Struggling textile sector faces more pain
Dec 19, 2002 12:00 PM, By Hembree Brandon Farm Press Editorial Staff
The U. S. textile industry, already reeling from a flood of cheap imports that has closed hundreds of plants and wiped out thousands of jobs, is in for even greater pain as China further ramps up its textile production capacity.
“China is going to deplete the world textile market, particularly as we get closer to 2005 and all the tariffs and barriers come off” under World Trade Organization agreements, Memphis cotton merchant William “Billy” Dunavant told members of the Agricultural Council of Arkansas at their annual meeting.
“Four years ago, the U.S. textile industry consumed 11.3 million bales of American cotton; this year they'll use only 7.5 million. We're seeing the decimation of a major U.S. industry — which has been the best customer for our cotton.”
At a recent international meeting of textile executives at Scottsdale, Ariz., Dunavant said, an official of a major company predicted that in the next five years the best case scenario is that cotton consumption by U.S. mills will be only 6 million bales; the worst case scenario, only 1.5 million.
“I think the 6 million figure can be a reality,” Dunavant said, “but I don't buy the 1.5 million scenario. I don't think that will happen. But that kind of statement shows the kind of thinking, and worrying, that's going on in the U.S. textile industry today.”
The U.S. isn't alone in seeing its textile business sucked up by China, he noted.
“It's happening in all developed countries with big textile consumption: Korea, Japan, Taiwan, Thailand, Indonesia. They all used to huge, very faithful consumers of U.S. cotton; now consumption in each of those countries is down something like 30 percent over the last three years, and that trend will continue.”
Two developing (translate, low wage) countries that will increasingly compete with China, Dunavant said, are Vietnam and Bangladesh, which are rapidly expanding their textile industries. “They don't have the technology that China does — China is state of the art — but they're putting in new factories and will be a factor in the world textile market.
“Pakistan and India are also trying to grow their textile markets, but China is outdoing them. I think China can hit 28 million bales of cotton consumption in the next three years, and that's going to deplete and delete a lot of textile mills around the world, similar to what's happening in the U.S. today.”
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