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Global Subsidies To Change Our Stashes?

Over at the Stitcher’s Guild sewing message board there has been a discussion on sourcing cotton fabrics to which I posted this roundup of recent global news items. Since it involved quite a bit of writing time I’ll reproduce it here.

It seems that in light of the world’s subsidies and trade agreements concerning all things textile related that the US cotton farmer had best be represented and repre’d well in the world’s economy.

I’ve been researching textile mfg info and read last week (sorry, didn’t save the link) that China is making a far lower profit on the textiles it exports (about 3%) than on any other exports (about 15%).

While textiles are a large, rapid growth export item for China, I’m also reading that China is gearing up to export even more textiles in the coming year. However valuation of the yuan is going to create problems for China’s export endeavors

The government of South Africa will be supporting Textiles and Clothing in it’s budgetary incentives according to the budget comments from Deloite and Touche.

India is also trying to become a major player in the textile export community by developing it’s mostly small mills and applying for exemptions from VAT taxes as are textile processors in Pakistan. The US based textile company, West Point Home, is establishing a new textile plant in Pakistan as well.

There are movements toward reviving the Egyptian textile through franchising which infuses capital (from OxfordBusinessGroup.com])

The granting of licenses to Egyptian factories to produce foreign branded clothing also has benefits. Nike currently has some of its cotton wear produced in Egypt. Industry analysts say the business model they provide and the demand from domestic and foreign market has the potential to rejuvenate the Egyptian textile industry, which has been in decline in recent years due to a lack of investment.

Dubai, a part of the United Arab Emerits, is creating Dubai Textile City for duty free exports.

On the cotton front: drought in Australia is making cotton less accessable to mills. The sourcing of cotton is shifting around and new areas will most likely seize the opportunity to enter the cotton market. New York, India and Pakistan are the major sources for it but prices are increasing. India’s domestic cotton prices paid by it’s own textile processors have risen to match the prices of international sources.

Drought has effected the US cotton growers as well and herbicide resistent strains of pigweed are threatening the southeastern cotton growers.

But the most enlightening (and a must read article) can be found here. The World Trade Organization is the locus for debates on US subsidies for cotton. The US was forced to terminate a program whereby processors and mills were subsidized in buying US cotton when it was at a higher price than the rest of the world supplies. At this moment there are thousands of cotton bales sitting in a warehouse in Memphis waiting to be sold to China when it runs out of its own cotton stash, the size of which is completely unknown to US.

So, it seems to me that there are many changes afoot in the textile market and cotton will most assuredly be increasing in price.

It is hoped that the US government’s own push towards converting farmlands from cotton to corn through ethanol based biofuel subsidies will not effect our stash of fabrics!!! This could in itself be devasting to our cotton production. Fortunately there have been grave reservations raised about the ability of corn-based ethanol to reduce US dependency on foreign oil.

The Bush administration is directing much of its efforts toward developing ethanol from cellulosic sources.

The only mention of hemp as a biofuel source that I’ve found in current news research was in this editorial from the Wausau Daily Herald.

I’d love to hear more about hemp being considered by the biofuel advocates with power…it is, after all, quite the weed.

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About Mary Beth

I am fascinated by changing patterns and colored threads. I sew garments and am teaching myself to machine knit. Since selling the building that housed my workrooms, The Stitchery, I'm searching for a place to set up the knitting machines again. There must be room here somewhere!

3 responses »

  1. MB I missed this discussion over at SG -your ‘discussion’ link goes to another site. Meanwhile, cotton fiber prices have been under attack from places like Pakistan for years.

    Without the subsidy propping up the US industry, cotton would have gone the way of the Dodo bird long ago. When I worked in USA domestic sweater knits, it became harder and harder to source resonably priced yarn from USA companies, as mills and dye houses closed. And that was almost 10 years ago! And printed cotton fabric, from Pakistan, India, and China has been the supply world wide for garments imported into the USA. Goods are shipped to Dubai, Jordan, Russia, Tanzania, Bangladesh, Sri Lanka – you name it, wherever the garment factories with super cheap labor are located (PS China is not so cheap anymore – you want cheap you go to Viet Nam or Azerbaijan) the piece goods are drop shipped to the factory at the behest of the USA ‘manufacturer’.

    The question is, are you really a manufacturer if you no longer own or operate any factories? So many USA garment companies are comprised of showrooms, offices, and a warehouse (that may not even be owned by the company) – everything else is sub-contracted. Soon even those companies will find themselves under attack from product *designed* overseas as well.

    I don’t have to worry about not having enough fabric, cotton or otherwise, in the stash! I have more than enough for me and everyone I know.

    Reply
  2. Fixed the link: thanks, Georgene. It looks like more and more countries are going to be propping up the cotton and textile industries as well. Meanwhile US is under the gun for having done it for so long.

    As a real manufacturer who makes almost everything we sell I find it hard to consider a showroom and distribution system as a “manufacturing” concern.

    Reply
  3. Pingback: Blogland news 3/12/07 | Fashion-Incubator

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