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Led by Declines in Asia and Brazil, Global Yarn and Fabric Production Falls 23%

Global yarn production decreased 23 percent in the fourth quarter of 2017 compared to the third quarter, while fabric output fell 2 percent in the same period, according to a new report from the International Textile Manufacturers Federation (ITMF). Europe and Africa saw the biggest gains, while Brazil and Asia saw the largest declines.

Yarn production was down 23 percent in Brazil, 14 percent in Asia and 4 percent in the U.S., dragging on a 15 percent increase in Europe and 12 percent growth in Africa, ITMF reported. All surveyed countries, except Brazil and Germany, are expected to register a decrease in yarn output in the first quarter, too.

Global yarn stocks were stable between the third and fourth quarters, according to ITMF. An 11 percent reduction in Brazil, 9 percent falloff in Egypt and 4 percent dip in Europe were balanced out by a 3 percent increase in Asia.

Overall, yarn stocks reached 96 percent of their previous year level for the same quarter. Yarn orders increased on average quarter to quarter, with an 8 percent contraction in South Korea equaled by positive trends in the other reporting countries.

The global fabric production decline was led by a 12 percent drop in Brazil and a 2 percent decrease in Asia, while Europe saw declines of 10 percent, and Africa was down 6 percent. The world output level reached 95 percent of its fourth quarter 2016 level. On the brighter side, Europe and Brazil are expected to post production increases in the first quarter.

The global fabric stock level grew 3 percent in the fourth quarter, driven by Brazil’s 15 percent gain, and brought the index of fabrics stocks 3 percent above year-ago levels. In 2017, stocks have been stable in Asia and the U.S., and they increased steadily in Europe and Brazil, while falling in Egypt.

On average, fabric orders reduced 23 percent between the third and fourth quarters in the countries under review, ITMF noted. The growth of 11 percent in Egypt and 2 percent in Europe was not sufficient to compensate for reductions of 31 percent in Brazil. The global index for fabric orders fell 3 percent from the fourth quarter of 2016.