Released on = June 1, 2007, 10:45 pm

Press Release Author = Bharat Book Bureau

Industry = Marketing

Press Release Summary = World man-made fibre production continued to rise in 2006
but at a slower pace than in the previous year. In 2006 output was up by 3.9% to
37.5 mn tons following a 5.8% hike in 2005.

Press Release Body = Global Trends in Fibre Production, Consumption and Prices,
March 2006 Edition

World man-made fibre production continued to rise in 2006 but at a slower pace than
in the previous year. In 2006 output was up by 3.9% to 37.5 mn tons following a 5.8%
hike in 2005. Moreover, the 2006 rise was sustained entirely by strong growth in
China. Synthetics accounted for most of the increase-and almost all of the increase
in synthetics was due to growth in polyester. But cellulosics were also up, by a
healthy 10.0%.

Prices of synthetic fibres and fibre intermediates grew significantly in the first
four months of 2007. The rises were much faster in Asia than in Europe, and were
driven by a gap between supply and demand-rather than the increases in crude oil
prices which have driven up prices in the recent past. In fact crude oil prices were
actually down in the first four months of 2007 compared with the corresponding
period in 2006.

Output of natural fibres rose by 1.6% in 2006 after a 5.8% fall in 2005. The rise
was driven by a 1.7% increase in cotton output-following a 6.2% fall in 2005-as
growers responded to the firming of prices. But the decline in the wool clip
continued. As a result of these trends, the share of natural fibres in total fibre
output fell from 41.9% to 41.4%. The cotton price stabilised in 2006 in the high 50
cents/lb range after recovering from a low point in December 2004.

Looking ahead, cotton demand in the 2006/07 season is predicted to rise by 4.4%,
mostly due to higher usage in China and South Asia. Output, meanwhile, will be up by
2.6%, according to the International Cotton Advisory Committee (ICAC). But cotton
buyers remain resistant to price increases and, with no major changes in supply or
demand, prices will remain steady. According to the ICAC, the cotton price will
average 62 cents/lb in 2006/07-4 cents/lb more than in 2005/06. It will remain at
that level or slightly above for the 2007/08 season. Wool prices rose sharply in the
latter part of 2006 and in early 2007 due to concern over the continuing effect of
the drought on the Australian clip-combined with rising demand at the retail level
and a consequent increase in orders in the wool textile industry. But while the
stock position is tightening, there is little prospect of a strong recovery in
demand. Global demand is being sustained largely by consumption in China. Elsewhere,
demand is being depressed by restructuring in the textile industries of
industrialised countries. The outlook is for little further rise in prices. Although
stocks are expected to fall slightly, the balance between supply and demand is
likely to be maintained in 2007/08.


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