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    Silk: A Tradition with a Future?

     

     
     
    Issue 1/1999
    © International Trade Centre, International Trade Forum - Issue 1/1999

    Formerly a luxury trade, the silk industry is at a crossroads. New sandwashed silk brought a wider range of affordable silk products within the reach of millions of consumers during the 1990s. Competition from high-tech synthetics has eaten away market share. Raw silk prices have plummeted by half, to the point that they threaten the sustainability of this industry.

    Traditional producers are cutting back on labour-intensive silk production, as urban industries lure farmers from a business in which incomes dropped radically in recent years. Meanwhile, millions of livelihoods are at stake, especially in rural areas, for this traditional and environmentally sustainable product.

    In 1988, this magazine published its first article about silk and silk markets. At the time, one could readily encourage newcomers in developing countries to start sericulture and silk production-under certain conditions-in order to get involved in an expanding trade. Ten years later, the market has changed dramatically for the silk sector in developing countries.

    In 1988...

    • Exclusive, and for women only. Silk was a luxury product for Europe and North America, destined only for those who could afford its exclusivity and high price. No silk products in large quantities were available to customers in medium price brackets. About 90% of silk products available in Western markets were meant for women only.

    • Rising silk prices, increasing production. The world market raw silk price was US$ 45 per kilo and would climb to US$ 51 the following year. China was the major producer (about 60% of the total of 67,000 tons). China had been moving steadily towards processed silk products; in 1980, 49% of the exports were raw silk, and in 1988 this had declined to 25%. In terms of sheer production value, China's lead was followed by India, Japan, the USSR, Brazil and the Republic of Korea.

    • Consumers. Asian countries-especially Japan, India and Thailand-were also significant silk consumers. Japan was the world's largest consumer.

    • No restrictions. No quotas restricted international trade in silk and silk products.

    • Some export promotion. Some generic silk promotion activities in Europe were conducted by the European Commission for the Promotion of Silk.

    ... And today

    • Silk democratized. Sand-washed silk made its debut in the early 1990s in most Western markets. Silk garments were sold at the height of the boom not only in department stores, but in supermarkets and even in coffee shops. Today's silk products are not just for women, but also for men and children.

    • Price dropping and production centres abandoned. The world market price for raw silk was about US$ 26 per kg at the end of 1998, having dropped about 50% from its high in 1989. China remains far and away the largest producer (70% of the total of some 72,000 tons). Japan's raw silk production slipped to about a quarter of its previous level (from 6840 tons in 1988 to 1902 tons in 1997). The Republic of Korea's fall was even more dramatic, from 1343 tons in 1988 to 110 tons in 1997. Silk production is declining steadily in Brazil, hampered by its dependency on Japan.

    • Consumption down. With the sandwashed silk boom over and continued competition from other fibres, silk consumption is down. Silk producers in Asia, such as India and Thailand, remain significant consumers. Japan is still the largest consumer of silk and silk products. In China and Viet Nam, consumption is growing. Yet the overall regional consumption is down, the pace slowed by Asian recession, and by European processors opting for competing fibres.

    • New quotas. Garments imported from China are now subject to quotas in the European Union (EU) and the United States markets.

    • Promotion down. Virtually no global generic silk promotion activities remain.

    Silk's humble origins

    Silk has been linked with sought-after creations by the biggest names in haute couture. Yet, many admirers of spectacular garments shown on the catwalks of London, Milan, New York and Paris are unaware of the modest origins of this illustrious textile. The fact that the raw material comes from rural areas in developing countries and transition economies is in stark contrast to the affluent environment where elegant garments of famous fashion houses are presented to a select few. Similarly, readers might wonder why ITC is involved with something as luxurious as silk in its work to help developing countries to improve their exports.

    Rural village production

    In fact, today's largest producers and suppliers of raw silk and silk yarn are in Asia, with the notable exception of Brazil. (There used to be raw silk production in some Mediterranean countries, but it gradually disappeared.) A major reason why ITC stays involved is because sericulture and silk production are labour-intensive at the village level, employing both men and women at all stages of production. In China, this sector occupies some 20 million farmers, as well as 500,000 people in the silk processing industry. In India, sericulture is a cottage industry in 59,000 villages. As one of the most labour-intensive sectors of the Indian economy, it provides full and part-time employment to some six million people. In fact, this sector has been identified as a sector of the Indian economy with strong potential to create jobs.

    Environmentally friendly

    Silk is also environmentally friendly. Silk is produced with few chemical fertilizers and practically no insecticides. Primarily made of proteins, it is close in composition to human skin, making it extremely comfortable to wear.

    Today's challenges

    • New competition. New synthetic fibers are ever-more sophisticated. They look and feel like silk, but are easier to care for. Viscose and polyester have taken some of silk's market share.

    • Changing image. While the boom for sandwashed silk is past, its introduction damaged silk's luxury image. No international promotion campaigns are addressing this issue, reflecting the lack of cohesiveness among suppliers, traders and buyers in the industry.

    • Regional slowdown. The fast-developing economies in Asia had been showing an increasing interest in silk products, as the standard of living rose steadily. Recent economic turmoil in southeast Asia, however, has been reflected in a decline in sales.

    • Dismantling production centres. Silk production centres are closing. This trend is well underway in Japan and the Republic of Korea, due to the industrialization of the two countries. Millions of families in rural areas in China, Thailand, Brazil and other countries may now face the socioeconomic choice of whether or not to continue producing silk. If farmers turn from this activity for a more lucrative type of farming, the industry cannot easily recover. Working with silkworms requires strict discipline, learned by tradition through generations.

    Promoting silk

    A generic silk promotion campaign could be a solution to the challenges in the industry today. Currently, there are no concerted efforts from silk producers, converters and traders to improve the image of silk in international markets. An example of what could be done can be seen in the European Union's campaign to promote linen as fashion material. In the past, linen was mostly used for home products such as tablecloths and napkins. Thanks to a decade-long campaign, linen has taken its place among other fibres used in fashion.

    A campaign should aim to reposition the image of silk, capitalize on new technologies and changing market demands and to encourage silk production. As campaigns require both coordination and investment, and may take several years before they have an effect, an effective approach may be to work through industry associations in order to craft national campaigns in the largest consumer markets.

    Another alternative may be for the silk industry to work with major retailers in Europe and the United States. Ideally, an industry-wide action plan will have the most impact.

    Based on ITC's analysis of recent trends, generic silk promotion campaigns should contain the following elements.

    The image of silk

    Silk should be marketed as an environmentally friendly, luxury product.

    Demand for silk blends and knitted silk

    • Silk blends are one way to answer the challenge from synthetic fibres. Lately, silk has been blended with other fibres, such as cotton, linen, wool and even polyester. Developing country silk producers have not yet progressed very much in this field. They need to develop their research and technology to offer competitive new products.

    • Knitted silk products are an answer to the market demand for comfort, expressed during the sandwashed silk boom. Consumers, especially in the United States, were attracted by these garments that were soft, comfortable, casual and easy to maintain. Knitted silk has the advantage of being a casual, yet "quality" silk product, and can fetch attractive market prices. China has made progress in this product category. After introducing silk thermal underwear for outdoor living, other types of knitted silk garments are now being exported, such as T-shirts, camisoles, polo shirts and sweaters. This trend should be followed, because it may have a reasonable growth potential for a number of silk producing developing countries.

    New product categories

    For instance, there is scope to expand the role of silk fabrics for interior decoration.

    The role of Asia

    In the medium term, the role of the Asian markets will be vital. Asians will continue to be consumers, and it is likely that growth will resume in this area. It is important to safeguard their role as producers in light of the challenges facing them today.

    Recognizing this, the World Bank is rehabilitating the sericulture and silk production industries in Bangladesh. Since the country has long used silk fabrics for saris (like in India), greater silk production in Bangladesh is aimed at reducing raw silk imports, as well as creating a new indigenous raw material for garment exports.

    ITC acts with silk industry

    For 13 years now, ITC has worked with firms, national governments and industry associations to promote silk and silk products in silk-producing developing countries, particularly in Asia. ITC has closely monitored world production and trade in silk goods, working with key industry players such as the International Silk Association, the International Sericulture Commission (both in Lyon, France), and relevant organizations in developing countries, including the China National Silk Import and Export Corporation, the Central Silk Board of India, the Indian Silk Export Council, the Thai Silk Association and others.

    ITC projects gave an opportunity to local silk industries, particularly in China, India, Malaysia and Thailand, to develop products and markets. ITC provided technical assistance for silk fabric dyeing and printing, design, pattern-making and grading, cutting and other silk production techniques. Participating companies were introduced to new markets and customers through market contact missions in foreign markets. The message was always the same: move towards silk processing and finished products, in order to improve value-added, and stay competitive.

    Presently, ITC is working with producers of knitted silk products in the Democratic People's Republic of Korea, in order to help the country launch a new knitted silk goods collection in European and Japanese markets.

    ITC also publishes a biennial Silk Review, which surveys international trends in production and trade. First published in 1988, it has been updated four times. Silk Review 1997 is available free to developing country readers and sold at US$ 40 for readers in developed countries. Silk Review 1999 will be published later this year.

    Last year, ITC produced a film "Silk: Tradition with a Future?" with the United Nations Development Programme (Azimuths series). This nine-minute documentary highlights sericulture and silk production for export in developing country villages, to show that this activity continues despite the increasing industrialization of the traditional silk producing countries.

    A copy of this film is available to organizations in the silk industry that develop generic silk promotion campaigns.

    Antero Hyvärinen is ITC Senior Market Development Officer on textiles and clothing, and can be reached at the following e-mail address: antero@intracen.org