Fibres From Around the World

Spend Matters would like to welcome a guest post from Nick Peksa, of Mintec Ltd.

As you know, I was in Cairo last week speaking at a Middle Eastern oils and fats conference. During some downtime I spent a bit of time exploring Cairo and two things struck me: firstly, 22 million people and 5 million cars with no road markings makes getting anywhere problematic. The second thing was how proud the Egyptians were of their textile industry (before all the corruption in the government). So what is happening in the world of fibres?

Jute & Cotton
On the back of new market information, the price of jute at origin has suddenly decreased. There are expectations that the production of Jute will increase by around 10% next season. Other factors that have also helped the cause are that some West Bengal mills may be reopening and an External Market Assistance scheme has been reintroduced by the government. Compliance is currently low; however the offering of a governmental subsidy will hopefully encourage more mills to gain their national and international quality certifications.

On the other hand, cotton prices are starting to recover again in Asia, mainly due to some adverse weather conditions which may affect production. There are fears that rains have damaged the crop in Pakistan, fears that China's reserves of stocks have been sold, and finally downward revisions of the US crop. All in all not a good place to be for cotton buyers.

Wood Pulp
Global demand for lumber in early 2011 is reported to have grown by about 20% on the same period in early 2010. China continues to be the main driver of global demand for lumber, although exports to Japan to help reconstruction following the devastating earthquake and tsunami earlier this year are also continuing to pick up pace. The price adjustments to pulp have been equivalent to about 5% of timber value, hopefully this reduction will help with the current economic situation in the pulp and paper industry.

PET -- Plastic
After several months of decline, global prices of PET rebounded in August. The prices mainly increased on stronger demand for polyester fibres from China which affected all global markets for all types of PET. Prices are expected to carry on increasing in the next couple of months as we enter the peak season for textiles (September and October). The price increases have mainly been based around higher feedstock costs and limited availability of PET fibre over summer.

- Nick Peksa, Mintec Ltd.

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