Page 22 - 09 Cotton SA August 2016

ccording to the South African Ex-factory sales value for the spinning, From the available statistics it is clear that
Reserve Bank, South Africa's real weaving and finishing sector increased by the value of imports continue to increase.
Agrowth turned negative in the first about 16 per cent to amount to R1.9 During January to March 2016 the total
quarter of 2016, with real GDP contracting billion, while the sales of other textiles value of textile imports is R4.9 billion (an
at an annualised rate of 1.2%. increased by just under 9 per cent at R3.3 increase of 9.2% compared to the same
billion. Knitting mills' sales amounted to period in 2015), while clothing imports
Results from the latest Ernst & Young/BER R0.6 billion, an increase of around 5 per increased by 27% to amount to R7 billion.
Retail Survey suggest that the growth in cent. The ex-factory sales value of other The volume of imported cotton garments
retail sales volumes slowed further during clothing decreased by more than 12 per increased from 52 million units in quarter
quarter 2 of 2016. Semi-durable goods cent to amount to R3.2 billion. The local one of 2015 to 55 million units in quarter
retailers (e.g. textiles, footwear, toys and market for textiles and clothing is one of 2016. Imports of cotton t-shirts
sporting equipment) also reported low estimated to be approximately R17 billion increased from 13 to nearly 15 million units.
sales growth during this period. The late for the first quarter of 2016.
start to winter is mentioned as one of the During the first quarter of 2016 SA has
reasons. The other being tighter credit It is estimated that the sales of locally exported textiles to the value of R2.6
conditions and slower disposable income produced cotton fibre, yarns and fabrics billion, an increase of about 30%
growth. These retailers were forced to cut amount to approximately R28 million. This compared to the same quarter in 2015.
profit margins in order to increase sales is about 1.4 per cent of total ex-factory Clothing's exports increased by 1% to
volumes. Consumer inflation is expected sales for the spinning, weaving and R1.1 billion. During January to March
to accelerate further during 2016 as rising finishing sector. 2016 South Africa exported 3.7 million
fuel prices and increasing food inflation units of cotton garments, a decline of 5%
continue to put higher upward pressure on There is a slight decline in the utilisation of compared to the same period in 2015.
the input costs of retailers. capacity in both the textile and clothing Exports of cotton t-shirts decreased from 1
sectors. At February 2016 capacity million units to 0.8 million units.
At current values, the retail trade sales utilisation in the textile sector was less
value for textiles, clothing, footwear & than 70%, 4% less than at the same time However, when we look at the volumes of
leather goods during the first quarter of in 2015. The clothing industry's capacity cotton imports, it appears that during the
2016 amounted to R41 billion, up by utilisation at February 2016 was 78%, first quarter of 2016, compared to the
10.8% compared to the same quarter in about 1.5% lower than at February 2015. same quarter in 2015, less cotton yarns
2015. The main reason for the lower utilisation is and fabrics have been imported. South
insufficient demand. Africa imported 1.9 million kg of cotton
The average volume of production index yarn (20% less than the same period in
for the spinning, weaving and finishing Imports of cotton textiles and textile goods 2015). During the same quarter South
sector as well as the knitting sector (fabrics (including garments) during quarter one of Africa imported 3.8 million kg cotton woven
and garments) for January to March 2016 2016 is approximately R3.7 billion, up by fabrics (23% less than the same period in
showed an increase of between 3% and about 24% compared to quarter one of 2015). Woven cotton fabrics represent 9%
3.7% compared to the same quarter in 2015. However, export of cotton textiles of the total volume of woven fabric imports
2015, while that of other textiles showed a and textile goods (including garments) during the first quarter of 2016.
decrease of 7%. Clothing's index also increased by about 12% to amount to R0.4
showed a decrease of about 10%. billion.

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