The textile industry comes under the oligopoly

Cotton situation in Japan 2017/18

This is mainly due to a falling birth rate and an aging society, lower individual consumption and a declining population. In view of this general economic situation, the textile industry also remained calm: the falling demand for textiles and clothing, resulting from stagnating per capita consumption, continues as in previous years.

Japanese production of cotton yarn decreased by 3 percent to 33,200 tons in 2017, while imports of cotton products (yarn, fabrics and made-up goods) to Japan decreased by 2 percent to 554,100 tons. The supply of cotton products on the market was accordingly 587,300 tons, a large part of which was consumed domestically.

The total Japanese spinning capacity across all spinning processes totaled 886,000 spindles in 2017, which is only slightly below the previous year. The Japanese spinning mills continue to move their production capacities to foreign joint venture textile factories. Therefore, the Japanese cotton industry is shrinking from year to year.

Cotton imports

Despite higher cotton prices, Japanese cotton imports rose by 6.5 percent from 52,166 to 55,585 tons in the 2017/18 season. After a difficult previous season with declining consumption, positive shopping behavior has now returned. The main supplier was the USA, followed by Australia, Greece and Brazil. American cotton imports, which are mainly processed into yarns of medium fineness, rose by 14 percent to 27,433 tons. With 49 percent, the USA is the largest cotton supplier. Imports of Greek cotton, which is processed into coarser yarns, rose by 9 percent to 6,749 tons and the trend is upwards. The same applies to Brazilian cotton for coarse yarns, the import of which rose by 24 percent year-on-year to 5,225 tons. In contrast, imports from Australia fell by 11 percent to 11,757 tons. Although this has less contamination and a longer stack length, the rather high price led to this decrease. The US, Australia, Greece and Brazil account for 90 percent of all imports in recent years, which suggests that the oligopoly is growing in strength. In the 2017/18 season, 92 percent of imports came from these four countries.

Cotton processing

In the first decades after World War II, the Japanese textile sector initially grew rapidly until it began to decline. At its peak, the Japanese spinning sector accounted for 6 percent of global processing. In the last few seasons it only stood for less than half a percent. Spinning mill consumption has leveled off at around 54,430 tons, which also applies to the 2017/18 season.

Source: The Japan Cotton Traders Association

Excerpt from Bremen Cotton Report No. 05/06 - February 07, 2018.

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