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
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.
• 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
• New quotas. Garments imported from China are now subject to
quotas in the European Union (EU) and the United States
• Promotion down. Virtually no global generic silk promotion
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.
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.
• 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
• 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
• 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
• 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.
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
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
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
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
• 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
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
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
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