Market Trends of Cotton Industry
Increasing demand for the cotton exports
- The increasing applications and usage of cotton in various industries, including apparel manufacturing, home furnishings, and manufacturing of Industrial products, are driving the market's growth. Medical gauze, cotton swabs and rounds, and traditional diapers are all made using cotton. In addition, cottonseed oil is derived from cotton plants and can be used for cooking, soap making, or cosmetics.
- Owing to the increasing applications, the demand for cotton from many countries across the globe is increasing. For instance, according to the US Department of Agriculture (USDA), the United States was the leading exporter of cotton worldwide in 2021/2022. In that time period, the US cotton industry had an export volume of about 3.2 million metric tons. Brazil accounted for the second largest exporting share, with an export volume of 1.72 million metric tons, followed by India and Australia.
- Moreover, the United States plays a vital role in the global cotton market, acting as a key producer and exporter of fiber. The United States textile mills presently consume approximately 7.6 million bales of cotton annually. Eventually, about 57% of it is converted into apparel, more than a third into home furnishings, and the remainder into industrial products.
- Cotton's competitive share of US-produced textile end-uses shows a steady increase at approximately 34%. Hence, such increasing demand for cotton is eventually expected to raise exports during the forecast period.
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Asia Pacific Dominates the Global Production
- Asia dominates global production. China leads the global production and export market, but most of the cotton produced is domestically consumed. Twenty-four of the 35 provinces of China grow cotton, with nearly 300 million people involved in its production.
- According to the US Department of Agriculture, in the crop year 2021/2022, cotton production in China amounted to around 5.88 million metric tons. India holds second place with 5.33 million metric tons of cotton production.
- Over the years, the region has achieved a significant quantitative increase in cotton production. According to the cotton corporation of India, India is one of the world's largest cotton producers, accounting for about 22% of the world's cotton production. The yield per kgs hectare, which is presently 469 kgs/ha, is still lower than the average export yield of about 787 Kgs/ha. Similarly, while the world's cotton production for 2021 accounted for 26.36 million metric tons, India alone accounted for about 5.79 million metric tons of cotton production.
- Moreover, the dominance of the textile sector prevails in both China and India, as it consumes most of the cotton produced in the country. Hence, such instances as a high requirement for cotton in major countries like India and China in Asia-Pacific are expected to drive the demand for increased cotton production in the same region during the forecast period.
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