Polish Market Report and Forecast
March 16, 2009 Very adverse trends still continue in the Polish textile market since they started in 2005 when the WTO cancelled the import restrictions for textiles and clothing from China. Polish spinning mills have encountered increasingly smaller numbers of orders for cotton weaving and knitting yarns since 2005. The reason for this is continuing imports of very cheap yarns, fabrics, bed linens and clothes to the EU market.
A liberal policy of the European Commission allows European manufacturers who are not able to compete with other countries to apply forbidden subsidies for their manufacturers and exporters. Polish yarn, fabrics and knitted fabrics manufacturers are forced to match the prices of their products with a very low price level of the Far Eastern and Chinese competitors. This is why the rate of return for the Polish cotton sector has decreased to zero percent or lower, forcing the industry to reduce costs by cutting employment or limiting production volume. Even if the Polish and European cotton industries are ready to face the fair competition, they will not be able to cope with the unfair trading practices applied by some countries, inattention to intellectual property rights, international environment protection regulations and labor law if radical changes in EU administration policy are not implemented.
Looking at the Numbers
In 2007, cotton imports and consumption in Poland decreased by 25%. In 2008, the drops were even greater and will most likely exceed 35%. In 2007, a considerable 30% decrease in cotton yarns production was noticed, though certain areas of production remained strong. Data from the first half of 2008 shows that the decrease in cotton yarn production will exceed 40%. Contrary to the previous years, the production of cotton woven fabrics, bed linens and bathroom terry products will also drop.
In spite of adverse conditions for manufacturers, the knitting sector, existing in the Polish textile market for just a few years, was less severely affected by production drops when compared to other branches. Thanks to an increasing domestic demand and exports, a part of the sector has even increased its production. Hosiery enjoyed a particularly large increase, with as much as a 22% jump in 2007; this increase continued through 2008.
Sustainability Demand
During the final few months of 2008, we noted an increased interest in yarns and fabrics made with certified organic cotton from some Polish manufacturers. In spite of the promotions of sustainable production in Europe, supply of a wide range of these products is still limited. The interests in pure cotton emblems have intensified, too, including the Pure Cotton Emblem and the International Cotton Emblem. The Gdynia Cotton Association is granting licences for these emblems to companies fulfilling the requirements set out by the regulations of these emblems. We promote and support these ecological actions as one of the forms of improving the competitiveness of Polish manufacturers confronted with imports from Asia.
Labelling cotton products with these emblems ensures the customers that the product being purchased is made of natural cotton fiber. Although consumers understand the meaning and significance of eco-friendly products, the main decision-making factor used in choosing textiles is in fact whether the product is natural or not. Consumers strongly prefer natural fibers in textile goods and clothing, and they are willing to pay more for natural fibers, compared to man-made fibers.
Future Innovations
We predict that in the coming months the volume of production of non-woven products and technical fabrics will increase in Poland and new product designs, featuring the most modern and advanced technologies, will be implemented. We pin our great hopes on the Cluster of Advanced Technologies of the Textile-Clothing Industry which has been active now for a year, with the Gdynia Cotton Association acting as its founder member. A direct cooperation of the industry with scientific institutions within the Cluster should result in notable benefits.
We are convinced that every segment of the Polish textile industry must be internationally competitive in order for the whole of it to expand, while quality, product innovation, reliability, demand responsiveness, market proximity, quick turnover and preferential tariffs are becoming increasingly important competition factors.
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