In his previous article David Birnbaum suggested that the availability of local fibre appears to be a handicap for garment-making countries. Here he adds evidence that countries producing cotton fibre and textiles pay a price for their failure – while those without the benefit of local cotton fibre and textiles benefit.

There is a clear relationship between supplying countries with access to local fibre and textiles and their ability to follow changes in customer demand.

There is also ample evidence that the cotton fibre and textile producing countries pay a price for their failure, just as those without the benefit of local cotton fibre and textiles benefit.

Sri Lanka is an excellent case in point. Market share fell each year since 2005 reaching a trough in 2010, at which point the trend reversed and both market share and year-on-year change rose dramatically.

China, the world's largest cotton grower and cotton textile producer, shows the other side of the coin. US market share peaked in 2010 and has remained stagnant in 2011 and 2012. The year-on-year market share change (with the exception of a spike in 2009) has been in decline since 2007.

Finally India, the world's second-largest cotton grower, shows a picture almost identical to China, but with a far more serious decline.

There can many causes for this relationship. However, neither sound business practice nor good economic sense can be considered to be reasonable explanations.

There are 2 possibilities:

A: Garment factories in India and elsewhere have taken leave of their collective sense; obtained lemming licenses; and are the process of committing industrial suicide.

B: Garment factories in India and elsewhere would like to meet customers' demands, but are in some way constrained. 

Since the probability of alternative A = 0, we are left with supplier constraints, which leads us to the infamous captive customer syndrome.

Most governments are biased towards textiles and away from garments.

Textiles is high class industry managed by educated gentlemen, while garment making is definitely seen as a low class operation run by semi-crooks who make money by exploiting there workers as slave labour. 

Governments see a successful textile industry as a step up on the development ladder, while the garment industry is seen as a necessary evil to be tolerated during the first stage of development but to be discarded as soon as possible.

As a result governments protect their textile industry with tariff and non-tariff barriers, at the expense of their local garment makers. 

It may be argued that protection that leads to driving your customers out of business is not a good policy. However, the governments and industry that have imposed the captive customer syndrome do not see the irony.

Click here to read 'Fibre and its role in the global garment industry,' in which David Birnbaum charts the relationship between a country's access to local fibre and its ability to follow changes in customer demand.