Although Prices were Rising, China's Denim Exports Jumped in First Half

China's exports of denim fabrics substantially rose in the first half this year, according to official data that are reproduced below. Sales to Hong Kong's denim traders sharply increased while direct exports to Korea, Russia, Cambodia and India also soared. Prices were rising at the same time, in line with more value added content.

China's exports of cotton denim fabrics (HS 520942) were up 17.80% in volume terms in the first six months of the year to 193 million square meters.

Shipments even grew 36% at the same time to US$330 million, reflecting a 6% increase in average price to US$1.71 per square meter.

China's exports to Hong Kong surged 25% in volume terms, now accounting for 38.80% of total shipments of cotton denim fabrics.

Higher demand within China

A large part of those fabrics shipped to Hong Kong usually come back to the mainland where they are used by apparel factories.

The sharp rise in first half sales to the SAR therefore reflect the important share of Hong Kong's trading houses in the denim business in China.

With the end of quotas on denim apparel, demand for denim fabrics was obviously stronger in the first half in the PRC.

Direct sales to other destinations were also sharply up in the period, according to official data, partly due to a rise in clothing production in these countries or a fall in domestic output.

Shipments to Korea were up 62% over the period, as a clear sign of receding Korean denim production.

By contrast, a 132% jump in exports to Russia more probably reflects a rise in Russian apparel output.

Other denim suppliers than China may also have lost market shares, such as Taiwanese producers.

Skyrocketing sales to India

China's exports to Cambodia were up 51% in volume terms while shipments to India and Turkey skyrocketed at the same time.

Shares of these destinations in total denim exports from China are extremely low, however, with Chinese producers only having a very small share of these domestic markets.

Prices rose in line with better quality and more value added content. In China like elsewhere, the quality of fabrics is improving and is being more sophisticated.

The higher-valued fabrics were shipped to Japan at US$2.69 per square meter while cheapest products were bought by Bangladesh (US$1.54), Russia (US$1.49) or Mexico (US$1.31).