Demand in the textiles and apparels sectors, as well as competition from substitutes, will remain key elements influencing raw cotton consumption, the report, released recently by the Paris-based Organisation for Economic Cooperation and Development (OECD) and Rome-based Food and Agriculture Organisation (FAO) of the United Nations, said.

Asian countries, notably Bangladesh and Vietnam, are projected to see the fastest growth in cotton consumption over the next decade.

Due to competitive labour and production costs, a further expansion in the milling capacity of Vietnam, Bangladesh and India is expected over the next decade.

China is expected to remain the largest cotton processing country in 2033, followed by India.

In the coming decade, global lint cotton production is expected to increase at 1.3 per cent per annum, reaching 29 million tonnes (Mt) by 2033. This growth is primarily expected to be supported by improved yields, estimated at 1.1 per cent per annum, with a smaller contribution from the expansion of harvested areas at 0.2 per cent per annum.

Cotton production is expected to be supported marginally by area expansion in Brazil and in the United States. A decline in area is expected in China, while production is projected to remain relatively stable due to higher yields.

China, however, is expected to retain its position as the world’s largest cotton producer, alongside India. Together, these two countries are projected to account for almost half of the global production by the end of the Outlook period.

Over the next ten years, global trade of lint is expected to increase at 2.1 per cent per annum, reaching 12.4 Mt by 2033. This growth is expected to be driven by strong demand from countries with expanding textile industries such as Bangladesh and Vietnam, which heavily rely on imports due to insufficient domestic production capacity.

In addition, the stagnant growth rate of production in China is expected to spur imports over the next decade. The growing gap will be filled mainly by top producing countries like Brazil and the United States, which will export an increasing share of their production.

Overall, the global cotton market structure is expected to remain relatively stable in the next decade, with the United States and Brazil set to persist as the largest exporters of raw cotton in 2033.

International cotton prices in real terms are foreseen to trend slightly downward in the medium term.

Consumers’ concerns about the environment and the growing demand for sustainable and organic cotton are expected to boost demand for cotton, although this may be partly offset by the impact of circular economy business models, particularly recycling and second-hand.

On the supply side, the main source of uncertainty is yield risk, due to extreme weather events, unsustainable water usage and pest infestations.

Fibre2Fashion News Desk (DS)