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US Gains Help Lift Global Yarn Production, While Fabric Production Slips

Global yarn production increased 5 percent in the second quarter ended June 30 from the first three months of the year, while worldwide fabric production dipped 0.25 percent, a new report from the International Textile Manufacturers Federation (ITMF) showed.

The yarn uptick included a 3.2 percent gain in the U.S., where production is generally for domestic knit production and exports to places such as Central America and Mexico where finished goods exported back to the country must meet yarn-forward rule requirements for duty-free status. For the 10 months through October, U.S. yarn exports increased 2.2 percent to $3.79 million worth of goods, according to data from the Commerce Department’s Office of Textiles & Apparel. Exports to Mexico rose 24.97 percent to $457,786 and were up 8.97 percent to the Dominican Republic to $260,134, and 30 percent to El Salvador to $232,532.

Asian yarn production was up 5.7 percent, led by an 8.8 percent gain by South Korea and an 8.1 percent increase in Taiwan. Gains were also see in Egypt, up 1.4 percent and South Africa, with a 3.3 hike.

“An opposite trend has been observed in all surveyed European countries, Brazil and Japan. Forecasts for third quarter 2018 are only optimistic in Africa,” but the fourth quarter forecast is “positive in all regions except Brazil,” ITMF said.

Global yarn stocks decreased 4.75 percent, with declines of 4 percent in Europe, 3 percent in Asia and 18 percent in Africa balanced somewhat by an 18 percent increase in Brazil. Overall, yarn stocks reached 85 percent of the previous year’s level for the same quarter. Global yarn orders fell 6 percent, led by a 28 percent reduction in Brazil. Yarn orders increased 7.5 percent in Africa and 5.7 percent in Europe.

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The falloff in global fabric production reflected a 6 percent reduction in Africa and a 0.5 percent decrease in Asia, countered by a 1.6 percent increase in Europe and a 3.7 percent jump in Brazil. The world output reached 87 percent of its second quarter 2017 level.

“Fabric production in all regions is expected to decrease in third quarter 2018, except in Brazil, where stability is foreseen,” ITMF said. The fourth quarter “should see improvements in all regions.” Second quarter global fabric stock level grew almost 2 percent, driven by Brazil’s increase of 7 percent, which brought global fabrics stocks 11 percent above their second quarter 2017 level.

Stocks remain stable in Asia, Europe and the U.S., ITMF said. Global fabric orders rose 43 percent at a world level, led by a 65 percent increase in Brazil that followed an unusually low first quarter. Orders in Asia and Europe have stagnated and contracted in Egypt. Global fabric orders are now 16 percent above their level second quarter 2017 level.