China is the largest producer and exporter of both synthetic1 and cotton fabrics, used to manufacture apparel and home textiles. China’s recent cotton fabric shipments have trended lower at an average 2.0 million metric tons per year compared to roughly 9.0 million tons for synthetics. This is mostly due to lower relative prices for synthetics and a decade of robust growth in China’s production capacity. The U.S. Uyghur Forced Labor Prevention Act (UFLPA) and changes in consumers’ preferences have also played a role.
Since China is the largest producer of both synthetic and cotton textiles (i.e., yarn and fabric), the country has a significant impact on fiber production and consumption trends. According to the International Cotton Advisory Committee’s (ICAC) 2023 report World Textile Demand, the global consumption of synthetic fibers climbed each year since 2008; meanwhile, 2023 global cotton consumption is forecast at roughly the same level as it was 15 years ago. China is by far the largest contributor to the growth in synthetic fiber production to meet rising global consumption.
China’s increasing domestic supply of synthetic yarns (which are woven or knitted into fabric) and their competitive price relative to cotton yarn has also helped drive greater demand.2 The price of polyester yarn relative to cotton yarn has fallen over the past decade. For example, the price of Chinese polyester yarn averaged 72 cents per pound last month, 76 cents lower than the cotton yarn price of 148 cents. Just 5 years ago, the premium for cotton yarn was roughly 60 cents, significantly lower relative to levels witnessed in the last 3 years. Persistently higher cotton yarn prices relative to polyester is driving downstream participants in the textile supply chain to opt for the less expensive synthetic inputs.