Methodology
Dun & Bradstreet has prepared this market study report
for exports of MMF textiles to the USA based on analysis of data collated from
UN Comtrade. The report was prepared after analysing data pertaining to US
imports of MMF textiles, in terms of value, volume and unit value realisation.
The study has brought forth insightful trends, which would
be of particular interest and help to exporters of MMF textiles.
The US remains the world’s leading consumer of textile
products (fabric, yarns and made-ups) importing around US$ 72 bn worth of
textiles and apparel in 2002 and US$ 77 bn worth of these products in 2003. Of
these, apparel imports accounted for around US$ 57 bn in 2002 while textile
imports accounted for around US$ 15 bn. For 2003, US imports of apparel and
textiles were US$ 61 bn and US$ 16 bn respectively.
Of the above, US imports of MMF textiles¨
were US$ 1.9 bn in 2003. Made-ups accounted for the largest share of US imports
of MMF textile products in 2003 with a share of nearly 57.3%, followed by
fabrics with around 30.6% and yarn with around 12%. In 1998, fabrics accounted
for the largest percentage of US MMF textile imports with a share of around
54.2%, followed by made-ups with 26.6% and yarn with around 19%. This is an
indication of the declining processing activity taking place in the US textile
industry and the increased reliance on finished MMF textile products. Due to this, a growing portion of the
domestic demand is being increasingly met through imports, as is evidenced by
the rising import penetration ratios. The integration of quotas into the Agreement
of Textiles and Clothing of the WTO till date has taken place primarily in the
made-ups segment because of which they currently account for the largest share
in the total MMF textile imports.
Integration of
Quotas in Phase 3
The integration of quotas under
the MMF textile imports into the US has been back loaded, with the entire
integration taking place in the last two phases. The total US MMF textile
import market under quotas in 2003 was 61% in terms of value and 59% in terms
of volume. Post phase 3 integration of quotas, the US market for MMF textiles
has surged by 47% in value terms and by 59% in terms of volume, with China
being the major beneficiary.
US imports of MMF yarn stood at US$ 227.8 mn in 2003, with
NAFTA countries dominating the market with a share of almost 37%. India is an
insignificant player in this market with a share of less than 1%. Although 55%
of the yarn imports remains to be integrated, it is not likely to present many
opportunities for Indian exporters post quota removal as the market is
dominated by the NAFTA countries and is likely to remain as such even after
complete elimination of quotas.
US imports of MMF fabrics have hovered in the range of US$
559 mn to US$ 654 mn during 1998-2003, with Taiwan and NAFTA countries being
the major players in the market. Although India is a small player in this
market, with a share of less than 1% in 2003, we foresee reasonable
opportunities for India in 2005, when quotas will be lifted on all fabric
items. India is well placed at fourth position in the Polyester Wool Spun
Fabric market, with a share of 4.7% in 2003.
US imports of MMF made-ups have
increased from US$ 295 mn in 1998 to US$ 1.1 bn in 2003. China has emerged as a
leading player after the removal of quotas on most of the made-ups, and
accounts for almost 50% of the total MMF made-ups market. This major expansion
has primarily been on account of aggressive price-cutting by Chinese exporters,
who operate at the low-end in most of the made-up categories. India has also
benefited in the post-quota regime and has been able to improve its share in
the total made-ups imports of US. India’s exports of Table Linen of man-made
fibres to US have grown at an annual rate of nearly 52% pushing up its share
from 5.8% in 1998 to 13.2% in 2003. Similarly India’s exports of Counterpanes
to US have witnessed a growth of nearly 60% p.a., making it the second largest
player in this category of the made-ups market.
On removal of quotas in Phase 3
of integration in Jan 2002, markets have turned for most of the players in the
US market for MMF textiles. China has outperformed the erstwhile market leaders
South Korea and Canada, gaining market share by 24 percentage points since
2001. It is expected that with the complete elimination of quotas in 2005,
greater opportunities exist for players like India to expand their market.
§
In case of made-ups, 93% of the market has been
integrated and much of the impact of the quota removal has already been
absorbed, therefore, a major expansion cannot be expected in this segment.
§
MMF fabrics will be completely integrated in 2005,
providing opportunities for Indian exporters to increase their volumes in the
US market. NAFTA countries, which currently account for 22% share in the MMF
fabric market, will continue to pose threat to India on account of their zero
tariff imports into US. However, India has a potential to considerably increase
its share in many categories of MMF fabrics, as is reflected in its exports of
those fabrics to the EU countries.
§
In case of MMF yarn, short-term opportunities exist on
complete elimination of quotas in 2005 as reflected by the significant increase
in Phase 3 of quota integration, when India’s exports rose from US$ 14,008 in
2001 to US$ 1 mn in 2002.
In order to increase India’s market share in the quota
free regime, the following strategy should be considered for adoption:
§
Improve performance and presence in terms of quality,
cost, product profile.
§
Organise regular buyer seller meet and participate in
international trade fairs/ exhibitions to showcase India’s strength in MMF
textile market.
§
Enter into short-term contracts with US based designers
for fabrics to understand the design preference of the US consumers.
§
Employ innovative price-product strategies in the case
of made-ups to compete against low cost players like China.
¨ The imports are based upon the HS-lines covered under this study, as defined by the mandate of SRTEPC.
REF:
MR/USA Study/2004
/1016
2nd December 2004
Dear
Sir,
We have great pleasure in informing you that the
Council has carried out a market study of the USA for man-made fibre textile
products by engaging M/s. Dun & Bradstreet, a well known market research and
data management agency. You may be aware that the U.S. has emerged as the second
largest market for our products with exports valued at Rs.746 crores,
a growth of 38% during 2003-04. The study assumes greater significance
considering the challenges and opportunities for exports to USA in the post
Quota regime.
The above Report will be available to the interested
members in both hard copy and soft copy (C.D.). The cost of the hard copy is Rs.1000 (Rupees One Thousand
Only) and the CD would cost Rs.750 (Rupees Seven Hundred Fifty only). The copy
of the report may be obtained directly from the Head Office or through Courier
with an additional cost of Rs.50/- extra for postage. Payment can be made in
Cash or Cheque (DD for outstation members) drawn in favour of the Council.
Thanking
you,
Yours
Faithfully,
K. VIJAY MANI