Required Report - public distribution

**Date:** 5/3/2004

**GAIN Report Number:** KS4021

KS4021

**Korea, Republic of**

**Cotton and Products**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Grant A. Pettrie

U.S. Embassy

**Prepared by:**

Stanley S. Phillips / Sunyoung Choi

**Report Highlights:**

Continued declines in spinning capacity reflecting pressure from
imported yarn and textiles are expected to be offset by strengthening
economic conditions and, in turn, demand for cotton products. As a
result, raw cotton imports in MY 2004/05 are forecast to remain stable
at 290,000 metric tons.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Seoul \[KS1\]

\[KS\]

Table of Contents

[Section I. Situation and Outlook 3](#section-i.-situation-and-outlook)

[Consumption & Production 3](#consumption-production)

[Trade 3](#trade)

[Stocks 4](#stocks)

[Section II. Statistical Tables 5](#section-ii.-statistical-tables)

[PS&D for Total Cotton 5](#psd-for-total-cotton)

[Trade Matrix 6](#trade-matrix)

[Korea: Total Imports of Raw Cotton for MY 2002/03 & MY 2003/04
6](#korea-total-imports-of-raw-cotton-for-my-200203-my-200304)

[Korea: Imports of ELS Cotton for MY 2002/03 & 2003/04
6](#korea-imports-of-els-cotton-for-my-200203-200304)

[Korea: Imports of Upland Cotton for MY 2002/03 & MY 2003/04
7](#korea-imports-of-upland-cotton-for-my-200203-my-200304)

[Korea: Exports of Raw Cotton for MY 2002/03 & 2003/04
7](#korea-exports-of-raw-cotton-for-my-200203-200304)

[Korea: Imports of Cotton Yarn for CY 2003 & 2004
8](#korea-imports-of-cotton-yarn-for-cy-2003-2004)

[Korea: Imports of Cotton Fabric for CY 2003 & 2004
8](#korea-imports-of-cotton-fabric-for-cy-2003-2004)

[Korea: Exports of Cotton Yarn for CY 2002 & 2003
9](#korea-exports-of-cotton-yarn-for-cy-2002-2003)

[Korea: Exports of Cotton Fabric for CY 2002 & 2003
9](#korea-exports-of-cotton-fabric-for-cy-2002-2003)

[Korea: Imports and Exports of Cotton Apparel
10](#korea-imports-and-exports-of-cotton-apparel)

[Korea: Most Recent Import Trend for Cotton Products Influence of the
China's Entry into the Bangkok Agreement
10](#korea-most-recent-import-trend-for-cotton-products-influence-of-the-chinas-entry-into-the-bangkok-agreement)

[PRICES 11](#prices)

[Korea: Average Monthly Import Price for Raw Cotton
11](#korea-average-monthly-import-price-for-raw-cotton)

[Korea: Price of Cotton Yarn for Export and Local Trade
11](#korea-price-of-cotton-yarn-for-export-and-local-trade)

[PRODUCTION 12](#production)

[Korea: Spun Yarn Production 1/ (Unit in MT)
12](#korea-spun-yarn-production-1-unit-in-mt)

[Korea: Fabric Production by SWAK Member Companies 1/
12](#korea-fabric-production-by-swak-member-companies-1)

[CONSUMPTION 13](#consumption)

[Korea: Raw Material Consumption by SWAK Member Companies 1/
13](#korea-raw-material-consumption-by-swak-member-companies-1)

[Korea: Number of Spindles/Looms owned by SWAK member Companies in Korea
13](#korea-number-of-spindleslooms-owned-by-swak-member-companies-in-korea)

[Korea: Offshore Cotton Facilities Owned by Korean Spinners in 2003
13](#korea-offshore-cotton-facilities-owned-by-korean-spinners-in-2003)

[Korea: Tariff Rates for Cotton Products
14](#korea-tariff-rates-for-cotton-products)

# Section I. Situation and Outlook

Raw cotton is not produced in Korea. Cotton from the United States and
Australia accounts for almost 60 percent of the Korean market. Roughly
95 percent of raw cotton imports are consumed by the 20 Korean cotton
mills that comprise the Spinners and Weavers Association of Korea
(SWAK). In CY 2003, drought-reduced cotton production in Australia and
increased cotton demand in China resulted in higher cotton prices for
Korean spinners and weavers. At the same time, a slowdown in the Korean
economy and a continuing decline in spinning capacity reduced domestic
demand for cotton products. Despite expectations of continued decreases
in spinning capacity, strengthening economic conditions in Korea and
continued strong export demand for yarn are expected to keep Korean raw
cotton imports stable at .3 MMT in MY 2004/05.

## Consumption & Production

In CY 2004, the Korean clothing market is expected to grow 7 percent to
US\$ 17.15 billion in sales along with improved prospects for the Korean
economy. Although prospects for a stronger economy are expected to boost
overall demand in Korea for cotton products in MY 2004/05, much of the
benefit may accrue to foreign spinners and weavers.

Increased imports of competitively priced cotton yarn imports have
resulted in reduced yarn production in Korea. The number of spindles
owned by SWAK member companies, over 2 million in 2001, is forecast to
fall to 1.6 million in 2004. Korean spinners are restructuring and
placing increasing emphasis on investing in overseas spinning capacity.
As a result of the lackluster economy in 2003 and the trend toward
increasing foreign yarn production, overall cotton yarn production in
Korea decreased from 209,848 MT in CY 2002 to 204,346 MT in CY 2003. The
trend continued during the first two months of CY 2004 with yarn
production 7 percent lower than during the same period in CY 2003.

In reaction to competition from low-cost suppliers, Korean spinners have
emphasized production of high quality yarns (particularly blends) for
export in addition to investing in foreign spinning capacity. Cotton
yarn exports increased in MY 2003/04. High quality cotton yarn exports
accounted for a larger portion of overall yarn exports. Cotton yarn
exports, over 50 percent of which go to Hong Kong and China, are
expected to continue as a bright spot for Korean spinners in MY 2004/05.

Because of reduced textile production, Korea's total raw cotton
consumption in MY 2003/04 decreased to 289,678 MT; a substantial
reduction from MY 2002/03. In MY 2004/05, strengthening domestic demand
and continued strong demand for Korean cotton yarn and fabrics from
China is expected to keep cotton consumption stable a 290,000 despite
strong competition from imported cotton yarn and products.

Cotton fabric production in Korea has been in decline since CY 1999.
Korean weaving facilities operated at 65 percent capacity CY 2003
compared to 77 percent in CY 2002. In addition, the number of spindles
operated by Spinners Weavers Association of Korea (SWAK) member
companies declined 7 percent from 1.82 million in CY 2002 to 1.68
million in 2003. Capacity peaked at 3.7 million spindles in CY 1989.
Korean spindle capacity, expected to decrease to 1.60 million spindles
in CY 2004, will likely continue to decline in the future.

## Trade

Korea's total raw cotton imports in MY 2004/05 are forecasted to
increase to 290,000 MT along with an expected recovery of the Korean
economy. In MY 2003/04, total cotton imports are estimated to decline to
277,800 MT. In part, the reduction in imports was the result of a stock
buildup which occurred at the end of MY 2002/03.

Korea imported only 183,431 MT of raw cotton during the first 8 months
of MY 2003/04 (August 2003 -- March 2004); a 13.4 percent reduction from
211,774 MT of imports over the same period in the previous year. In
contrast to the overall reduction in Korean raw cotton imports during MY
2003/04, U.S. cotton exports to Korea increased to 78,293 MT; a 43
percent increase from 54,742 MT in MY 2002/03. In MY 2004/05, U.S.
upland cotton exports to Korea will likely be faced with some additional
competition from Australia as cotton production there recovers from
drought in MY 2003/04.

SWAK estimates that about 50 percent of the spinning costs in Korea are
based on cotton prices. Currently, the price of Brazilian raw cotton is
about 8 - 10 cents/pound (C&F value) lower than cotton from the United
States. As a result, some Korean spinners are expected to increasingly
turn to Brazilian upland cotton suppliers in MY 2003/04 and MY 2004/05
in an effort to keep production costs down.

Korea's Extra Long Staple (ELS) cotton consumption in MY 2004/05 is
expected to increase slightly after a decline in MY 2003/04. Local golf
apparels sales, a key finished ELS cotton product, decreased in line
with slow economic growth in CY 2003. Imports of Egyptian ELS cotton,
perceived as the best quality cotton by Korean importers, decreased in
MY 2003/04 as a result of reduced export availabilities in Egypt.
Accordingly, Korean importers shifted from Egyptian ELS cotton to U.S.
pima cotton in MY 2003/04. Nevertheless, total ELS cotton imports in MY
2003/04 are expected to decrease slightly. Improved export prospects for
Egyptian ELS cotton in MY 2004/05 and beyond will likely result in
increased Korean imports.

Although Korean spinners and weavers continue to face strong competition
from foreign yarn and fabric supplies, imports of cotton yarn and cotton
fabric imports decreased in CY 2003. In the face of stagnant demand in
Korea, Korean importers reduced cotton yarn and fabric, respectively, by
18 and 12 percent in CY 2003 to 197,406 MT and 75,378 MT. Prospects for
stronger economic conditions in MY 2004/05 will likely lead to increased
cotton yarn and cotton fabric imports.

Korean cotton yarn exports increased slightly (3 percent) in CY 2003 to
30,802 MT based largely on increased demand for Korean cotton yarn from
China. According to analysts in the Korean cotton industry, China is
expected to continue to demand additional cotton products as economic
growth spurs a shift in Chinese consumer preferences shift from
synthetic textiles to more cotton and cotton-blend textiles.

Under USDA's GSM Export Credit Guarantee program for FY 2004, US\$ 44.9
million of U.S. cotton sales were registered as of April 2, 2004. The
total GSM program announced for Korea in FY 2004 is \$450 million.

## Stocks

SWAK produces the only reliable data on cotton stocks in Korea. SWAK
prepares stock estimates by surveying members to determine "days of
stock on hand." Since the Asian financial crisis in CY 1998, Korea has
been maintaining about 85 - 90 days worth of stock on hand. SWAK
reported that stocks on hand in July 2003 were unusually high at 101,595
MT. High ending stocks at the end of MY 2002/03 were reportedly the
result of advance purchasing by some importers who correctly anticipated
higher prices for imported cotton. During MY 2003/04, Korean cotton
processors are expected to draw down stocks to a level of 88,617 MT.
Continued strong prices and a general trend toward decreasing capacity
is expected to result in a further decline in MY 2004/05 ending stocks
to 87,517 MT.

# Section II. Statistical Tables

## PS&D for Total Cotton

![](media/image2.wmf)

## Trade Matrix

### Korea: Total Imports of Raw Cotton for MY 2002/03 & MY 2003/04

  -------------- --------- --------- ------ -------------- --------- --------- ------
  MY 2002/03                                MY 2003/04(AUG                     
                                            -- FEB)                            

  COUNTRY        MT        \$000     Mkt.   COUNTRY        MT        \$000     Mkt.
                                     Shr.                                      Shr.

  U.S.A.         94,648    107,526   29%    U.S.A.         67,717    97,692    42%

  AUSTRALIA      96,922    110,754   30%    AUSTRALIA      28,395    42,460    17%

  UZBEKISTAN     46,262    50,151    14%    UZBEKISTAN     15,971    22,240    10%

  PR. CHINA      34,187    40,277    10%    PR. CHINA      7,618     10,508    5%

  EGYPT          13,970    25,406    4%     EGYPT          4,836     8,063     3%

  RUSSIA         8,748     9,859     3%     RUSSIA         7,976     10,463    5%

  SWITZERLAND    8,232     8,935     3%     SWITZERLAND    360       489       0%

  ZIMBABWE       6,140     7,009     2%     ZIMBABWE       1,553     1,942     1%

  BURKINA FASO   4,187     4,396     1%     BURKINA FASO   3,173     4,172     2%

  MALI           1,862     1,965     1%     MALI           1,337     1,801     1%

  BRAZIL         0         0         0%     BRAZIL         6,953     10,106    4%

  OTHER          9,780     10,472    3%     OTHER          16,160    25,048    10%

  TOTAL          324,938   376,750   100%   TOTAL          162,049   234,984   100%
  -------------- --------- --------- ------ -------------- --------- --------- ------

Source: Korea Trade Information Services (KOTIS)

### Korea: Imports of ELS Cotton for MY 2002/03 & 2003/04

  ------------- -------- -------- ------ ------------- ------- ------- ------
  MY 2002/03                             MY                            
                                         2003/04(AUG                   
                                         -- FEB)                       

  COUNTRY       MT       \$000    Mkt.   COUNTRY       MT      \$000   Mkt.
                                  Shr.                                 Shr.

  U.S.A.        1,827    3,313    23%    U.S.A.        2,310   4,474   56%

  HONG KONG     469      595      6%     HONG KONG     0       0       0

  ISRAEL        0        0        0%     ISRAEL        239     586     6%

  PR. CHINA     1,436    2,497    18%    PR. CHINA     93      218     2%

  EGYPT         4,156    7,802    52%    EGYPT         1,348   3,322   33%

  RUSSIA        125      197      1%     RUSSIA        0       0       0

  OTHER         0        1        0%     OTHER         123     206     3%

  TOTAL         8,013    14,405   100%   TOTAL         4,113   8,806   100%
  ------------- -------- -------- ------ ------------- ------- ------- ------

Source: Korea Trade Information Services (KOTIS)

### Korea: Imports of Upland Cotton for MY 2002/03 & MY 2003/04

  --------------- --------- --------- --------- ------------- --------- ---------
                  MY                            MY                      
                  2002/03                       2003/04(AUG             
                                                -- FEB)                 

  COUNTRY         MT        \$000     Mkt. Shr. MT            \$000     Mkt. Shr.

  U.S.A.          92,822    104,213   29%       65,407        93,218    41%

  AUSTRALIA       96,922    110,754   30%       28,395        42,460    18%

  UZBEKISTAN      46,262    50,151    15%       15,971        22,240    10%

  PR. CHINA       32,751    37,780    10%       7,525         10,290    5%

  EGYPT           9,814     17,604    3%        3,488         4,741     2%

  RUSSIA          8,623     9,662     3%        7,976         10,463    5%

  SWITZERLAND     8,232     8,935     3%        360           489       0%

  ZIMBABWE        6,140     7,009     2%        1,553         1,942     1%

  BURKINA FASO    4,187     4,396     1%        3,173         4,172     2%

  MALI            1,862     1,965     1%        1,337         1,801     1%

  BRAZIL          0         0         0%        6,953         10,106    5%

  OTHER           9,310     9,876     3%        15,798        24,256    10%

  TOTAL           316,925   362,345   100%      157,936       226,178   100%
  --------------- --------- --------- --------- ------------- --------- ---------

Source: Korea Trade Information Services (KOTIS)

### Korea: Exports of Raw Cotton for MY 2002/03 & 2003/04

  ------------- --------- --------- --------- ------------- --------- ---------
                MY                            MY                      
                2002/03                       2003/04(AUG             
                                              -- FEB)                 

  COUNTRY       MT        \$000     Mkt. Shr. MT            \$000     Mkt. Shr.

  PR. CHINA     676       879       46%       0             7         0%

  VIETNAM       639       772       43%       430           559       100%

  TAIWAN        167       146       11%       0             0         0%

  PHILIPPINES   0         3         0%        0             2         0%

  OTHER         0         0         0%        0             0         0%

  TOTAL         1,482     1,800     100%      430           568       100%
  ------------- --------- --------- --------- ------------- --------- ---------

Source: Korea Trade Information Services (KOTIS)

### Korea: Imports of Cotton Yarn for CY 2003 & 2004

  ------------- --------- --------- --------- ---------- --------- ---------
                CY 2003                       CY                   
                                              2004(JAN             
                                              -- FEB)              

  COUNTRY       MT        \$000     Mkt. Shr. MT         \$000     Mkt. Shr.

  INDIA         89,020    218,203   45%       23,527     68,777    57%

  PAKISTAN      58,569    112,838   30%       11,337     28,657    28%

  PR. CHINA     16,428    45,671    8%        2,336      7,519     6%

  INDONESIA     12,728    29,739    7%        1,695      5,045     4%

  VIET NAM      9,952     17,678    5%        984        2,263     2%

  UZBEKISTAN    4,278     6,893     2%        159        332       0%

  THAILAND      3,651     9,330     2%        412        1,337     1%

  MALAYSIA      655       1,175     0%        78         143       0%

  EGYPT         558       3,173     0%        45         252       0%

  U.S.A.        146       490       0%        32         96        0%

  OTHER         1,421     14,414    1%        600        3,245     2%

  TOTAL         197,406   459,604   100%      41,205     117,666   100%
  ------------- --------- --------- --------- ---------- --------- ---------

Source: Korea Trade Information Services (KOTIS)

### Korea: Imports of Cotton Fabric for CY 2003 & 2004

  -------------- --------- --------- --------- ---------- --------- ---------
                 CY 2003                       CY                   
                                               2004(JAN             
                                               -- FEB)              

  COUNTRY        MT        \$000     Mkt. Shr. MT         \$000     Mkt. Shr.

  PR. CHINA      62,988    202,242   84%       10,728     36,903    86%

  PAKISTAN       4,800     10,845    6%        609        1,593     5%

  JAPAN          1,454     23,727    2%        303        5,702     2%

  UZBEKISTAN     944       1,984     1%        22         65        0%

  TAJIKISTAN     1,021     1,789     1%        210        372       2%

  INDIA          1,185     5,884     2%        164        839       1%

  INDONESIA      612       3,008     1%        72         455       1%

  ITALY          357       15,546    1%        76         3,717     1%

  TAIWAN         289       2,677     0%        47         593       0%

  U.S.A.         209       2,627     0%        52         563       0%

  OTHER          1,519     14,751    2%        188        2,277     2%

  TOTAL          75,378    285,080   100%      12,471     53,079    100%
  -------------- --------- --------- --------- ---------- --------- ---------

Source: Korea Trade Information Services (KOTIS)

### Korea: Exports of Cotton Yarn for CY 2002 & 2003

  ------------- -------- ---------- --------- --------- --------- ---------
                CY 2003                       CY 2004             
                                              (JAN --             
                                              FEB)                

  COUNTRY       MT       \$000      Mkt. Shr. MT        \$000     Mkt. Shr.

  HONG KONG     9,703    30,697     32%       1,198     4,515     24%

  PR. CHINA     6,418    17,189     21%       1,198     3,636     24%

  JAPAN         1,889    5,230      6%        336       1,039     7%

  U.S.A.        1,603    4,442      5%        321       1,114     6%

  GUATEMALA     1,129    3,181      4%        204       676       4%

  SINGAPORE     1,063    3,415      4%        209       722       4%

  MAURITIUS     1,006    3,119      3%        97        369       2%

  HONDURAS      946      2,352      3%        225       609       5%

  VIETNAM       736      3,190      2%        294       1,274     6%

  TAILAND       839      3,016      2%        143       518       3%

  OTHER         5,470    19,086     18%       758       2,919     15%

  TOTAL         30,802   94,917     100%      4,983     17,391    100%
  ------------- -------- ---------- --------- --------- --------- ---------

Source: Korea Trade Information Services (KOTIS)

### Korea: Exports of Cotton Fabric for CY 2002 & 2003

  --------------- --------- --------- --------- --------- --------- ---------
                  CY 2003                       CY 2004             
                                                (JAN -              
                                                FEB)                

  COUNTRY         MT        \$000     Mkt. Shr. MT        \$000     Mkt. Shr.

  U.S.A.          10,237    93,632    23%       1,688     15,740    25%

  PR. CHINA       10,249    78,611    23%       1,316     10,809    20%

  VIET NAM        2,895     19,649    6%        453       3,653     7%

  HONG KONG       2,511     29,039    6%        325       3,670     5%

  INDONESIA       3,141     21,458    7%        541       3,755     8%

  PHILIPPINES     1,254     12,578    3%        166       1,206     2%

  BANGLADESH      1,357     10,678    3%        328       2,847     5%

  AFGHANISTAN     2,315     7,104     5%        259       864       4%

  IRAN            920       4,388     2%        115       569       2%

  OTHER           9,866     77,771    22%       1,461     10,650    22%

  TOTAL           44,745    354,908   100%      6,652     53,763    100%
  --------------- --------- --------- --------- --------- --------- ---------

Source: Korea Trade Information Services (KOTIS)

### Korea: Imports and Exports of Cotton Apparel

  -------- ---------- -------- -------- -------- -------- ---------- --------
           Products   CY 2002           CY 2003           2004(JAN   
                                                          -- FEB)    

                      MT       \$Mil.   MT       \$Mil.   MT         \$Mil.

  Import   Knit       27,224   274      32,583   340      5,636      70

           Fabric     51,435   456      56,718   563      9,015      111

           Total      78,659   730      89,301   903      14,651     181

           Growth     41%      42%      13.5%    23.7%    10.7%      13.1%

                                                                     

  Export   Knit       50,578   822      46,755   772      6,520      111

           Fabric     17,830   299      19,315   320      3,371      65

           Total      68,408   1,121    66,070   1,092    9,891      176

           Growth     \- 7.1%  \- 7.4%  \- 3.4%  \- 2.6%  5.2%       2.9%
  -------- ---------- -------- -------- -------- -------- ---------- --------

Source: Spinners & Weavers Association of Korea (SWAK)

### Korea: Most Recent Import Trend for Cotton Products Influence of the China's Entry into the Bangkok Agreement

(Unit: MT)

  --------- ------------------ --------- -------- --------- -------- --------
  HS Code   Cotton Products 1/ CY 2002            CY 2003            
                               Imports            Imports            

                               Total     China    Total     China    Growth

  6202.12   Women's overcoats  419       389      682       652      68%

  6202.92   Women's anoraks,   610       606      918       912      51%
            wind-jacket                                              

  6204.12   Women's suits      188       178      217       213      20%

  6204.22   Women's ensembles  68        65       59        52       -20%

  6204.32   Women's jackets    1,611     1,427    2,730     2,494    75%

  6204.42   Women's dresses    291       243      462       401      65%

  6204.52   Women's skirts     497       429      1,184     1,079    152%

  6204.62   Women's trousers   11,808    11,234   14,873    14,340   28%

  6206.30   Women's blouses    2,538     2,377    3,479     3,289    38%

  6209.20   Babies garments    477       407      676       563      38%

            Total              18,507    17,355   25,280    23,995   38%
  --------- ------------------ --------- -------- --------- -------- --------

1/ Tariff for the listed products from China are lowered from 13% to
8.1% as of January 1, 2002. Source: Korea Trade Information Services

## PRICES

### Korea: Average Monthly Import Price for Raw Cotton

(U.S. Cents/ Pound)

  -------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
  YEAR     JAN   FEB   MAR   APR   MAY   JUN   JUL   AUG   SEP   OCT   NOV   DEC

  1998     84    83    82    79    79    76    76    76    76    78    76    75

  1999     73    71    70    68    67    65    66    66    65    64    61    59

  2000     58    57    56    57    57    58    58    58    58    59    61    63

  2001     63    65    65    64    64    60    61    59    58    57    56    53

  2002     52    51    50    48    49    47    48    48    47    48    50    50

  2003     51    54    54    55    56    59    60    60    61    61    62    69

  2004     73    76    8%    15%   14%   26%   25%   25%   28%   27%   24%   38%

  Change   43%   41%                                                         
  -------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----

Source: Korea Trade Information Services (KOTIS)

### Korea: Price of Cotton Yarn for Export and Local Trade

(Unit: USD / Bale)

<table>
<colgroup>
<col style="width: 12%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 13%" />
</colgroup>
<tbody>
<tr class="odd">
<td rowspan="2"></td>
<td colspan="4">Direct(FOB)</td>
<td colspan="4">Local Trade</td>
<td rowspan="2"><p>Exchange</p>
<p>Rate(W/$)</p></td>
</tr>
<tr class="even">
<td>CD30</td>
<td>CD40</td>
<td>CM30</td>
<td>CM40</td>
<td>CD30</td>
<td>CD40</td>
<td>CM30</td>
<td>CM40</td>
</tr>
<tr class="odd">
<td>Dec.2000</td>
<td>-</td>
<td>-</td>
<td>510</td>
<td>550</td>
<td>510</td>
<td>590</td>
<td>540</td>
<td>650</td>
<td>1,256</td>
</tr>
<tr class="even">
<td>Sep.2001</td>
<td>-</td>
<td>-</td>
<td>480</td>
<td>520</td>
<td>480</td>
<td>550</td>
<td>510</td>
<td>600</td>
<td>1,296</td>
</tr>
<tr class="odd">
<td>Dec.2001</td>
<td>-</td>
<td>-</td>
<td>430</td>
<td>480</td>
<td>450</td>
<td>530</td>
<td>470</td>
<td>560</td>
<td>1,289</td>
</tr>
<tr class="even">
<td>Dec.2002</td>
<td>-</td>
<td>-</td>
<td>420</td>
<td>480</td>
<td>-</td>
<td>-</td>
<td>430</td>
<td>520</td>
<td>1,209</td>
</tr>
<tr class="odd">
<td>May2003</td>
<td>-</td>
<td>-</td>
<td>450</td>
<td>520</td>
<td>-</td>
<td>-</td>
<td>470</td>
<td>550</td>
<td>1,198</td>
</tr>
<tr class="even">
<td>Dec.2003</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>590</td>
<td>640</td>
<td>1,192</td>
</tr>
<tr class="odd">
<td>Mar.2004</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>-</td>
<td>570</td>
<td>630</td>
<td>1,166</td>
</tr>
</tbody>
</table>

Source: Spinners & Weavers Association of Korea (SWAK)

## PRODUCTION

### 

### Korea: Spun Yarn Production 1/ (Unit in MT)

  ----------------- ----------- -------------- ---------- ---------- --------
  Year              Cotton Yarn Cotton Blended MMF 2/     Total      Growth

  1998              168,705     58,118         22,636     249,459    -7.6%

  1999              190,294     57,871         27,429     275,594    10.5%

  2000              182,357     56,921         29,230     268,508    -2.6%

  2001              191,826     45,376         24,601     261,803    -2.5%

  2002              209,848     42,974         28,287     281,109    7.4%

  2003              204,346     51,039         28,174     283,559    0.9%

  Change            \- 2.6%     18.7%          \- 0.4%    0.9%       

  2003(Jan.-Feb.)   34,608      8,104          4,801      47,513     

  2004(Jan.-Feb.)   32,148      6,924          4,329      43,401     \- 8.7%

  Change            \- 7.1%     \- 14.6%       \- 9.8%    \- 8.7%    
  ----------------- ----------- -------------- ---------- ---------- --------

1/ Member companies account for approximately 95 percent of total cotton
consumption.

2/ Man-made Fiber (MMF)

Source: Spinners & Weavers Association of Korea (SWAK)

### Korea: Fabric Production by SWAK Member Companies 1/ 

(Unit in 1000 Square meters)

  ----------------- ------------ -------------- -------- ---------- ---------
  Year              Cotton       Cotton Blended MMF 2/   Total      Growth
                    Fabric                                          

  1998              104,558      58,183         47,346   210,087    -25.6%

  1999              127,101      88,540         46,560   262,201    24.8%

  2000              107,483      70,941         46,046   224,470    -14.4%

  2001              97,749       61,134         30,830   189,714    -15.4%

  2002              86,558       61,354         24,950   172,863    -8.9%

  2003              70,843       44,004         19,343   134,189    \- 22.4%

  Change            \- 18.1%     \- 28.3%       \- 22.5% \- 22.4%   

  2003(Jan.-Feb.)   12,204       8,460          3,848    24,512     

  2004(Jan.-Feb.)   12,224       5,708          1,761    19,693     \- 19.7%

  Change            0.1%         \- 32.5%       \- 54.2% \- 19.7%   
  ----------------- ------------ -------------- -------- ---------- ---------

1/ Member companies account for approximately 95 percent of total cotton
consumption.

2/ Man-made Fiber(MMF)

Source: Spinners & Weavers Association of Korea (SWAK)

## CONSUMPTION

### Korea: Raw Material Consumption by SWAK Member Companies 1/ 

(Unit in MT)

  ------------------ ----------- ------------ ----------- -------- ---------
  Year               Raw Cotton  Rayon&Acet   Polyester   Other    Total

  1997               267,199     16,959       36,989      2,686    323,833

  1998               244,296     17,169       33,537      2,621    297,623

  1999               275,113     21,274       32,777      4,041    333,205

  2000               267,496     23,289       33,201      2,925    326,911

  2001               270,678     18,231       24,121      3,067    316,079

  2002               290,171     19,465       20,623      6,380    336,639

  2003               288,320     21,116       21,827      7,882    339,145

  Change             \- 0.6%     8.5%         5.8%        23.5%    0.7%

  2003(Jan.-Feb.)    48,312      3,365        3,897       1,161    56,735

  2004(Jan.-Feb.)    45,095      3,185        2,752       1,400    52,432

  Change             \- 6.7%     \- 5.3%      \- 29.4%    20.6%    \- 7.6%
  ------------------ ----------- ------------ ----------- -------- ---------

1/ Member companies account for approximately 95 percent of total cotton
consumption

Source: Spinners & Weavers Association of Korea (SWAK)

### Korea: Number of Spindles/Looms owned by SWAK member Companies in Korea

  ---------------- -------- -------- -------- -------- -------- -------- -----------
                   1998     1999     2000     2001     2002     2003     2004(est)

  Spindles('000)   2,271    2,200    2,119    2,040    1,823    1,689    1,600

  Looms            3,482    2,469    2,300    1,810    1,500    1,362    1,300
  ---------------- -------- -------- -------- -------- -------- -------- -----------

Source: Spinners & Weavers Association of Korea (SWAK)

### Korea: Offshore Cotton Facilities Owned by Korean Spinners in 2003

  ----------------------- ----------------------- -----------------------
  Country                 Number of Spindles      Number of Looms

  CHINA                   225,832                 392

  VIET NAM                188,472                 1,731

  INDONESIA               16,960                  \-

  INDIA                   104,646                 \-

  SRI LANKA               100,000                 558

  UZBEKISTAN              329,340                 346

  TAJIKISTAN              35,952                  243

  EGYPT                   53,184                  \-

  TOTAL                   1,054,386               3,270
  ----------------------- ----------------------- -----------------------

Source: Spinners & Weavers Association of Korea (SWAK)

## Korea: Tariff Rates for Cotton Products

(Unit % imposed on CIF value)

  ------------- ----------------------- -------------- ---------- ---------
                Current Applied Tariff  Bound Tariff              
                Rates                   under WTO                 
                                        Commitments               

  Year          2004                    2004           2005       2006

  Raw cotton 1/ 0%                      2%             2%         2%

  Cotton yarn   2%                      13%            13%        13%
  2/                                                              

  Cotton fabric 10%                     13%            13%        13%
  3/                                                              
  ------------- ----------------------- -------------- ---------- ---------

1/ a quota tariff rate is currently being applied with unlimited quota
amount.

2/ a quota tariff rate is currently being applied for 50,000 MT of low
count cotton yarn, for other cotton yarn a basic tariff rate of 8% is
currently being applied.

3/ a basic rate of 10% is currently being applied.

\* Quota tariff rate and adjustment tariff rate are annually modified by
the Ministry of Finance and Economy.