JAPAN: Country Report to the 74th ICAC Plenary Meeting. Japan Spinners Association The Japan Cotton Traders Association December 2015
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1 JAPAN: Country Report to the 74th ICAC Plenary Meeting Japan Spinners Association The Japan Cotton Traders Association December 2015 On behalf of both sectors of Spinners and Cotton Traders in Japan, we hereby would like to make a summary report of the Japanese cotton industries current situation and to make some proposals as a cotton consuming country to cotton producing countries. 1. Recent Situation of Japanese Cotton Industry The Japanese economy is in a moderate recovery, affected by decrease of oil price and improvement of employment and income, while some weakness can be seen in private consumption after the consumption tax increase in April However, the cotton-goods market of our country is in a declining trend due to decrease in personal per capita consumption and population, but Japan continues to be in the top five cotton goods consumers in the world. In 2014, the production of the cotton yarn recorded thousand tons in Japan and the imports of cotton goods into Japan recorded thousand tons (cotton yarn, fabric and made-up goods). It means that total thousand tons of cotton goods (in yarn volume equivalent) were supplied to the Japanese market and the most of them were consumed at home. This is a scale equivalent to 1.2% of the global cotton yarn production (the cotton yarn production in the world was estimated in 2014 by ICAC for 50,438 thousand tons) The domestic spinning capacity of all types slightly decreased from 1,070 thousand spindles in 2013 to 1,050 thousand spindles in Japanese spinners continue relocating their spinning capacity to overseas joint-venture textile mills. At this time a total of 1,050 thousand spindles operates as joint-venture mills that include 400 thousand spindles in Indonesia, 130 thousand spindles in Thailand and 340 thousand spindles in Brazil. 1
2 Japan s imports of raw cotton have decreased by 6.6% from 69,165 tons in 2013 to 64,604 tons in In 2014, United States accounted for 39.6% of Japan s total imports of cotton. Australia, Greece and Brazil also occupied 21.9%, 15.2% and 11.4% respectively. The share of those four countries accounted for 88.1% of Japan s total cotton imports. 2. Proposals for Cotton Producing Countries (1) ELS cotton Supply in Steady and Sufficient Volume Extra Long Staple (ELS) cotton has experienced firm demand in recent years, but the production level is trending down, thus the tight supply demand situation continues, and the price remains firm. Although ELS cotton primary is used in Fine Count Yarn to make high quality products, its market is expanding into markets for premium denim, towels or other various products, also ELS cotton demand is rapidly increasing in many countries. We don t believe that the present production of the ELS cotton can fully satisfy the potential world demand. It is expected that the demand and consumption for these quality products will continue to grow. The world ELS cotton production should be increased to meet the world demand which we as one of ELS consuming countries strongly request. (2) Prevention of Contamination Cotton contamination caused by foreign matters continues to be a problem, with no substantial improvement after many years of complaints. The foreign matter is discovered in almost all cotton growths, and the variety of foreign matter sources is increasing in recent seasons. In cotton consuming countries, considerable investment has been made for introducing foreign matter detector in spinning process as well as great labor is spent on discovery of the foreign matter mixed in unprocessed cotton in order to prevent the trouble created by foreign matter. Although after all these efforts in consuming countries, foreign matter cannot be completely prevented. 2
3 Due to the quality trouble resulting from the foreign matter, many Japanese mills have reduced the use of cotton; additionally the large expense to control the foreign matter is reducing the price competitiveness of cotton. Many Japanese mills have shifted to other materials, such as synthetic fiber. In order to regain the share by which cotton has lost, increased efforts to prevent the foreign matter by cotton producing countries and the intensive control measures are strongly called for. (3) Supply of High Spinnability Cotton For producing desirable and trouble-free yarns, we spinners require that cotton is free from contamination problems including neps, stickiness and extraneous matter that include seed coat fragment and bark. We would like to share our values as a cotton consumer with our cotton producing countries in order to reduce contamination so that we can receive increased supply of high spinnability cotton that can lead the way to increase cotton competitiveness and consumption with cotton producing countries. (4) Traceability of cotton With the increasing concern by consumers' environmental and health issues, the supplier is being asked additional information as to production and the processing of cotton similar to questions of the sustainability of food production. Additionally, the trouble about quality or contamination needs to go back to the place of production of cotton with a problem, to investigate the cause to implement a required measure to prevent contamination. In order to identify these issues, the traceability of the whole supply chain of cotton is important, it is necessary to establish the system to verify all information in the supply chain all the way back to the producer that can be easily obtained for every cotton bale by each and every cotton producing country. (5) An appeal to consumers Cotton s share of total mill consumption of textile fibers continues being lost to man-made fibers, including polyester. However, cotton has an outstanding advantage; its environmental impact is smaller and more sustainable compared to man-made fiber. 3
4 We propose that the world cotton industry advertise this outstanding feature of cotton to consumers, and to increase additional resources to regain the lost share of cotton. Thank you very much. 4
5 Table 1 Spinning Capacity and Yarn Production in Japan Spinning Capacity (1,000Spds) Yarn Production (1,000 Metric Tons) Cotton Type Others Synthetic Cotton Yarn Rayon Yarn Fiber Others Yarn , , , , , , , , , , , N/A N/A 1, N/A N/A 1, N/A N/A 1, N/A N/A 1, Source : Ministry of Economy, Trade and Industry 5
6 Table 2 Japan's Imports of Cotton Yarn, Cotton Fabrics And Cotton Made-Up Goods Unit : 1,000 Metric Tons (Million Sq. Meter) Cotton Yarn Cotton Fabrics Cotton Made-Up Goods Pakistan Indonesia China China China Vietnam (501.0) 53.4 (387.9) (459.6) 49.4 (355.0) (408.1) 43.3 (317.5) (394.0) 40.4 (298.9) (313.3) 30.8 (226.1) (330.2) 32.5 (240.6) (326.9) 27.5 (204.3) (297.9) 25.4 (188.0) (292.9) 23.7 (175.3) (290.4) 19.7 (150.4) Source : Ministry of Finance 6
7 Table 3 Japan's Raw Cotton Imports by Country Unit : Metric Ton U.S.A Australia Brazil Greece India Egypt Others Total ,033 39,108 30,572 6,335 4,791 4,068 21, , ,658 33,647 26,024 2,036 5,011 2,347 10, , ,258 32,791 27,657 1,970 4,452 2,161 15, , ,024 26,838 28,033 2,108 4,153 1,368 10, , ,585 14,801 17, , ,875 67, ,529 18,874 14,718 1,308 1, ,146 74, ,481 19,025 13,806 2,891 1,702 1,155 5,310 81, ,816 12,969 12,062 7,815 1, ,986 60, ,326 13,930 10,779 10,729 1, ,057 69, ,588 14,139 7,354 9,850 1, ,604 Source : Ministry of Finance 7
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