Global PPE Trade And Production On The Rise

  • While total world trade declined by 14% in the first half of 2020 compared to the same time period in 2019, imports and exports of medical goods increased by 16%, reaching US$ 1,139 billion in value.
  • Trade played a critical role in meeting skyrocketing demand for products considered critical in the Covid-19 pandemic, with global trade in these products growing by 29%.
  • Total imports of face protection products in the first half of 2020 increased by 90% compared to the same period last year. Trade in textile face masks has grown about six-fold.
  • China was the top supplier of face masks, accounting for 56% of world exports. To ramp up mask
  • manufacturing, China leaned heavily on imports of intermediate input materials: its imports of nonwoven fabric tripled in April 2020 compared with the same month of 2019, with Japan and the United States as the leading suppliers. China was also the sixth largest importer of face masks in the first half of 2020.
  • Among the different types of face masks, textile masks are the most traded despite facing the highest tariffs.
  • Leading importers of Covid-19-critical products registered double-digit import growth compared to 2019, including 62% in France and 52% in Italy.
  • Chinese exports of Covid-19-critical medical products more than tripled based on year-on-year data for the first half of the year, from US$ 18 billion to US$ 55 billion.
  • Global production of PPE is on the rise as every country strives to be self-sufficient in these vital products, and reduce dependency on China and other suppliers.

Global trade in the first half of 2020 registered a 14% year-on-year decline and was 15% lower than trade in the second half of 2019.

Trade in medical goods, not surprisingly, surged, growing 15.8% year-on-year in the first half of 2020, much higher than the 2% growth registered in the first half of 2019. Preliminary figures for 97 economies registered US$ 1,139 billion in trade (including exports plus imports) of medical products. These figures correspond to a 7.5% share of world trade for the same period and more than the 5.3% share in 2019.

Trade in pandemic-critical products surged 29%
Trade in products considered critical in the pandemic response grew rapidly in the first half of 2020, with a year-on-year increase of 29% (imports and exports increased by 31% and 27%, respectively). Total trade for these products in the first half of 2020 alone, valued at US$ 381 billion, was equivalent to 63% of trade in the full year of 2019.

Among these critical products, imports of face masks almost doubled (a 90% year-on-year increase from US$ 39 billion to US$ 74 billion) in the first half of 2020, while exports increased by 84%, from US$ 38 billion to US$ 70 billion. Total trade of face masks was worth US$ 140 billion.

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Face masks are supplied mainly by China
As one of the critical protective measures recommended by the World Health Organization (WHO), wearing face masks has become part of “the new normal”. Although seemingly straightforward, the manufacturing of face masks requires several types of inputs and a relatively sophisticated process. Many countries depend mainly on imports to meet mass demand; this was especially true during the early phase of the pandemic.

In the first half of 2020, total imports of face masks reached US$ 74 billion, a 90% increase from the same period last year. China is the world’s top supplier of face masks, accounting for 56% of the world total export value (US$ 70 billion) for the first half of 2020. For the top 10 importers of face masks (excluding China itself), China is consistently the top supplier, accounting for more than 50% of imports, except into Mexico, which sources more masks from the United States. China accounts for more than two-thirds of imported face masks in many leading markets, including almost three-quarters of face mask imports in the United States and Italy, and 80% in its Asian neighbour, Japan.

China is an important buyer of face masks too
In the first half of 2020, China was also the sixth largest importer of face masks, registering US$ 2.5 billion worth of imports, in particular at the beginning of the pandemic and mainly from Germany, Japan, the Republic of Korea, and the United States.

To ramp up face mask production, China sourced intermediate materials from other countries. For instance, China’s imports of nonwoven fabric, the main material for textile face masks classified under HS subheading codes 5603.11, 5603.12 and 5603.91, surged in March and April 2020, more than doubling in the first half of 2020 compared to 2019. Half of these products was imported from Japan and the United States.

Textile face masks are the most traded type
According to the World Customs Organization (WCO), face protection products, or face masks, are normally classified under three HS subheading codes, specifically HS 3926.90 (for plastic face shields), HS 9020.00 (for gas masks) and HS 6307.90 (for textile face masks). It should be noted that these HS subheading codes cover not only face masks which are of current interest, but also other products made from similar materials or of similar characters.

The product description of HS 6307.90, under which textile face masks are classified, is “Other made up articles of textile materials, incl. dress patterns, n.e.s. [i.e. not elsewhere specified]”. As the subheading could cover a wide range of textile products, identifying the actual share of textile face masks is not straightforward. Nonetheless, looking at previous statistics, it is highly likely that the exceptional year-on-year growth rates of 618% for exports and 569% for imports during the first half of 2020 were driven by the surge in demand for textile face masks.

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Such a conclusion is also reinforced by the increase over the previous half-year – in the first half of 2020, exports were 562% higher, and imports 536% higher, than in the second half of 2019 – which was vastly higher than growth rates registered in 2018 and 2019.

No comparable export surge has been found for the other two HS codes. HS 9020.00 showed an increase of 28.5%, which was likely driven by the export of gas masks, but the magnitude was much lower than that of textile masks. Exports under HS 3926.90, where plastic face shields are classified together with other miscellaneous plastics products, actually declined in the first half of 2020. However, this subheading covers a large amount of trade in a wide range of products, and the overall decline could obscure an increase in face shield exports.

US PPE imports rose more than 300% in 2020
US imports of PPE grew at a modest rate of 2.18% in 2019. However, in 2020 (Jan-Oct) imports went up by 311.59%, due to the pandemic. Face masks accounted for almost 45% of the total PPE imports, followed by disposable apparel at 23.43%.

According to OTEXA data, China is the largest supplier of PPE to the US. Other suppliers of surgical drapes and towels to the US include Dominican Republic with a share of around 12%, Mexico 28% and Nicaragua 0.76%. Nicaragua started exporting surgical drapes to the US in 2020.

Governments support domestic production of PPE
While imports of PPE, including face masks, have increased exponentially in 2020, so has production of PPE in almost every country. India, within a span of 4-5 months, became the second largest producer of PPE and face masks in the world. Almost every country across the globe has seen a growth in domestic production of these vital products, as governments and industries responded quickly to the growing domestic demand. Countries also wanted to reduce their dependence on China which is the largest supplier of PPE to the world.

In the US, National Council Of Textile Organizations (NCTO) is pushing for policies to support the domestic production and consumption of PPE. Similarly, in Europe, PPE is identified as an important category for the SME sector. In India, the government has been supporting the growth of this industry as soon as the pandemic broke out.

According to Scott Tesser, CEO and Co-owner of Precision Textiles based in the US, “America should no longer abrogate the production of personal protective equipment to China or any other foreign manufacturer. The only way to assure our first responders’ and healthcare frontline workers’ safety is to have a plentiful supply of PPE stored and ready to be deployed on a moment’s notice.”

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Precision Textiles transitioned a portion of its manufacturing from nonwoven fabric for the automotive and bedding industries to a line of PPE fabric. Today, the company produces 4 million yards of PPE material each month. “We currently have no intention of switching back,” said Tesser.

“Over the course of my career, I have watched different production industries, especially the garment business, slowly make their way overseas, never to return. This cannot happen to the critical PPE business.”

He relates, “What our nation learned in our most dire circumstance in March was that our domestic manufacturers can rise to the challenge. It is our responsibility to continue to do so. When the virus hit our area, many US manufacturers pivoted to produce what was needed to combat the pandemic. Car manufacturers worked to create ventilators and respirators, the home furnishings industry stepped up to create hospital beds and masks, and, those of us who could, focused on working toward minimising the shortage of PPE which could be made in our factories.”

“We saw a new level of American ingenuity as car parts were used to save lives and materials used for shoes were used to create masks. In one case, workers in two different states moved into their factories for close to a month in order to ensure that some of the most needed supplies could continue being produced.

“We saw, as the outbreak continued, that domestic manufacturers were able to work together to source raw materials in order to build up stock of PPE materials so that our communities could get the supplies they needed. While these actions made us “essential businesses” during the initial months of the pandemic, they also opened our eyes to the responsibility we now have before us: to remain essential to our community until we reach the other side of this pandemic and beyond. We can and we will make these products here in America.”

This is the sentiment across the world, in every textile and nonwovens industry.


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