Update: US Exports of Fibermax-Type Cotton Continues to Grow

Sunday, May 17, 2009

As a follow up to my recent blog about the success of Fibermax-type cotton in the global markets, I'd like to offer the following update covering first quarter 2009 export results:

While overall exports of U.S. cotton are down sharply, exports of Fibermax-type cotton (that is, cotton with a staple length greater than 1-1/8” that’s not Pima) has taken over as a driving force behind U.S. exports of cotton. I base these observations after reviewing official U.S. government (Census Bureau) export statistics.

1. Overall U.S. cotton exports to the world are down nearly 18% for first quarter 2009 compared to first quarter 2008, but Fibermax-type cotton exports are up by 51%.
2. So far in 2009, traditional upland cotton's share of US exports is down to 56%, which compares to nearly 64% for first quarter 2008; for Fibermax-type varieties, its share of the export market is up to 38% from just 21% a year-ago. In turn, market share for Fibermax-type varieties increased by 3% from last month alone (March compared to February).
3. For the first quarter of 2009, exports of fibermax-type cotton to China were nearly 344,000 bales, up more than 135% from first quarter 2008 levels. China now consumes nearly 24% of all exports of Fibermax-type varieties to the world; for first quarter 2008, China consumed 21%.
4. The average export price for Fibermax-type varieties according the Census Bureau is 67 cents/pound for the first quarter of 2009, which compares to 55 cents/pound charged for traditional upland. However, the price for Fibermax-type cotton is down from comparable year-ago levels by 8 cents/pound. Yet the price for traditional upland is down by 15 cents/pound.
5. Other highlights of U.S. exports of Fibermax-type varieties: first quarter 2009 exports to Bangladesh have soared by more than 1,000%; exports to Pakistan were up by more than 199% during the first quarter, while exports to Hong Kong were up by 562% and exports to Vietnam were up by 881% and exports to Turkey were up by more than 47%. Interestingly, exports to Morocco are up by 455%, while exports to Indonesia are up by more than 18%, but exports to Mexico were down by 54%.

So, what's the point of this report? Quality sells in today's market. Fibermax has grown to be the dominant variety of quality upland cotton in the U.S. -- so it’s not surprising, then, to see a shift away from traditional upland cotton in favor of quality upland varieties like Fibermax. Mills demand the quality in order to provide better products at a good price for their customers. In turn, retailers are looking for better ways of delivering consumers with better apparel for a better price in order to maintain sales during the economic recession.

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