Italian Views of Silk Situation

Mr. Andrea Taborelli 

President of Textile Group of Confindustria Como

Ladies and Gentleman,

Good afternoon to you all.

It is a great honour to have the opportunity of meeting the representatives of Chinese sericulture and Chinese silk industry and their international guests, who are attending the annual Assembly.

My name is Andrea Taborelli. I am the CEO of “TESSITURA SERICA A.M. TABORELLI SRL”, a weaving mill which is located not far from Como. It was established in 1895 and nowadays it is one of the biggest weaving mills in Europe.

Stefano Vitali, chairman of “Ufficio Italiano Seta” has not been able to attend this meeting and I take the floor in his place.

We produce jacquard and plain woven fabrics, we are a link in the textile chain which is concentrated in the surroundings of Como and which is the hub of the silk industry in Europe, as you well know. An important number of mills, very highly specialized in each aspect of the activities which add value to silk, from twisting to finishing.

Since 2016 I have the honour to be the President of the Textile Group of Confindustria Como, since 2018 I am Vice-President of the Federation Sistema Moda Italia. I am taking the floor as representative of the Italian silk industry and I wish to thank the Chinese organizers of this event, because they give us the possibility to exchange our views and expertise in silk developments.As usual, first of all, I shall provide you with some information regarding the situation of silk activity in Italy.

We already declared several times, in the past, how important is foreign trade for Italian silk industry, 75% of our turnover is made abroad. In 2018 the value of Italian exports of silk products reached 850 million Euro, that means 1.3% more than in 2017.

The main market was France, almost 154 million Euro, especially for luxury products. It increased substantially. United States, Middle East and Germany were suffering, Switzerland improved, United Kingdom was stable. China reached 68 million Euro, 10% more than 2017. Sales of garments were very satisfactory.

Our exports regard mainly silk fabrics, in 2018 it was 189 million Euro, the same value of previous year. In the meanwhile silk dresses reached 202 million Euro, 2% more. Silk shirts and blouses amounted to almost 153 million Euro, 4% more. Silk scarves increased as well, almost 130 million Euro, 2% more.

Silk ties decreased to 120 million Euro, 6% less.

Generally speaking, if we look at values, it seems Italian silk industry is keeping its levels. But if we consider quantities, we are very far away from what we were able to produce some years ago.

Italian garment makers have been able to increase their sales of very expensive silk made ups all over the world, but silk consumption in the textile chain in Italy is suffering.

In 2018 Italian consumption of silk yarns in weaving was stable, after the decline of the previous three years. As a whole, we have lost 15%. In 2018 the production of Italian fabrics, comprising Italian finishing of foreign loomstate or boiled off, has decreased 10%. Much bigger reduction is 2019.

Imports of silk materials are declining more than 20% and also fabrics are going down, more than 6%. International trade is suffering this year.

Protectionism is increasing and too many uncertainties in economic climate are disappointing the expectations of market players. This is true not only for silk, but our fiber is affected by specific problems that we must face as soon as possible.

Raw silk quotations reached the peak at the half of 2018, at the end of a period of sharp increases. During summer they started to go down and at the half of 2019 they were more than 20% lower. The price of our fiber is always acting crazy and this is the best way to destroy the confidence of silk users.

Garment makers pretend to receive stable prices from their suppliers, at least for the length of one single season. They move away from such a risky fiber and they propose blends of fibers different from silk. The producers of man made fibers are investing in new materials, they are improving quality and properties of their items. They are powerful, they are giants, they are able to run effective marketing policies worldwide and to increase the image of their products.

Silk is going the opposite way and this is very, very dangerous.

The level of silk quotations is not a problem itself, at least in European or American markets. Turbolence is the real problem. Turbolence is the best way to jeopardize the consumption of silk.

Our customers are more and more interested in fibers different from silk. Where is silk going, the day luxury brands will move away? This is exactly what is happening. We need a proper policy for silk, as soon as possible.

At International Silk Union event in 2017 we heard reports of extraordinary developments in domestic market use of silk in China. The only cautious comment come from Mr. James Chang (Chairman of Suzhou Taifa Coloured Thread Weaving Co., Ltd.), who compared the situation of raw silk purchase from the point of view of quality and price to gambling in a casino.

We all know how the situation unfolded in the following months.

In 2018, at ISU meeting in Como I said how difficult is for us to cope with price volatility in Europe and how damaging is to handle unreliable quality testing.

In 2019, we see more of the same: first a speculative downward price push by the Silk Exchange, in preparation for a speculative price increase by the same. With extreme punctuality quality went down as prices moved up. Mr. Chang was right in describing the silk market as a casino.

Some might be found of games, but the textile fashion market takes a completely contrary view.

If we go on along this path silk risks to be completely excluded from the medium market collection and the overall consumption to head further down next year. If crops are normal the inevitable crush will follow. Is it an intelligent game?

I let your wisdom offer reply and I want to assure you that we will be at your side, as old friends and partners, to study remedies to a situation we can conservatively qualify as extremely dangerous.

I thank you for your attention.