April 14, 2012

Thai cotton imports fall on price hike

Thailand's cotton import demand for MY2010/11 and MY2011/12 dived due to a spike in global cotton prices, an economic slowdown locally and worldwide, and prevalent flooding in 2011's quarter.

Cotton imports dropped 3% in MY2010/11 and will likely decline further by 20-30% in MY2011/12 to 1.3 million bales.

The spike in world cotton prices hit record highs in mid- 2011 resulting in a reduction of MY2010/11 cotton yarn production of around 3% from the previous year.

The flooding affected around 4% of total textile industry. However, spinners bore the brunt of the flooding as 20% of their facilities had to close down production.

Consequently, in the first half of MY2011/12, total capacity utilisation of cotton-fibre spinning mills declined to 51% of total capacity utilisation, down 31% from the same period in the previous year.

In MY2012/13 cotton yarn production recovery is expected as such cotton imports will increase to 1.6 million bales, up 20-30% from the previous year. Additionally, US cotton exports will also increase 20% to 0.6 million bales, after decreasing significantly by 32% in MY2011/2012 from MY2010/2011.