Trace production costs in the primary textile industry

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The latest edition of the ITMF’s International Comparison of Production Costs (IPCC) has been released. The report measures the manufacturing costs of different textile products in the primary textile industry broken down into various cost elements at each stage of the textile value chain.

The 2021 edition adds Central America and Mexico to the historical cost analysis in Bangladesh, Brazil, China, Egypt, India, Indonesia, Italy, Republic of Korea, Pakistan, Turkey , the United States and Vietnam. Cost factors, manufacturing costs and total production costs are available for different textile products in the segments of spinning, stretch texturing, weaving, knitting and finishing.

For example, the publication reveals that producing one yard of woven fabric from 1-1/8″ cotton in a continuous open weave (COW) process cost $1.36/m on average in 2021 (see Figure 1, range between 1.11 UDS/m in India and 1.91 USD/m in Italy).

Spinning the yarn needed to produce that yard of finished fabric costs an average of 19% of the total fabric production cost worldwide (range between 15% in Korea, Rep. and 22% in Central America). Weaving this yarn adds an additional 19 percentage points (pp) on average to the total cost of production of the fabric (range between 14 pp in Egypt and 26 pp in Italy). Finally, finishing this meter of fabric increases the final production cost by 31 pp (range between 26 pp in Egypt and 33 pp in the United States, Turkey and India).

The study further reveals that the average cost of raw materials needed to produce this yard of woven fabric was 31% of the cost of producing the fabric. It was relatively cheaper in Italy (22%) and most expensive in Egypt (40%).

Figure 2: Manufacturing cost of spinning ring/NE30 (USD/Kg).  © ITMF

The publication also shows that Mexico and Central America are comparatively more dependent on the cost of energy to spin NE/30 yarn than the other countries in the panel (see Figure 2). The cost of electricity represents respectively 28% and 25% of manufacturing costs in the two countries. In contrast, the United States and Egypt benefit from relatively low energy costs (respectively 10% and 11% of manufacturing costs).

Dependence on labor costs is very high in Italy and the USA with shares of 40% and 38% of manufacturing costs. This cost element accounts for only 2-3% of total manufacturing costs in India, Pakistan, Bangladesh and Egypt. NE/30 yarn mills in Egypt, Central America and Pakistan also face high investment costs (more than 40% of their manufacturing costs). The cost of capital is much lower in Italy and the Republic of Korea, where it reached 21% in 2021.

Learn more about this in-depth study on www.itmf.org/publications.

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