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Cotton Industry Analysis

Cotton lint is a major fibre for textile products and other industrial and consumer products. The usage of cotton is highly dependent on consumer attitudes, fashion and taste, disposable income and the price of competing fibres. Apparel products made from cotton consistently ranks high for comfort and durability making it popular internationally.

Key facts about the global cotton market
  • The US is the largest world importer of cotton products and China is the largest global exporter of cotton products.
  • China and India compete for the title world’s largest producer of cotton. China is the largest mill consumer of cotton at about 30% of world mill use. India is the second largest and growing at about 20%.
  • Though more environmentally damaging than cotton, polyester continues to hold the largest fibre share on the cotton spinning system primarily because of price.
  • The US is the largest exporter of raw cotton at about 38% of world trade.
  • World cotton production has averaged about 120 million 480-lb bales per year over the last three years. One bale makes about 215 pairs of jeans or 249 bed sheets or about 313,600 US $100 bills.

Key themes affecting the cotton market

The key drivers for development in the cotton industry are the desire to make cotton more environmentally friendly and sustainable in its entire marketing chain while remaining competitive at the farm and manufacturing levels. The use of GMO seeds has reduced the use of herbicides and insecticides and reduced the amount of water used to produce a bale of cotton.

Modern production practices have lowered the use of labour and lowered costs from field to bale. Because labour and energy are large costs to manufacture cotton products, the textile industry has migrated perpetually to lower cost countries, primarily for cheap labour. Initiatives to improve labour standards and working conditions have become a priority when it became evident that the cheap labour model led to subpar compensation and working conditions. The desire to improve has created a movement, albeit slow, to move textile and apparel production centres closer to cotton production areas, thereby, reducing the carbon footprint to the final consumer.

Cotton as a crop commodity competes against primarily soybeans and corn at the agriculture production level, and cotton the fibre competes against primarily polyester and viscose at the manufacturing level. The increased interest in hemp in the US, after the legalization of marijuana in some states, and the inclusion of hemp as a program crop may increase its competitiveness against cotton at the farm level and potentially fibre competition at the manufacturing level.

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