Record Cotton Prices & Effects on Textile Supply Chains USDA Outlook Forum Jon Devine Cotton Incorporated

Size: px

Start display at page:

Download "Record Cotton Prices & Effects on Textile Supply Chains. 2012 USDA Outlook Forum Jon Devine Cotton Incorporated"

Thomas Stafford
8 years ago
Views:

1 Record Cotton Prices & Effects on Textile Supply Chains 2012 USDA Outlook Forum Jon Devine Cotton Incorporated

2 Record Prices cents/lb A Index Source: Cotlook

3 Cotton Prices & Textile Supply Chains What have been the consequences of prices? When did changes occur downstream? How large were the price increases? What have been the effects on demand?

4 Tracking the Textile Supply Chain Fiber Yarn Garment Retail

5 Indexed Price Movement index August 2010 = % A Index 120% 100% % % % % 140 0% % % 80-60% Source: Cotlook

6 A Index Prices for Future Delivery A Index quotes for delivery in several months Source: 06/09/2011 Cotton Outlook Source: Cotlook, data from March 8, 2011

7 Indexed Price Movement index August 2010 = % A Index Landed Prices - A Index Countries 120% 100% 80% % 60% 40% % 140 0% % % 80-60% Sources: Cotlook, Global Trade Atlas Notes: Landed fiber for A Index countries

+83% 60% 40% 160 20% 140 0% 120-20% 100-40% 80-60% Sources:

8 Price Movement & Demand Response: Fiber 250 index August 2010 = 100 Landed Fiber Volume (vs. 5-year avg) fiber import volumes (A Index countries) vs. preceding 5-year average 100% 200 Landed Prices - A Index Countries +83% 75% % 25% 100 0% 50-36% -25% -50% 0-75% Sources: Cotlook, Global Trade Atlas Notes: Landed fiber for A Index countries

preceding 5-year average 100% 200 Landed Prices - A Index Countries +83% 75% 150 50%

9 Price Movement & Demand Response: Fiber index August 2010 = 100 fiber import volumes (A Index countries less China) vs. preceding 5-year average Landed Fiber Volume (vs. 5-year avg) Landed Prices - A Index Countries - less China +114% -60% 100% 75% 50% 25% 0% -25% -50% -75% Sources: Cotlook, Global Trade Atlas Notes: Landed fiber for A Index countries less China

preceding 5-year average Landed Fiber Volume (vs.

10 Pain Greater Outside of China Month & Value of Maximum Average Landed Cost Trade Atlas A Index Countries A Index less China $1.65 $1.66 June June $1.88 June China Turkey Mexico Indonesia Vietnam Thailand South Korea n/a $1.45 May $1.64 $1.62 August July $1.86 July $2.02 $2.00 July June Source: Global Trade Atlas

88 June China Turkey Mexico Indonesia Vietnam Thailand South Korea n/a $1.

11 Pain Greater Outside of China Trade Atlas A Index Countries A Index less China Month & Value of Maximum Average Landed Cost $1.65 June $1.66 June $1.88 June China Turkey Mexico Indonesia Vietnam n/a Thailand South Korea $1.45 May $1.64 $1.62 Source: Global Trade Atlas Note: Data are for maximum monthly averages and are not weighted by volume. August July $1.86 July $2.02 $2.00 July June

88 June China Turkey Mexico Indonesia Vietnam n/a Thailand South Korea $1.45 May $1.64 $1.

12 Price Movement & Demand Response: Yarn index August 2010 = % +59% 10% 0% % % % 80-40% Yarn Index Landed Yarn Prices - GTIS Countries 60-50% Sources: Cotlook, Global Trade Atlas Notes: Average landed yarn prices for all countries in the GTIS dataset. Import volumes for entire GTIS dataset.

Countries 60-50% Sources: Cotlook, Global Trade Atlas Notes: Average landed yarn

13 Price Movement & Demand Response: Yarn index August 2010 = 100 Landed Yarn Volumes (vs. 5-year avg) yarn import volumes (GTIS countries) vs. preceding 5-year average +59% 100% 75% 140 Landed Prices - GTIS Countries 50% % % 0% 80-25% 60-40% -50% Sources: Cotlook, Global Trade Atlas Notes: Average landed yarn prices for all countries in the GTIS dataset. Import volumes for entire GTIS dataset.

preceding 5-year average +59% 100% 75% 140 Landed Prices - GTIS Countries 50% 120 25% 100-40% 0% 80-25%

14 Price Movement & Demand Response: Garments index August 2010 = 100 cotton-dominant apparel import volumes vs. preceding 5-year average (SA) Landed Garment Volume (vs. 5-year avg) +26% Landed Garment Prices 50% 25% % 0% 80-25% Source: OTEXA Notes: Data seasonally-adjusted

preceding 5-year average (SA) Landed Garment Volume (vs.

15 Price Movement & Demand Response: Retail index August 2010 = 100 month-over-month change in apparel spending volumes (SA) Consumer Apparel Spending - SA Apparel CPI (less footwear) +6% 10% 5% 100 0% 95-5% Sources: US Department of Commerce, US Bureau of Labor Statistics Notes: Data seasonally-adjusted

Spending - SA Apparel CPI (less footwear) +6% 10% 5% 100 0% 95-5% Sources: US

16 Consequences for Fiber Consumption Apparel s Share of Cotton Imports (weight basis) 17% 81% Apparel Home Other Sources: US Department of Commerce, USDA ERS Note: Percentages based on 5-year averages.

17 Consequences for Fiber Consumption Product Share of Cotton Apparel Imports (weight basis) 13% 33% 54% Tops Bottoms Other Sources: US Department of Commerce, USDA ERS Note: Percentages based on 5-year averages.

Tops Bottoms Other Sources: US Department of

18 Consequences for Fiber Consumption Product Share of Cotton Apparel Imports (weight basis) 13% Product Knit Tops Cotton-Dominant Imports Price at Peak +23% (Sept) Volume at Nadir -20% (Dec) 33% 54% Woven Tops +36% (Sept) -24% (Dec) Tops Bottoms Other Bottoms +26% (Oct) -14% (Oct) Sources: US Department of Commerce, USDA ERS Note: Volume figures compare monthly imports since August 2010 against 5-year averages in seasonally-adjusted data.

(Sept) -24% (Dec) Tops Bottoms Other Bottoms +26% (Oct) -14% (Oct) Sources: US Department of Commerce, USDA

19 Summary of Price & Demand Movement Peak in Monthly Prices Relative to August 2010 Values 154% Fiber trade recovered with Chinese reserve purchasing Yarn trade volumes depressed A Index 83% Fiber 59% Yarn 26% Garment 6% Garment trade volumes depressed Price pressure at retail confounded by macroeconomic conditions Smaller market and lost of share Sources: Cotlook, Global Trade Atlas, US Department of Commerce, US Bureau of Labor Statistics Retail

Garment trade volumes depressed Price pressure at retail confounded by macroeconomic conditions Smaller market

20 Questions for Demand: Collision of Factors Short-term contraction Higher prices & volatility Lower order volumes and market share Stagnation in traditional end-use markets Long-term growth Population growth Economic growth Yield growth million bales World Consumption Source: USDA

end-use markets Long-term growth Population growth Economic growth Yield growth

21 Record Cotton Prices & Effects on Textile Supply Chains 2012 USDA Outlook Forum Jon Devine Cotton Incorporated

A Sustainable Supply Chain Value Model for the Textile Industry

A Sustainable Supply Chain Value Model for the Textile Industry Kent Kvaal Global Vice President, Sales & Technical Resources ITMF Vietnam, 6 November 2012 A Sustainable Supply Chain Value Model for the