#flaxlinencongress16

#flaxlinencongress16

FLAX/LINEN,

THE SMART GREEN FIBRE

FOR BUSINESS

TEXTILE FIBRES DATAS & LINEN CONSUMPTION

纺织纤维数据和亚麻消费テキスタイル用繊維のデータとリネンの消費

Hubert BRISSET

ScutcherPRESIDENT OF FESTAL

Flax & Linen Observatory: Economic Data

Frédéric DOUCHY

TraderCELC TRADING SECTION

PRESIDENT

Premisses

1. VOLUME IN TONS AT EVERY LEVEL IN EQUIVALENT SCUTCHED LONG FLAX

2. CALENDAR YEAR 1/1/2015 till 31/12/2015

3. LEAD IN TIME BETWEEN VOLUMES AT EVERY LEVEL

4. STOCK? EXCESSIVE STOCK = FALSE DEMAND

5. CUSTOM STATISTICS: NOT UNAMBIGUOUS AND INTEGRAL

FABRIC CHINA

ECONOMIC DATALAST UPDATE 18/04/16

STOCKSCHANGE OF INVENTORY EUROPE

130+FIBRE PROD. EUROPE

123 050PROD.

23 400

OTHERCOUNTRIES

CIVIL YEARIN TONNES EQUIVALENT TO LONG FIBRES

YARN EUROPE

15 000

7 000

YARN INDIA

6 000STOCKSYARN CHINA

119 300YARN

18 400

OTHERCOUNTRIES

FABRIC INDIA STOCKSFABRIC EUROPEFABRIC OTHERCOUNTRIES FABRIC JAPAN

YARN CHINA

119 300

31 800

10 000 20 000

87 500

1 800

STOCKSMANUF. OTHERCOUNTRIES MANUF. INDIAMANUF. EUROPE MANUF. CHINAMANUF. JAPAN

CONS. INDIACONS. EUROPE CONS. CHINACONS. JAPANCONS. OTHERCOUNTRIES CONS. USA

=

?

?

?

FABRIC CHINA

ECONOMIC DATALAST UPDATE 18/04/16

STOCKSCHANGE OF INVENTORY EUROPE

130+FIBRE PROD. EUROPE

123 050PROD.

23 400

OTHERCOUNTRIES

CIVIL YEARIN TONNES EQUIVALENT TO LONG FIBRES

YARN EUROPE

15 000

7 000

YARN INDIA

6 000STOCKSYARN CHINA

119 300YARN

18 400

OTHERCOUNTRIES

FABRIC INDIA STOCKSFABRIC EUROPEFABRIC OTHERCOUNTRIES FABRIC JAPAN

YARN CHINA

119 300

31 800

10 000 20 000

87 500

1 800

STOCKSMANUF. OTHERCOUNTRIES MANUF. INDIAMANUF. EUROPE MANUF. CHINAMANUF. JAPAN

CONS. INDIACONS. EUROPE CONS. CHINACONS. JAPANCONS. OTHERCOUNTRIES CONS. USA

?

?

?

=

2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

Production brute 3Pays 131 872 98 987 103 833 119 483 105 162 62 531 97 147 132 407 123 832 132 718

Ventes 3 Pays 115 135 87 892 76 670 124 933 130 212 70 811 115 382 134 238 123 527 127 879

Surfaces 3 Pays 96 563 93 610 82 490 69 917 69 700 74 422 81 172 72 695 81 292 93 300

Rendement moyen FL (base FR) 1,434 1,007 1,677 1,954 1,353 0,787 1,931 1,974 1,655 1,505

0,000

0,500

1,000

1,500

2,000

2,500

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

Lon

g Fi

bre

To

nn

es/

ha

Ton

ne

s o

r h

ect

are

s

Raw Production 3 Countries

Sales 3 Countries

Areas 3 Countries

Average Long Fibre Yield (FR)

SCRIPT

Flax/Linen Observatory : Economic Data by Hubert BRISSET, Scutcher, President of FESTAL & Frédéric DOUCHY, Trader, CELC Trading Section

Introduction by Hubert BRISSET

Within CELC FLAX & LINEN OBSERVATORY, The ECONOMIC DATA is a think-tank which gathers European business leaders strongly involved in the flax industry: Farmes, Scutchers, Traders, Spinners and Weavers. It started in 2009 – 2010, when flax trade was undergoing depression in both price and quality. In such a difficult economic context, we were all worried about our future. The goal was to find and to understand the reasons for low prices but also to come up with ways of stopping the economic slowdown. The frequency of meetings is of the order of 4 to the 6 meetings per year.

Our 5 goals are 1. To group statistics available in the industry from agricultural production to the distribution globally. Today sections culture,

scutching, spinning and weaving CELC provide reliable compilations of the activities of their members. 2. To analyze statistical pooling information collected by each stakeholder 3. To identify weak market signals to anticipate changes 4. To identify societal trends that may affect our production 5. To disseminate remarks or conclusions to all members of the European industry during flax and Linen union meetings or

CELC Board of Directors. I now leave the stage to Frédéric DOUCHY for the Flax Economic Data graph and analyzis. FLAX & LINEN Economic Data analyze by Frédéric DOUCHY Goodmorning lady’s and gentelman of the world linen sector.

I have only two slide s and would like to summarize what the ‘veille économique’ of the CELC is trying to elaborate.

The objective of this commission is to make a so realistic as possible flowchart of the production/consumption of flax in the global linen sector from agriculture to consumption.

CHART 1: FLOWCHART OF THE PRODUCTION/CONSUMPTION OF FLAX IN THE WORLD

Some remarks in advance:

1. The flow chart is only taking in account the long fibre flax, and not the short fibre chain. On top, all figures are transponed in equivalent long fibre at agricultural level. The figures at spinning level for instance are not the YARN quantity but this quantity in equivalent long fibre.

2. The chart is based on the sales – production – consumption of flax in one calender year. The chart here is based on 2015 transactions. Normally agriculture is working on crop years, from 1 July previous year till 30 June of the following year.

Figures are corrected to the calender year 1 January 2015 till 31 December 2015. The figures you will see is not indicating the same flax which is produced and sold in the same period as the flax consumed by the spinning level and the weaving level or consumed during this same period. No, we estimate that at least over the whole chain, there is about one year delay. So to express it more clearly: the flax which you see sold during the calendar year 2015 is most likely sold in the shops during the spring or summer of the year 2016 + 2017.

3. The lead on agricultural offer on increasing or reducing demand at distribution level can in this way be very late in reaction and have as consequence in too big changes of prices in the positive direction or the negative direction. The fluctuation of prices at agricultural side can be very “nefast” in the development of the market but on the other hand also create a very late reaction of the agricultural side on the evolution at consumption level creating too much stock and in this way generate a collapse of prices of raw material. Neither of both is good for the long term and thus we should predict more in advance to have enough fibre available that prices are not increasing too high and the opposite to reduce offer at time to avoid that prices are falling too low.

4. A very important remark is the factor stock. Sales, or production can be done for stock purposes and in this way create a false demand. This can happen on all levels of the flowchart. We have only an idea of stock level at the agricultural level, not any more at spinning, weaving or distribution level. On the other hand, we suppose that at distribution level all stock is every year liquidated by solden sales of by low end marketplace sales.

5. On spinning level and Weaving level, we have some information about custom statistics. This information however does not cover at all the complete consumption of flax fibre since the categories are either vague on the composition (containing more than 85% of flax or less) and especially vague on weight per meter for fabrics. For knitting there is no specific code. On garments, the linen content is even not existing. This information is thus too flu and unreliable to compose the flow chart per country.

5301 10 00 FLAX fiber - raw or retted

5301 21 00

FLAX fiber broken or scutched but not spun

5301 29

00 FLAX fiber - hackled or otherwise processed but not spun

5301 30

00 FLAX tow and waste

5306 10

10 FLAX YARN with a linear density of >= 833.3 Decitex <= Metric number 12

5306 10 30

FLAX YARN with a linear density of 277.8 to 833.3 Decitex > Mn 12 to Mn 36

5306 10 50

FLAX YARN with a linear density of < 277.8 Decitex > Mn 36

5306 10 90

FLAX YARN put up for retail sale

5309 11 10

Woven fabrics of FLAX containing >=85% flax by weight – unbleached

5309 11 90

Woven fabrics of FLAX containing >= 85% flax by weight - bleached

5309 19 00

Woven fabrics of FLAX containing >= 85% Flax by weight - printed or dyed

5311 00 10 Woven fabrics of RAMIE

Nevertheless, we tried with our commission to make a first draft of flowchart which I propose to explain level by level.

1. We start with the agricultural offer

Europe PRODUCED in 2015 123.050 tons of long fibre and the variation on stock was 130 tons so in total the sales were from Western Europe (France, Belgium and the Netherlands) 123.180 tons. We estimate the production of other countries at 23.400 Tons mainly from Egypt, Biella Russia and China. It would be interesting to have better statistics from these three countries.

The quantity sold on world level is then 146.580 tons.

2. Flow from Agricultural to spinning level There are mainly three spinning countries where the mass of fibres is sold to:

o To the European spinning mills: 15.000 Tons o To the Chinese spinning mills: 119.300 Tons o To the Indian spinning mills: 6.000 Tons o Other spinning mills in the rest of the world are consuming approximately 18.400 tons. These spinning mills are

located mainly in Egypt, Biella Russia, Bangladesh, and other countries. o In total the consumption of flax in the spinning mill was during 2015 158.700 Tons

From this figure we can conclude that the Spinning mills destocked 12.120 ton of equivalent long fibre (or in raw material flax or in yarn).

3. Flow from Spinning to Weaving level

The further we go in the cart the less known the figures are and thus also the more unreliable.

• The Europe spinners are mainly selling to European weavers. • A small part is the high quality end is sold to Japanese weavers and also a part is sold to weavers in other countries.

We have no exact figures. • The Chinese spinners are selling the major part of their production to Chinese weavers. We estimate the quantity at

87.500 tons (from the 119.300 produced raw material). This represents 73,35%. The other 26,65% is sold mainly in the following countries:

o 10.000 Tons to Europe. I repeat that 10.000 tons is the equivalent of yarn to raw material long flax and not the quantity in yarn. We estimate that you need 2 kg of long flax to make one kg of yarn.

o 20.000 Tons to India o 1.800 Tons to Japan and other countries

• The Indian spinners are selling mainly to local weavers: 6.000 tons • Finally, the spinners of all other countries are mainly selling to other countries than Japan, China, Europe and India • Stock levels at weaving are not known and would be great if we can get more information about this from the

different actor on the weaving level 4. Flow from Weaving to Distribution

• The arrows between these two levels are in size according to the importance in tonnage. We have no quantity indications. The colour is indicating from what Weaving country the supply is.

• We have no information about where the garments are produced, so we have eliminates this level and suppose the fabrics are consumed directly or indirectly through garment manufacturers in the markets indicated on the flow chart.

• We analyse the consumption as follows: o USA CONSUMPTION MARKET: we estimate that USA remains the biggest consumer of linen

§ China is the biggest supplier of the United states market § Also for Europe the USA remains an important export country

§ However, we estimate the consumption of furniture 50% of the consumption in the USA, 25% clothing and 25% house linen

§ We indicate America as a mature market and we do not see growth anymore in the American market. This is the meaning of the ‘equal’ sign

o EUROPEAN CONSUMPTION MARKET § The European market is mainly supplied by China, Europe itself and a small part India. § We estimated the consumption market one third clothing, one third house linen and one third

furniture. § In 2015, the consumption of linen in Europe was still growing, therefore, we indicated a green up arrow.

On the other hand, we can also indicate Europe as a mature market where the growth of linen is rather limited. In this market the consumption has to be kept by promotion campaigns.

o INDIAN CONSUMPTION MARKET § The Indian weaving is selling mainly in their own market but is also selling a small part to the European

market. § The Indian consumption market is also consuming a part of Chinese imported fabric (or garments) § Also Europe is exporting fabric or finished goods to India (we estimated a small part of there

production). § The consumption of linen in India is estimated half for the clothing industry, 25% for house linen and 25%

for furniture (curtains, table linen, .....) § In 2015 the consumption of linen in India was still growing, therefore we indicated a green up arrow.

India is during the last years the market with the strongest growth and we estimated that India has seen growing the consumption of linen year after year with growth with two digits.

o JAPAN CONSUMPTION MARKET § The Japanese market is supplied mainly by the Japanese weaving itself and then for a small part by

China and Europe § We estimated the consumption for two thirds in clothing, one sixth in furniture and one sixth in house

linen

§ In 2015 the consumption of linen in Japan was still growing although the market can be considered as a mature market. Therefore we indicated a green up arrow

o CHINA CONSUMPTION MARKET § China is still a very young market for the consumption of linen where there is a lot of potential on the

condition of intensive promotion campaigns § We estimate 70 % of the consumption is in clothing, 15% in house linen and 15% in furniture

o OTHER COUNTRIES: There is for sure also consumption in South Korea, Canada and South America (mainly Brazil), even in African countries and Russia. Today these countries remain although very limited in consumption.

o If we dare to give an indication of the importance of consumption per country/continent, we would point it out as follows:

§ USA: 40% § Europe: 30% § India: 15% § Japan: 7% § China: 3% § The rest of the world: 5%

As indicated at the start, the flow chart is a very first draft and it would be very interesting if all actors in our flax chain would participate in improving the figures of this chart. We are all here present as one flax family and the common interest is to make grow our business and to create a well spread margin over the whole chain of the production and consumption. Exchange of economical information can help and also a world wide common promotion effort.

CHART 2: Evolution of the sowing out and production of long fibre in Western-Europe (France, Belgium, the Netherlands)

The yellow line is indicating the number of hectares sown out in the three flax growing countries France, Belgium and the Netherlands. The number of hectares went down from 2006 with 96.563 hectares to the lowest point in 2010 with 69.700 hectares. In 2015 the sowing out was 93.300 Ha, which indicates that the agricultural side of the chain is reacting on the increasing demand of the spinning.

The red line is indicating the average productivity of the long fibre per hectare. You will see that nature has a very important role in supply of fibre. 2011 was a very dramatic crop with in average only 787 kg long fibre per hectare. Crop 2013 on the contrary was an exceptional productive crop with 1.974 kg long fibre per hectare (remark that this is more than double of 2011). The increase of number of hectares between 2013 and 2014 (+ 12%) is however destructed by 16,2% less fibre per ha. Nevertheless the scutching mills have increased the number of hours production and there was still 4 months of stock of straw to compensate this lack of fibre so that the difference could be compensated. In 2015 there was an increase of number of hectares of 14,7%), however the quantity of fibre per hectare went down with 11% in comparison with 2014. Nevertheless, the scutching mills have increased the production capacities to match as much as possible the demand.

The conclusion is that the agricultural supply has tried to follow the increasing demand, but that factors which are out of their control and mainly directed by nature are sometimes overruling the intensions. The whole flax chain has to take this in consideration and that stock is an important factor to bridge bad crops, which in history regularly happens.

Frederic Douchy

Conclusion by Hubert BRISSET Everyone in our industry, strengthened by links between each and every of its members, has to share their information to satisfy the consumer, to have a profitable business, and to increase sales. We need worldwide reliable statistics for each company, each professional profile, each region and each type of final market. Outside of Europe, there may be other similar think tanks in the sector with which it would be interesting to share. We guarantee confidentiality and are committed to sharing information with organizations who will wish to do the same with us. Thank you for your attention

Hubert BRISSET & Frédéric DOUCHY

for The Flax & Linen Observatory

“To make the right decisions,

we need reliable economic data.”

#flaxlinencongress16