China exceeded the figures recorded by the region’s second-largest producer, Turkey (833M square meters), fourfold. The third position in this ranking was occupied by India (792M square meters), with a 13% share.

In China, cotton fabric production remained relatively stable over the period from 2007-2018. In the other countries, the average annual rates were as follows: Turkey (+0.1% per year) and India (-5.8% per year).

Exports in Asia

In 2018, the exports of woven fabrics of cotton in Asia totaled 2.2B square meters, leveling off at the previous year. Overall, cotton fabric exports continue to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2010 with an increase of 44% against the previous year. Over the period under review, cotton fabric exports attained their maximum at 2.8B square meters in 2012; however, from 2013 to 2018, exports stood at a somewhat lower figure.

In value terms, cotton fabric exports stood at $15.6B (IndexBox estimates) in 2018. In general, cotton fabric exports continue to indicate a slight reduction. The most prominent rate of growth was recorded in 2010 when exports increased by 23% y-o-y. The level of exports peaked at $22.8B in 2012; however, from 2013 to 2018, exports remained at a lower figure.

Exports by Country

In 2018, China (1.2B square meters) was the major exporter of woven fabrics of cotton, making up 56% of total exports. It was distantly followed by Pakistan (422M square meters), India (118M square meters) and Turkey (109M square meters), together generating a 29% share of total exports. China, Hong Kong SAR (97M square meters) followed a long way behind the leaders.

Exports from China increased at an average annual rate of +2.9% from 2007 to 2018. At the same time, Pakistan emerged as the fastest-growing exporter in Asia, with a CAGR of +5.9% from 2007-2018. India and Turkey experienced a relatively flat trend pattern. By contrast, China, Hong Kong SAR (-13.6%) illustrated a downward trend over the same period. From 2007 to 2018, the share of China and Pakistan increased by +15% and +8.9% percentage points, while China, Hong Kong SAR (-17.7 p.p.) saw their share reduced. The shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, China ($7.9B) remains the largest cotton fabric supplier in Asia, comprising 51% of total cotton fabric exports. The second position in the ranking was occupied by Pakistan ($2.2B), with a 14% share of total exports. It was followed by India, with a 12% share.

In China, cotton fabric exports remained relatively stable over the period from 2007-2018. The remaining exporting countries recorded the following average annual rates of exports growth: Pakistan (+1.1% per year) and India (+6.2% per year).

Export Prices by Country

The cotton fabric export price in Asia stood at $7,047 per thousand square meters in 2018, going up by 9.8% against the previous year. Overall, the cotton fabric export price, however, continues to indicate a relatively flat trend pattern. The pace of growth appeared the most rapid in 2011 when the export price increased by 12% against the previous year. The level of export price peaked at $8,452 per thousand square meters in 2014; however, from 2015 to 2018, export prices remained at a lower figure.

Prices varied noticeably by the country of origin; the country with the highest price was India ($15,533 per thousand square meters), while Pakistan ($5,150 per thousand square meters) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by India, while the other leaders experienced mixed trends in the export price figures.

Imports in Asia

In 2018, approx. 2.1B square meters of woven fabrics of cotton were imported in Asia; increasing by 4.9% against the previous year. The total import volume increased at an average annual rate of +2.1% over the period from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded in certain years. The pace of growth was the most pronounced in 2017 when imports increased by 42% year-to-year. Over the period under review, cotton fabric imports attained their peak figure in 2018 and are likely to continue its growth in the near future.

In value terms, cotton fabric imports stood at $11.8B (IndexBox estimates) in 2018. The total import value increased at an average annual rate of +1.2% over the period from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. The most prominent rate of growth was recorded in 2010 when imports increased by 36% against the previous year. The level of imports peaked at $13.8B in 2011; however, from 2012 to 2018, imports remained at a lower figure.

Imports by Country

Bangladesh represented the major importer of woven fabrics of cotton in Asia, with the volume of imports reaching 873M square meters, which was near 42% of total imports in 2018. Viet Nam (257M square meters) held a 12% share (based on tonnes) of total imports, which put it in second place, followed by China, Hong Kong SAR (5.1%), Indonesia (5%), Cambodia (5%) and Turkey (4.5%). China (94M square meters), Sri Lanka (72M square meters), South Korea (65M square meters), Thailand (43M square meters), the United Arab Emirates (37M square meters) and Japan (36M square meters) took a little share of total imports.

From 2007 to 2018, average annual rates of growth with regard to cotton fabric imports into Bangladesh stood at +15.3%. Cambodia (+20.8%), Viet Nam (+13.7%), Indonesia (+9.6%) and the United Arab Emirates (+3.2%) also displayed positive paces of growth. Moreover, Cambodia emerged as the fastest-growing importer in Asia, with a CAGR of +20.8% from 2007-2018. Sri Lanka experienced a relatively flat trend pattern. By contrast, Thailand (-1.4%), South Korea (-2.2%), Turkey (-3.9%), Japan (-4.2%), China (-8.9%) and China, Hong Kong SAR (-12.4%) illustrated a downward trend over the same period. Bangladesh (+33 p.p.), Viet Nam (+9.3 p.p.), Cambodia (+4.4 p.p.) and Indonesia (+3.2 p.p.) significantly strengthened its position in terms of the total imports, while Turkey, China and China, Hong Kong SAR saw its share reduced by -2.5%, -8% and -16.8% from 2007 to 2018, respectively. The shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, the largest cotton fabric importing markets in Asia were Bangladesh ($3.4B), Viet Nam ($2B) and Indonesia ($855M), with a combined 54% share of total imports. China, China, Hong Kong SAR, Sri Lanka, Turkey, Cambodia, Thailand, Japan, South Korea and the United Arab Emirates lagged somewhat behind, together comprising a further 35%.

Cambodia experienced the highest growth rate of imports, in terms of the main importing countries over the last eleven-year period, while the other leaders experienced more modest paces of growth.

Import Prices by Country

In 2018, the cotton fabric import price in Asia amounted to $5,633 per thousand square meters, reducing by -3.6% against the previous year. Over the period under review, the cotton fabric import price continues to indicate a relatively flat trend pattern. The pace of growth was the most pronounced in 2011 when the import price increased by 23% y-o-y. The level of import price peaked at $9,532 per thousand square meters in 2014; however, from 2015 to 2018, import prices stood at a somewhat lower figure.

Prices varied noticeably by the country of destination; the country with the highest price was China ($8,692 per thousand square meters), while the United Arab Emirates ($3,143 per thousand square meters) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by Indonesia, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

Trump Steps in to Assist Suffering Farmers

Just in time for the season of giving and hope, President Donald Trump approves another round of mitigation payments this week to assist farmers feeling the impacts of foreign trade retaliations, according to a release this week from the USDA.

The release confirms this is the second and final round of mitigation payments. Moving forward, certain producers that fall within the required categories will have the opportunity to leverage the Market Facilitation Program for the second half of 2018 production.

U.S. Secretary of Agriculture Sonny Perdue commented:

“The President reaffirmed his support for American farmers and ranchers and made good on his promise, authorizing the second round of payments to be made in short order. While there have been positive movements on the trade front, American farmers are continuing to experience losses due to unjustified trade retaliation by foreign nations. This assistance will help with short-term cash flow issues as we move into the new year.”

Producers interested in the MFP opportunity will have until January 15, 2019 to sign up for the program. The release specifically outlines the program was designed to help, “almond, cotton, corn, dairy, hog, sorghum, soybean, fresh sweet cherry, and wheat producers who have been significantly impacted by actions of foreign governments resulting in the loss of traditional exports,” (USDA).

Beyond the mitigation payments, Secretary Perdue followed through on Trump’s command to create other solutions for short-term relief, including:

-USDA’s Agricultural Marketing Service (AMS) which offers a food purchase and distribution program to purchase up to $1.2 billion in commodities unfairly targeted by unjustified retaliation.

-USDA’s Farm Service Agency (FSA) has been administering MFP to provide the first payments to applicable producers.

– Agricultural Trade Promotion (ATP) program provides $200 million to be made available to develop foreign markets for U.S. agricultural products.

Producers interested in reading more about these solutions can visit: www.farmers.gov/mfp

Source: USDA

Bayer CropScience Opens New US Research Center

West Sacramento, CA – Bayer CropScience has opened a new research and development facility in West Sacramento, California to support the company’s work in developing improved seeds and crop protection products.

According to the Germany-based company, the new $80 million facility, which will serve as the global headquarters of Bayer CropScience’s Biologics Business, is situated on 10 acres of land and features a 100,000-square-foot building and a 35,000-square-foot pilot plant to support research and development of biological crop protection products.

In addition, a 30,000-square-foot vegetable seeds research building and a 2,000-square-foot greenhouse will be on-site with five acres of nearby land for future greenhouse space.

“We are investing heavily in R&D infrastructure such as laboratories, greenhouses and breeding stations as well as new production capacities and seed processing facilities,” said Bayer CropScience CEO Liam Condon, adding that the company aims to grow faster than the US market.

Bayer CropScience plans to invest close to $1 billion in capital expenditures (CAPEX) in the US States over the next several years, mainly to ramp up research and development and to expand a world-class product supply of its top crop protection brands.

In addition to building its R&D network in the US, the company is also investing significantly in the production capacities of the facilities manufacturing its crop protection products.

The company has expanded the capacity of its facilities in Muskegon, Michigan and Kansas City, Missouri, and recently completed the construction of a new plant in Mobile, Alabama to produce its agricultural-grade ‘Liberty’ weed killer.

Bayer CropScience also invested $17 million in the expansion of its Memphis Research and Development site, bringing total greenhouse capacity at the facility to 76,000 square feet.

Located in the heart of the Mississippi Delta, the Memphis facility works on developing high quality cotton and soybean varieties, as well as trait innovations.

In June 2014, the company announced plans to expand its North American and global seeds headquarters in Research Triangle Park (RTP), North Carolina.

The RTP site has experienced significant operational growth in recent years, and approximately $200 million will be invested through 2016.

The company also plans to invest approximately $90 million in its Cotton Research and Development Laboratory in Lubbock, Texas.

Founded in 1998, the company’s global cotton headquarters is focused on providing cotton growers with the products and solutions they need to meet the world’s growing demand for fiber.

According to a statement from Bayer CropScience, its overall RTP investment program in the US includes several additional projects – the construction of the Development North America facility dedicated to crop protection and environmental science research; renovations to its North American headquarters; construction of a 6,000 square-foot North American Bee Care Center; and the purchase of 70 acres of land to accommodate a new 29,500 square-foot greenhouse.

09/08/2014