Given the volatility and roller coaster ride cotton has been going through in recent times, in terms of pricing and demand- supply; is adding further to the existing uncertainty in fashion business as well as disrupting the supply and global value chains. A peep into the three of the cotton world leaders India, China and the USA, at their cotton production, consumption and participation in global trade may reflect on the immediate future outlook, as what lies in stock for the fashion business.

Last Friday, October 7, 2022 was celebrated internationally as the World Cotton Day. Initialised on October 7, 2019 by the World Trade Organisation (WTO) in collaboration with four sub-Saharan African cotton producers Benin, Burkina Faso, Chad, and Mali, collectively known as the Cotton Four, the day was earmarked by the United Nations General Assembly in 2021. Together with the secretariats of the United Nations Conference on Trade and Development, the International Cotton Advisory Committee, and the United Nations Food and Agriculture Organization (FAO), the WTO Secretariat organized the event (UNCTAD). This year the theme is “Weaving a better future for cotton”. The focus is on sustainable ways to grow cotton as well as improve living and working conditions of those engaged in cotton farming such as small farmers and labourers.

The World Cotton Day is significant as about 75 countries worldwide grow cotton and their economies are benefitted through exports, downstream production lines and job generation. History has it that the oldest record of cotton farming was from India which remains the world’s second largest producer of the most-environment friendly fibre.

India launches cotton council

The government launched the Cotton Council of India on May 18, 2022 under the able chairmanship of legend cotton-man of India, Suresh Kotak. The council has been assigned to research, analyse and prepare a comprehensive plan of action to significantly improve farming methods, fibre quality, greater yields and sustainable farming. In 2022, India has produced 6,162,000 tonnes compared to China’s 6,423,000 tonnes. The USA is a distant third with 3,181,000 tonnes. . Currently India supplies 18% of cotton’s global trade and its main destinations are China, the US, Bangladesh, Vietnam, Taiwan, Thailand and Indonesia. 74% of all garments exported from India are also cotton products. The Cotton Council of India has started addressing the current primary concern – the price of cotton is rising despite a large area being under cotton cultivation. This has been attributed to poor levels of productivity among Indian farmers. Low productivity is perhaps the biggest hurdle India has to overcome to continue retaining its lead and work towards greater sustainability.

China flooding Indian market with cheaper rates

Over the last few years, the growth rate of China's cotton spinning industry is declining and labour costs, land rent and the prices of other production factors are on an upward spiral, thereby increasing the costs of cotton planting and decreasing the profits and area of cotton planting. The Chinese government is transferring cotton production capacity to Xinjiang which enjoys lower production cost compared to other parts of China. In 2020, the cotton planting area in China was about 3.168 million hectares, down 5.10% YOY.

Due to the pandemic, domestic consumption of cotton products has experienced a slow-down, leaving China with excess to export. The US ban on textiles originating from the Xinjiang province of China has further added to the crisis and China has found an opportunity to flood the domestic Indian market with cotton yarn that is cheaper than the domestic one, compounding to price issues India faces. Further, the US ban has hit India's cotton yarn spinning industry, with half of the mills becoming idle in the past four to five months.

USA’s 2022 crop forecast lowest in 13 years

According to USDA’s August forecast of the 2022 cotton crop, U.S. production is projected at 12.6 million bales, considerably below last season’s final estimate of 17.5 million bales and the lowest crop estimate in 13 years. Compared with 2021, cotton harvested area is also forecast significantly (31%) lower, but a higher national yield limits a further production decline. However, The US is projected to continue being the world’s largest cotton exporter and its share of global trade in 2022-23 at an estimated 27%.

As the world concluded its second World Cotton Day, stakeholders are hopeful for an outcome that irons out the current crises and establishes profitability through sustainability and support the fashion industry as a stable and sustainable raw material.

By Fashionating World
https://www.fashionatingworld.com/new1-2/can-cotton-weave-a-better-future-for-fashion