Cotton and MMFs Can Be Complementary

摘要

During the past four years, nothing has impacted the cotton and textile industries more dramatically than price volatility (both raw cotton and yarn) and the global financial crisis. In 2011/12, the cotton supply grew while demand was shrinking. Spinning mills reduced cotton consumption and there were a number of other freaky and complex factors, such as changing national policies and adverse weather in the cotton-growing regions. The textile industry market is still sluggish in the aftermath of thefinancial crisis. Buyers have adopted a wait-and-see attitude and now purchase cotton hand-to-mouth to mitigate their risk. The bottom line is that the cotton and textile industries have become unstable. There is no cotton produced in Taiwan, so spinnersrely completely on imports. It takes 120 to 150 days to complete the cotton yarn purchasing and producing process, which introduces additional risk. Unfortunately, due to these factors, most of Taiwan's spinning mills experienced big losses from the beginning of 2011 through August 2012 due to a declining cotton futures price.