The Hindu Business Line : Asia drives world fibre consumption

TRADITIONALLY regarded as a source of exports, especially of textiles, to the developed world, Asia is slowly but surely becoming an important consumer because of consistent growth in incomes and population that drives demand. China and other developing countries in the Asian region are large producers of cotton textiles.

GDP growth in Asia, excluding Japan, averaged 6 per cent during 2003-04, more than twice the rate of US growth. With domestic prices for services and other non-tradable goods low, urban consumers in Asia have spending power much higher than that implied by national level per capita GDP estimates, the Economic Research Service of the US Department of Agriculture (USDA) observed in a recent report.

Consumption growth potential in Asia may be gauged from the fact that fibre consumption totalled a mere five kg per capita in developing Asia in 2000, compared with 21 kg/per capita in developed countries, and 33 kg in North America.

Between 2000 and 2004, while world fibre consumption increased by 25 million bales (480 pounds per bale), the largest gain was in developing Asian countries where household consumption expanded by more than 8 million bales, followed by Western Europe (4.9 million bales) and North America (4.5 million bales).

During the period, share of cotton in global fibre consumption fell marginally from 40 per cent to 39 per cent, which contrasts with the steep fall seen during the decade of the 1990s from 50 per cent in 1990.

Between 2000 and 2004, most of the world's increase in household cotton consumption occurred in the developing world. It is inferred from data for total fibres that Asian markets accounted for as much as 60 per cent of developing world gains.

Anecdotal evidence supports the assumption that developing Asia's cotton consumption grew by more than 3 million bales of the 5.3 million bales growth seen in developing nations worldwide

While a shift in Asia's role in the world economy from global exporter to global importer is probably not yet foreseeable, its impact on consumption cannot be ignored, the reported noted. World fibre consumption has grown at a 3.1 per cent rate over the last five years, slightly faster than the 2.6 per cent growth rate realised during 1980-2004.