whoops, my mistake. technically it was a NATO bombing, not american, so i spoke incorrectly.
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Saturday July 14, 9:37 am Eastern Time
Strong Dollar, Imports Hurt Textile Trade
biz.yahoo.com
By Rene Pastor
NEW YORK (Reuters) - A blizzard of plant closures, bankruptcies, ballooning apparel imports and a strong dollar are bleeding the U.S. textile industry and analysts see no end in sight to the hemorrhaging, analysts said. Falls in cotton futures prices in New York to levels unseen since 1986 have failed to light a fire under demand, and experts said a wrenching consolidation can only gather steam in the years to come.
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The situation is aggravated by the severe slowdown of the U.S. economy and a strong dollar, which makes it more costly for overseas consumers to buy U.S. cotton. Hahn predicted the number of factory closings can only rise as a result. And the bleeding has severely deflated U.S. cotton consumption. In its July production report, the U.S. Department of Agriculture (USDA) forecast U.S. cotton mills will buy 8.50 million (480-lb) bales in 2001/2002. A few years back, consumption was more than 10 million bales.
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Apparel imports have also seized an increasingly larger share of the massive U.S. textile market. Anderson said the American market uses around 21-22 million bales a year. Mills also hurt themselves badly by locking in their cotton purchases at levels closer to 60 cents earlier in the year, before prices dove to 15-year lows in late spring. At the New York Board of Trade, cotton for December delivery closed at 42.70 cents a pound Wednesday. In May, the spot contract bottomed at 37.50 cents, the lowest since prices flirted with 30 cents in 1986. ``U.S. mills are hurting greatly because most of them fixed their cotton at higher prices and cannot take advantage of current lower prices in the near months. Everybody has inventory based on higher price fixations. Before they can take advantage of lower prices, this inventory has to be sold,'' said Frank Weathersby of Affinity Trading in Memphis, Tennessee.
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Cotton industry watchers believe the plethora of U.S. government farm programs almost guarantees American farmers will never cut back on producing too much cotton. ``Even with prices this low, a farmer in Texas can collect insurance payments. All he has to do is stick the plant in the ground and he can opt for minimal inputs,'' one said.
Despite abysmally low prices, USDA believes U.S. cotton output will hit 19.2 million bales this year, the second largest on record. In 2000, 17.19 million bales were harvested. Meanwhile, Bruce Raynor, the president of the Union of Needletrades, Industrial and Textile Employees in New York, said in a newspaper interview last Sunday that foreign sweatshops and free trade have been disastrous, and laid some of the blame for the industry's woes on U.S. retailers. He told the Charlotte Observer his union will be launching a campaign this summer against several retailers which use overseas plants to manufacture ``their products under deplorable conditions.'' |
