Table of Contents

I. INTRODUCTION
II. POLYPROPYLENE
III. SISAL AND HENEQUEN
IV. ABACA
V. COIR
VI. MAIN PROBLEMS AND DEVELOPMENT ISSUES

I. INTRODUCTION

1. These projections suggest considerable diversity in the prospects for the three fibres. Demand for sisal and henequen, the group accounting for the largest value of production and trade among these fibres, is expected to continue to contract, while abaca is expected to maintain a strong hold in the market. Consumption of coir is likely to continue to expand, but this expansion is heavily dependant on domestic consumption in India while exports to developed countries are contracting. Some potential exists for the development of non-traditional outlets which could modify the rate of decline in the markets for the various fibres.

2. The projections for hard fibres are based largely on the assumption that recent trends observed in the markets for these commodities will continue. It is likely that supplies of polypropylene will continue to be ample, leading to some further weakening, in real terms, of polypropylene prices. It is assumed that, in the face of continuing competition from synthetics, prices of hard fibres will also weaken further in real terms.

II. POLYPROPYLENE

3. To varying degrees, hard fibres are subject to competition from synthetic substitutes, particularly in their traditional applications. Most notably perhaps, much of the market for sisal agricultural twine has been lost to polypropylene, although sisal still has a significant market share in the United States and retains a small presence in Europe. The outlook for production and prices of polypropylene is therefore of direct concern to the future prospects for the hard fibres. Global production capacity of polypropylene is expected to continue to expand during the coming decade, possibly at a faster rate than consumption, leading to some weakening of prices. While this would have a negative impact on the demand for sisal and other hard fibres in their traditional applications, the magnitude of the impact cannot readily be quantified, and may be quite small.

III. SISAL AND HENEQUEN

4. Demand for sisal and henequen has decreased markedly since the early seventies. From around 800 000 tonnes annually, consumption had slumped to 400 000 tonnes by the mid-eighties, and to a little over 300 000 tonnes per year by the mid-nineties. The most important outlet for sisal and henequen fibre has traditionally been in the manufacture of agricultural twine. However, competition from synthetics, coupled with the adoption of harvesting techniques which use less or no twine, has resulted in the long-run contraction in the market for sisal twine. The use of sisal in twines fell from around 230 000 tonnes in the late seventies to 175 000 tonnes ten years later. Lower demand in the area of the former USSR and eastern Europe in the early nineties contributed to a further contraction in the global market of around 3 percent annually; by the mid-nineties world consumption was down to around 130 000 tonnes.

5. In many other applications, including general cordage, sacks and bags, carpets and mattings, sisal has also faced strong competition from synthetic fibres. There has, however, been some strengthening of the demand for sisal carpets, and the volume of fibre used in this application has increased from around 16 000 tonnes in the sixties to 20 000 tonnes in the mid-nineties. As a result of the contraction of the twine market coupled with the development of non-traditional applications, the proportion of sisal fibre used in the manufacture of twine has fallen markedly. It had been hoped that the use of sisal in pulping for paper would also have expanded, but this usage appears to have remained rather stagnant or perhaps even to have fallen a little to around 40 000 tonnes.

6. In the period to 2005 the use of sisal in agricultural twine is expected to continue to decline. In Europe, where sisal has already lost a great deal of ground, the rate of decline may be expected to slow. While sisal continues to hold a much larger share of the market in the United States, it too is contracting. Some uncertainty surrounds the potential in the countries of the former USSR, but it is unlikely that there will be any significant recovery.

7. There may be some further expansion in the demand for sisal carpets, although the increase in popularity seen in the first half of the nineties may, in future, be seen to have been short-lived. Some small but significant quantities of fibre are used in pulp for papermaking, and there are niches where sisal could be used to advantage, but the potential is expected to remain largely unrealized in the period to 2005. Handicrafts and geotextiles are other areas where sisal could find increased use in the future, but the quantities involved are likely to remain of little significance in the period to 2005. The proportion of sisal fibre used in the manufacture of agricultural twine is likely to decline further due to the increased use of fibre in a range of other applications. However, current growth rates in all these areas are insufficient to offset the decline in the traditional market for twines.

8. Production of sisal is expected to adjust downward to match the level of consumption of around 260 000 tonnes in 2005. Latin American producers in Brazil and Mexico are likely to feel the effect of a weaker market for sisal most strongly, as production in these countries is tied more to the traditional market for twine. The higher quality fibre from East African countries finds a broader range of outlets, and production in Kenya and Tanzania may contract more slowly than in Brazil. In Tanzania particularly, production suffered in the mid-nineties because of the impending restructuring of the Tanzania Sisal Authority and, with a newly privatized structure in place, some recovery may be expected.

9. Exports of sisal are projected to contract to around 120 000 tonnes by 2005, in line with weakening demand in importing countries. Fibre imports are expected to continue to contract at a faster rate than those of manufactures, so an increasing proportion of sisal is likely to be traded in manufactured form.

IV. ABACA

10. Global consumption of abaca is expected to expand a little to reach 85 000 tonnes by the year 2005. The major use of abaca is in non-woven applications such as tea bags, sausage casings, various filter papers and electrolytic papers. Steady growth is expected in imports by Japan and the European Community, but some contraction has been evident in North America. Exports of abaca are increasingly in the form of pulp rather than fibre, and the small cordage market continues to contract.

11. Global production of abaca has been fairly stable over recent years, with virtually no change between the mid-eighties and the mid-nineties. Demand has remained relatively strong, and prices have been firm. Output may expand slowly in future, in response to continued growth in demand for the fibre and as rehabilitation and disease control programmes in the Philippines, where 85 percent of the world's abaca is produced, lead to increased productivity. Little change is expected in Ecuador, and in the small quantities produced in other countries.

12. Aggregate exports from the Philippines and Ecuador are expected to expand slowly in line with consumption in the developed countries. The increase in trade is expected to be in the form of pulp, while exports of fibre and other manufactures are likely to contract. As a result, the proportion of abaca exported as pulp from the Philippines is likely to continue to increase, and by the year 2005 up to 50 percent of global exports (expressed in fibre equivalent) may be in the form of pulp, compared with under 40 percent in the mid-nineties. Some growth in exports of handicraft products may also be expected, although the quantities involved would remain a small proportion of the total.

V. COIR

13. Global consumption of coir rose by four percent annually during the past decade, the result strong growth in developing countries and despite declining consumption in developed countries. In India, the biggest producing country, consumption grew at nearly 7 percent annually, while other producing as well as importing developing countries also recorded strong growth, although accounting for smaller quantities. This pattern is expected to continue, although there may be some slowing from the rapid rate at which India's consumption has grown. At the same time, non-traditional products such as geotextiles, rubberized coir, and coir peat may, to some extent, replace traditional products as outlets for the fibre in the developed countries.

14. Production of coir is determined by demand, there being ample quantities of unused husks potentially available for extraction. Production of brown coir rose at around 4 percent annually between 1980 and 1996, and if this growth continues, around 330 thousand tonnes would be produced by the year 2005. Production of yarn, traditionally spun from white retted fibre but now increasingly from brown fibre,^{1 is also expanding, total production of coir, in order to meet demand, is expected to reach 600 000 tonnes by the year 2005.}

15. The growth in production in recent years has largely been absorbed in India, and exports of coir and coir products have grown only slowly. Fibre exports, dominated by Sri Lanka, contracted from around 80 000 tonnes in the mid-eighties to 67 000 in the mid-nineties, around 2 percent annually, and, with demand falling in the developed countries, a continuation of this trend could be expected which would result in a trade value of only 55 000 tonnes by 2005. Exports of yarn and of floor coverings are, however, expected to continue to grow to 76 000 tonnes by 2005, more than offsetting the contraction in fibre exports. While trade in some non-traditional products, particularly geotextiles, could show growth in the future, the relatively small quantities involved suggest that these are unlikely to have a noticeable impact on the general pattern of trade in coir.

VI. MAIN PROBLEMS AND DEVELOPMENT ISSUES

16. The downward trend in exports of sisal and coir has continued, due largely to increasing competition from synthetics and, in the case of sisal, haymaking practices which use less or no twine. Coir consumption has been maintained essentially by increased consumption in India, the biggest producing country, and exports are projected to continue to contract. Demand for abaca however has remained sound, due to its use in a number of relatively new applications, its traditional outlet in cordage having largely disappeared.

17. Both sisal and coir are finding an increasing number of non-traditional outlets, although most new applications so far account for relatively small proportions of the total production. The major thrust of project activity financed by the Common Fund for Commodities has been to identify and develop new market outlets for fibre. One of two projects on coir which were completed in 1998 has identified potential new markets for rubberized coir, geotextiles and coir dust. The project on sisal, now in its early stages, is exploring the market potential for pulp and paper. A new project on coir, yet to be finalized, is designed to develop new processes for manufacturing building and packaging material from coconut husks. Together with efforts to improve productivity and to utilise waste materials, these projects could aid the viability of hard fibre production. Further efforts however are likely to be required if the downward trends in exports of sisal and coir are to be reversed.

Table 1. Production of Hard Fibres

	Actual 1984 1994 1996			Projected 2005	Growth Rates 1984-1994 1994-2005
	thousand tonnes fibre equivalent				percent per year
Sisal and Henequen	418	329	308	268	-2.4	-2.0
Abaca	77	76	84	85	-0.2	1.2
Coir
Brown Fibre	144	220	240	329	4.3	4.1
Yarn	132	188	215	269	3.6	3.6
Total	276	408	454	598	4.0	3.9

Table 2. Exports of Hard Fibres

	Actual 1984 1994 1996			Projected 2005	Growth Rates 1984-1994 1994-2005
	thousand tonnes fibre equivalent				percent per year
Sisal and Henequen
Fibres	166	85	76	42	-6.4	-6.7
Manufactures	155	110	82	76	-3.4	-3.6
Total	321	196	157	119	-4.8	-4.9
Abaca
Fibres	40	30	31	26	-2.9	-1.4
Pulp	12	23	26	35	6.3	4.4
Other Manufactures	17	13	11	10	-3.1	-2.8
Total	70	65	69	71	-0.6	0.8
Coir
Brown Fibre	80	67	61	55	-1.8	-2.0
Yarn and Products	44	58	64	76	2.7	2.8
Total	124	125	125	131	0.0	0.5

Table 3. Sisal and Henequen: Actual and Projected Production

	Actual 1984 1994 1996			Projected 2005	Growth Rates 1984-1994 1994-2005
	thousand tonnes fibre equivalent				percent per year
Latin America	291	214	194	161	-3.1	-2.8
Brazil	188.8	147	125	110	-2.5	-2.8
Mexico	73	38	38	26	-6.3	-3.1
Other Countries	30	29	31	25	-0.3	-1.5
Africa	111	81	74	64	-3.1	-2.3
Kenya	49	32	26	22	-4.2	-3.6
Madagascar	13	13	14	13	0.6	0.0
Tanzania	39	29	27	24	-3.0	-1.8
Other Countries	11	7	7	4	-3.9	-5.7
Asia	16	35	40	43	8.0	2.2
Total Sisal and Henequen	418	329	308	268	-2.4	-2.0

Table 4. Sisal and Henequen: Actual and Projected Apparent Consumption by Major End-Use

	Actual 1984 1994 1996			Projected 2005	Growth Rates 1984-1994 1994-2005
	thousand tonnes fibre equivalent				percent per year
Agricultural Twines	190	130	110	85	-3.7	-4.2
Other twines, ropes, cables	90	60	56	35	-10.9	-5.2
Sacks and Bags	65	50	35	30	-2.6	-5.0
Wire rope centres		10	12	10		0.0
Padding	15	5	7	5	-10.4	0.0
Carpets, Mats, Matting	18	20	23	25	1.1	2.3
Paper	30	40	38	45	2.9	1.2
Buffing cloth		3	7	8		10.3
Other	10	10	20	25	0.0	9.6
Total	418	328	308	268	-2.4	-2.0
of which:
Developing countries
Producers	97	134	151	149	3.3	1.1
Importers	30	41	na	40	3.0	-0.3
Developed Countries	291	151	na	79	-6.3	-6.2

Table 5. Abaca: Actual and Projected Apparent Consumption

	Actual 1984 1994 1996			Projected 2005	Growth Rates 1984-1994 1994-2005
	thousand tonnes fibre equivalent				percent per year
World	77	76	84	85	-0.2	1.2
Developing Countries	18	13	19	18	-2.9	3.3
Producers (prodn-expts)	8	11	15	15	3.3	3.5
Consumers (imports)	5	3	3	3	-3.1	-0.9
Developed Countries	60	63	65	67	0.5	0.7
North America	24	16	15	10	-0.4	-4.4
EC	17	26	29	35	4.2	3.1
Japan	11	17	19	20
Others	8	4	3	2	-6.4	-5.8
Estimated Consumption by Main End-Use
Cordage	17	12	10	6	-2.9	-7.4
Paper-making	57	59	70	73	0.3	2.1
Handicraft and other uses	3	5	5	6	5.0	2.1

Table 6. Coir: Actual and Projected Apparent Consumption

	Actual 1984 1994 1996			Projected 2005	Growth Rates 1984-1994 1994-2005
	thousand tonnes fibre equivalent				percent per year
Developed Countries	108	95	89	85	-1.3	-1.1
Developing Importing Countries	8	21	27	39	10.2	6.3
Developing Producing Countries	160	292	338	474	6.2	5.0
of which:
India	140	267	312	444	6.7	5.2
Other	20	25	26	30	2.3	1.9
World	276	408	454	598	4.0	3.9

1 Data on production of fibre exclude that which is used for yarn production; thus it is appropriate to aggregate "fibre" and "yarn" to obtain a figure for total production.