ABSTRACT
This study delves into the intricate dynamics of the global
cotton textile industry, specifically examining the trends in production,
imports, and exports from the fiscal years 2013–14 to 2022–23. It places a
particular emphasis on the production and consumption patterns of leading
cotton-producing nations. Furthermore, the research scrutinizes India's export
trends to various countries, offering insights into its trade dynamics. The
study includes a comprehensive analysis of the cotton balance sheet and pricing
dynamics, shedding light on the factors shaping this market. In addition, the
research explores the 2030 forecasts as predicted by the OECD and FAO,
providing a glimpse of the industry's anticipated evolution. Lastly, the study
uncovers the challenges faced in the global export and import of cotton, which
have implications for stakeholders across the cotton supply chain. This
research serves as a valuable resource for industry professionals,
policymakers, and market participants, offering essential information to
navigate the complex landscape of the global cotton textile sector. In this
research simple percentage method is used to analysis the data.
Key words: Textile,
Cotton, Export, Import, Trade Dynamics and Sustainability
SECTION 1
INTRODUCTION
The global textile
industry, which serves as the backbone of the fashion and apparel sectors, has
experienced profound and transformative shifts over the last decade. Central to
this industry is cotton, a versatile and widely utilized natural fiber with applications
spanning clothing production, home textiles, and various other domains.
Understanding the intricate dynamics of cotton textile production, imports, and
exports is of paramount importance, not only for industry stakeholders but also
for policymakers and conscientious consumers, given the extensive economic,
social, and environmental implications it carries.
This research endeavors
to undertake a rigorous and comprehensive analysis of the global cotton textile
landscape, focusing on the time frame spanning from the fiscal year 2013–14 to
2022–23. During this decade, the textile industry underwent a significant
metamorphosis, driven by the dynamic interplay of evolving trade dynamics and a
burgeoning emphasis on sustainability practices. These twin forces have left an
indelible mark on the global cotton textile manufacturing and trade ecosystem.
The textile and
apparel trade between the United States and other countries reflects the
imbalances and complexities of the trade war. China constitutes around 36% of
all US textile and clothing imports, while countries like Vietnam, India,
Bangladesh, and Mexico also play significant roles. Surprisingly, higher
tariffs are often imposed on clothing imports from Asian countries other than
China, such as Bangladesh and Vietnam. However, the inclusion of textile raw
materials, yarn, and fabric in the recent list of goods subject to tariffs
indicates the possibility of future tariffs on finished textiles and apparel.
For the EU and Canada, higher tariffs on US-made clothing items may lead to a
shift in the sourcing of ready-to-wear apparel from the United States to other
countries. India, as the largest market for US textiles and apparel, faces
limited options and should focus on diversifying export markets to reduce
dependence on the United States.
A new global trade era
has emerged for the sector, and major shifts in production sites are expected
to occur. Developing countries, whose economic future is tied to this sector,
will undoubtedly expand exports; however, some will suffer from competition
from major players such as China, no longer having the guaranteed market access
that quotas provided. More developed countries are likely to see a continuing
shift of textile and apparel production to low-wage countries. Retailers have
free rein to shop in global markets. And, finally, consumers reap benefits from
the intense global competition that provides variety and competitive prices for
textile and apparel goods.
Researchers from the
International Labour Organisation (ILO) have studied the impact of the pandemic
on 10 major textile-producing nations in Asia: Bangladesh, Cambodia, China,
India, Indonesia, Myanmar, Pakistan, the Philippines, Sri Lanka, and Vietnam.
There has been an
increasing trend in the use of smart textiles in the market that use optical fibers,
metals, and various conductive polymers to interact with the environment. These
help in detecting and reacting to various physical stimuli such as mechanical,
thermal, chemical, and electric sources. This is expected to propel the growth
of the technical application segment in the market for textiles during the
forecast period.
United States and
China: The United States and China have engaged in a trade war that encompasses
various sectors, including textiles. Both countries imposed tariffs on each
other's textile and apparel products, affecting the flow of trade between the
two largest economies in the world.
United States and
India: The United States and India have had trade disputes related to various
industries, including textiles. These disputes have involved issues such as
tariffs on textile imports and access to the Indian market for American textile
products.
United States and
European Union: The United States and the European Union have had longstanding
trade tensions, with occasional disputes related to the textile industry. These
disputes have involved issues such as tariffs, trade barriers, and intellectual
property rights protection.
United States and
Turkey: The United States and Turkey have had trade disputes that have affected
the textile industry. These disputes have included issues such as tariffs on
Turkish textile exports and trade restrictions on certain textile products.
United States and
Vietnam: The United States has initiated investigations and imposed tariffs on
certain textile and apparel products from Vietnam, citing concerns about unfair
trade practices and alleged currency manipulation.
The outcome of these
trade wars will depend on their duration and how entrepreneurs adapt to the situation.
While the cost of imported goods may rise for US consumers, American products
could gain a comparative price advantage. The availability of locally abundant
cotton in the United States presents an opportunity for entrepreneurs to
venture into domestic production and serve the US market. Chinese textile
entrepreneurs may need to adjust their sourcing strategies and consider setting
up manufacturing units in other countries to mitigate the impact of higher
tariffs.
These trade wars have
resulted in complex dynamics and adjustments in the global textile industry.
The duration and strategies employed by various countries will determine the
ultimate outcomes, including the reshaping of supply chains and potential
impacts on economies and job markets.
Developing nations had
long protested the barriers to their textile and apparel goods and succeeded in
bringing an end to the quota system. As part of the GATT-sponsored Uruguay
Round of trade talks, GATT became the World Trade Organisation (WTO), and the MFA
was replaced by the Agreement on Textiles and Clothing (ATC). The ATC was
basically a ten-year phase-out plan that eliminated the quota system in three
stages. At the end of the ten years, quotas were removed on textile and apparel
products, and tariffs were reduced. On January 1, 2005, all products in this
sector came under the general WTO rules for all trade and no longer received
the special protection in place for forty years.
For Chinese textile
entrepreneurs, it is time for action. First, a prolonged trade war would mean
US cotton would become more expensive, requiring a change in raw material
sourcing strategy. Chinese mills would be forced to increase imports from other
cotton-exporting countries like India, Brazil, Australia, and Uzbekistan. Second,
entrepreneurs would have to accelerate the process of setting up manufacturing
units in other countries like Vietnam and Ethiopia. Once this is done, higher
tariffs on Chinese products would not affect exports of goods made by Chinese
companies to the United States, unless these countries also get embroiled in
trade wars with the United States by that time. However, this would lead to the
loss of jobs in China.
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. 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
hectare, which is presently 469 kg/ha, is still lower than the average export
yield of about 787 kg/ha. 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 the Asia-Pacific are expected to drive the
demand for increased cotton production in the same region during the forecast period.
In 2023, North America will account for the largest market share in the cotton
market.
It is worth noting
that trade tensions and disputes are not limited to the countries mentioned
above. Various other countries have been involved in trade conflicts related to
textiles, either as primary parties or indirectly affected by broader trade
disputes.
SECTION 1.1 The Complexities of the Textile Trade
In virtually every
developing nation, the textile and apparel industry has been the springboard
for economic development, relying on textile and apparel exports to gain
much-needed income. Consequently, intense competition grew as most countries
produced textile and apparel goods for the same markets in more affluent
countries. In both the United States and Western Europe, the combined textile,
apparel, and fiber industries were the top manufacturing employers and vital
contributors to the economy in every case. Worried about the loss of home
markets to imports, domestic producers pressured their governments to enact
measures to restrict textile and apparel imports. Political leaders could
hardly afford to ignore this pressure because these large industries
represented large, powerful voting blocs. As a result, complex trade policies
emerged at both the international and national levels to manage textile trade.
The global textile
market grew from $573.22 billion in 2022 to $610.91 billion in 2023, at a
compound annual growth rate (CAGR) of 6.6%. The Russia-Ukraine war disrupted
the chances of global economic recovery from the COVID-19 pandemic, at least in
the short term. The war between these two countries has led to economic
sanctions on multiple countries, a surge in commodity prices, and supply chain
disruptions, causing inflation across goods and services and affecting many
markets across the globe. The textile market is expected to grow to $755.38
billion in 2027 at a CAGR of 5.5%. "Evolving Trade Dynamics
"encompasses a variety of factors, such as changes in trade policies,
technological advancements, shifts in consumer preferences, economic
conditions, and geopolitical influences. These dynamics can significantly
impact how countries engage in trade, the products they produce, import, and
export, as well as the overall structure of global supply chains.
The limitation of this study is that data from India for
the years 2013–14 to 2022–23 is used. Secondly, this research is based on
secondary data and not on primary data.
SECTION
: 2 LITERATURE REVIEW
Lingxiu Dong,Panos Kouvelis(2020)In this research paper
authors interpret modelling predictions related to the impact of tariffs on
global supply chains .They had –conceptually formalize the modelling results as
applicable to tariff impact and then, interpret observed outcomes through them.
Furthermore, they identify issues not yet effectively captured in our supply
chain network and location models and thus, naturally point to future research
directions to help us better understand corporate implications of such trade
issues in a highly interconnected global environment Lu and Van Mieghem (2009)
as the benchmark model for early prediction on tariff impact in industrial
supply chains. Getting beyond the fixed price setting of the newsvendor network
and considering the strategic option of firms to respond to cost increase from
tariffs on either input materials or shipped finished goods (FGs), we discuss
the responsive pricing newsvendor network model under both demand and exchange
rate uncertainty of Dong et al. (2010)as an advanced discussion platform for tariff
implications A structural mathematical programming approach to depict
operational complexity in facility net-work choices is presented in Kouvelis et
al. (2004),and a structural equations model using global sensitivity analysis
is presented for factors influencing global facility network design in Kouvelis
et al. (2013). For other relevant research references, we refer readers to the
research monograph by Kouvelis and Su (2008)andthe reference list in Kouvelis
et al. (2013) Gene M. Grossman Princeton University Elhanan Helpma(2021) They
studied the unanticipated
tariffs on imports of intermediate goods
in a setting with firm -tofirm supply relationships. Firms that produce
differentiated products conduct costly searches for potential input suppliers and
negotiate bilateral prices with those that pass a reservation level of match
productivity. Global supply chains are formed in anticipation of free trade.
Once they are in place, the home government surprises with an input tariff.
This can lead to renegotiation with initial suppliers or new search for
replacements. They identify circumstances in which renegotiation generates
improvement or deterioration in the terms of trade. The welfare implications of
a tariff are ambiguous in this second-best setting, but plausible parameter
values suggest a welfare loss that rises rapidly at high tariff rates. Johannes
Eugster ; Florence Jaumotte; Margaux
MacDonald ; Roberto Piazza(2022) This
paper empirically investigates the impact of tariffs when production is organized
in global value chains. Using global input-output matrices, they construct four
different tariff measures that capture the direct and indirect exposure to
tariffs at different stages of the production chain for a broad set of
countries and industries. The results
suggest that tariffs have significant effects on economic outcomes, including
on countries and sectors not directly targeted. They also found that tariffs
higher up and further down in the value chain depress value added, employment,
labor productivity and total factor productivity to varying degrees. This paper
is basically relates to recent innovations in theoretical gravity models and
provides an empirical assessment of possible long-term effects of recent trade
tensions. Robert B. Handfield, Gary Graham, Laird Burns(2020) Adopting the approach of Bejan, the authors
believe that what is happening today with COVID-19 and other trade disruptions
such as Brexit and the USA imposing tariffs is creating new obstacles that will
redirect the future flow of supply chains. Haiou Mao, Holger Görg(2020) This paper considers the indirect
impact the recent tariff increases between the United States and China can have
on third countries through links in global supply chains. The most heavily hit
third countries are the closest trade partners, namely the EU, Canada and
Mexico. They estimate that the tariffs impose an additional burden of around
500 million to 1 billion US dollars on these countries. China's tariffs on US
imports have less of an effect. . Verma (2002) conducted a thorough
investigation with the aim of assessing the export competitiveness of the
Indian textile and apparel industry. The study is focused on cotton textile and
clothing and examines the entire value chain from fibre to garment and retail
distribution because the textile and clothing industry in India is
predominately based on cotton. The study's focus is on Indian exports that have
experienced a promising value increase. Meenakshi (2003) conducted a thorough
analysis of the opportunities the WTO would offer the Indian textile industry.
In order for India to fully benefit from new capacity installations and compete
favourably with other countries, it must be a true gainer. The profit margins
available to Indian textile and clothing producers will be higher because the
country's own consumption per capita is also increasing along with income and
consumption patterns. However, in the export market, prices will be influenced
by global factors, and profits will face pressure. Therefore, the exporters may
have to adopt a strategy that involves both partial exports and partial
domestic sales. Chugan (2005) emphasised the need for change in the Indian
textile industry if it wants to become more competitive over time. This paper
emphasises that having cost competence alone is insufficient to maintain the
lead and that Indian companies must have a perspective on global
competitiveness.
Di Fan Chris Lo, Andy Yeung Christopher S. Tan( )
They found that U.S. firms with direct
supply chain partners (i.e., first-tier suppliers) in China have worse
performance in terms of inventory (days of supply) and profitability (ROA).
Their further studies show that the negative impact on firms’
profitability is more severe when firms have a lower degree of vertical
integration and when firms have a higher degree of horizonal, spatial, and
cooperative supply base complexity.
Tdiscuss the implications for international operations management,
supply chain networks, and supply risk management, and provide suggestions to
supply chain practitioners and trade policy makers.
SECTION 3 DISCUSSIONS
AND INTERPRETATION
Table 1 country wise production and consumption of
cotton in world
source: DGCIS, Kolkata
Analyzing the trends in country-wise cotton production and
consumption over the given years provides valuable insights into the dynamics
of the global cotton market.
2013-14 to 2018-19: During this period, several major
cotton-producing countries, including China, India, the USA, and Brazil,
experienced growth in cotton production. India consistently ranks as one of the
top cotton producers, with its production remaining above 5 million metric
tons, indicating a significant contribution to the global cotton supply. The
balance between production and consumption in India remained relatively stable,
highlighting its self-sufficiency in meeting cotton demand. China and India,
being two of the largest cotton producers and consumers globally, displayed
fluctuations in production and consumption. Both countries have been producing
around 5-6 million metric tons annually, with China's consumption slightly
higher, reflecting strong domestic demand for cotton textiles.
2018-19 to 2022-23 (Projected): The global cotton market is
dynamic, and projections show continued growth in cotton production for most
countries. Despite fluctuations and changes in individual country production,
the world's total cotton production is expected to increase, indicating the
overall health and demand in the cotton industry.
Compound Annual Growth Rate (CAGR): The calculated CAGR of
cotton production for the selected countries over the ten-year period is
approximately -0.59%, indicating a slight overall decrease in production. In
contrast, the CAGR of cotton consumption over the same period is approximately
-0.35%, highlighting a somewhat slower decline in consumption compared to
production. These CAGR figures underscore the need for sustainable practices
and strategic planning in the cotton industry to ensure a balance between
supply and demand.
In conclusion, the analysis shows that while some countries
are experiencing fluctuations in cotton production and consumption, the global
cotton market remains resilient and is expected to grow in the coming years.
The stability of cotton production in India, one of the major players in the
cotton industry, underlines the nation's importance in the global cotton supply
chain. Additionally, the consistent performance of China and India as both
producers and consumers reflects the ongoing demand for cotton textiles in
these nations.
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Table 2 year wise India’s export of cotton to
various countries Source – DGCIS,
Kolkata The f-ratio value is 5.24773.
The p-value is .028709. The result is significant at p <
.05. p-value of 0.028709, |
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The F-ratio value suggests that there is some level
of variation in the total quantity or total value of cotton exports between the
different countries.The p-value (0.028709) is less than the chosen significance
level (0.05), indicating that there are statistically significant differences
in either the total quantity or total value of cotton exports among the
countries.Therefore, conclude that there are significant differences in either
the quantity or value of cotton exports from India to the various countriesThe
Z-value is calculated as -3.0594, and the p-value associated with it is
0.00222.The result suggests that there is a statistically significant difference
between the cotton exports to these specific countries and the overall average
of cotton exports from India. The result is significant at p < .05"
means that the observed W-value (0) is less than the critical value (13),
indicating that there is a statistically significant difference between the
cotton exports and the reference values
Let's analyze the year-wise fluctuations in the provided
data, focusing on the various parameters related to cotton, such as opening
stock, crop production, imports, total supply, total consumption, exports,
total demand, and closing stock. We'll also calculate the average fluctuations
for each parameter.
Cotton balance sheet as per COPCE (committee on
cotton production and consumption)
|
Time Interval |
Opening Stock Fluctuation
(%) |
Crop (Production)
Fluctuation (%) |
Imports Fluctuation
(%) |
Total Supply
Fluctuation (%) |
Total Consumption
Fluctuation (%) |
Exports Fluctuation
(%) |
Total Demand
Fluctuation (%) |
Closing Stock
Fluctuation (%) |
|
10-11 to 11-12 |
13.04% |
8.26% |
215.55% |
10.05% |
-3.42% |
69.37% |
13.16% |
-12.62% |
|
11-12 to 12-13 |
-12.62% |
0.82% |
94.00% |
1.02% |
12.94% |
-21.74% |
1.13% |
0.00% |
|
12-13 to 13-14 |
0.00% |
7.19% |
-21.06% |
6.25% |
5.55% |
14.93% |
13.61% |
-17.65% |
|
13-14 to 14-15 |
-17.64% |
-3.52% |
24.59% |
-3.37% |
5.17% |
-50.35% |
-7.64% |
100.70% |
|
14-15 to 15-16 |
100.70% |
-14.95% |
58.29% |
-3.03% |
1.88% |
17.17% |
-2.72% |
-41.86% |
|
15-16 to 16-17 |
-41.86% |
3.31% |
35.09% |
-2.07% |
-1.85% |
-15.12% |
-4.25% |
0.00% |
|
16-17 to 17-18 |
0.00% |
0.00% |
-48.77% |
4.15% |
2.25% |
-22.31% |
5.19% |
0.00% |
|
17-18 to 18-19 |
0.00% |
-9.81% |
123.53% |
-3.38% |
-8.11% |
-35.76% |
-7.19% |
31.63% |
|
18-19 to 19-20 |
31.63% |
8.10% |
-56.27% |
4.85% |
21.14% |
8.55% |
23.51% |
38.36% |
|
19-20 to 20-21 |
38.36% |
-3.52% |
-12.49% |
-3.62% |
-16.62% |
-45.19% |
-19.27% |
-39.80% |
|
20-21 to 21-22 |
-39.80% |
-11.39% |
92.00% |
-8.53% |
-23.44% |
9.23% |
-13.04% |
-45.15% |
|
21-22 to 22-23* |
-45.15% |
-11.39% |
-52.95% |
0.00% |
-6.35% |
-52.66% |
-15.51% |
30.40% |
|
AVERGE |
2.22% |
-2.24% |
37.63% |
0.19% |
-0.91% |
-10.32% |
-1.09% |
3.67% |
Table 3 Cotton balance sheet as per COPCE
(committee on cotton production and consumption)
SOURCE –COPCE (committee on cotton production
and consumption) of India
Over the span of several years, the cotton industry has
experienced significant fluctuations in various key parameters, shedding light
on the dynamic nature of the market. Analyzing the data year by year reveals
noteworthy trends and shifts in the cotton supply chain.During the period from
10-11 to 11-12, there was a substantial increase in both imports, soaring by
215.55%, and exports, showing a robust 69.37% growth. However, total
consumption experienced a decline of -3.42%, accompanied by a significant
decrease of -12.62% in closing stocks.Moving on to the subsequent year, 11-12
to 12-13, imports surged by 94.00%, while exports saw a significant decline of
-21.74%. Total consumption, on the other hand, increased by 12.94%.In the 12-13
to 13-14 period, cotton production recorded a noteworthy increase of 7.19%,
with exports also demonstrating a substantial 14.93% growth. Conversely,
imports declined by -21.06%, and the closing stock saw a significant decrease of
-17.65%.The period from 13-14 to 14-15 witnessed an increase in imports by
24.59%, but a remarkable -50.35% decrease in exports. The closing stock,
however, experienced a substantial increase of 100.70%.During the subsequent
year, 14-15 to 15-16, imports increased significantly by 58.29%, while exports
also showed an uptick of 17.17%. However, crop production witnessed a notable
decrease of -14.95%, and the closing stock had a significant decline of
-41.86%.The subsequent year, 15-16 to 16-17, saw an increase of 35.09% in
imports, while exports saw a decrease of -15.12%. Importantly, the closing
stock remained relatively stable.In the period from 16-17 to 17-18, imports
decreased significantly by -48.77%, and exports also saw a decline of -22.31%.
However, the total supply increased by 4.15%.During the 17-18 to 18-19 period,
imports surged significantly by 123.53%, but exports declined by -35.76%.
Additionally, crop production saw a decrease of -9.81%, and the closing stock
witnessed an increase of 31.63%.
The following year, 18-19 to 19-20, imports decreased
significantly by -56.27%, while total consumption increased by 21.14%. Crop
production also registered growth at 8.10%, and the closing stock saw a notable
increase of 38.36%.In the 19-20 to 20-21 period, imports decreased by -12.49%,
and both total consumption (-16.62%) and exports (-45.19%) experienced
significant drops. The closing stock also witnessed a notable decrease of
-39.80%.During the 20-21 to 21-22 period, imports showed a significant increase
of 92.00%, while total consumption saw a decrease of -23.44%. Exports increased
by 9.23%. Both opening and closing stocks experienced significant
declines.Projections for 21-22 to 22-23 indicate a substantial decrease in
imports by -52.95% and exports by -52.66%. Total supply and total consumption
remained relatively stable, and the closing stock saw a notable increase of
30.40%.In summary, these fluctuations in imports, exports, consumption, and
stock levels reflect the ever-changing dynamics of the cotton industry. This
analysis equips industry stakeholders with a comprehensive understanding of
market trends and data to make informed decisions as they navigate the evolving
cotton landscape.
The table provides historical annual data for cotton prices,
including the average closing price, year open, year high, year low, year
close, and the annual percentage change for the years 2013 to 2023. Here's an
analysis of the data in the table:
|
Cotton Prices - Historical Annual Data |
||||||
|
Year |
Average |
Year Open |
Year High |
Year Low |
Year Close |
Annual |
|
Closing Price |
% Change |
|||||
|
2023 |
$0.83 |
$0.83 |
$0.90 |
$0.76 |
$0.85 |
2.41% |
|
2022 |
$1.13 |
$1.13 |
$1.55 |
$0.72 |
$0.83 |
-26.29% |
|
2021 |
$0.93 |
$0.79 |
$1.20 |
$0.78 |
$1.13 |
44.14% |
|
2020 |
$0.64 |
$0.69 |
$0.78 |
$0.48 |
$0.78 |
13.14% |
|
2019 |
$0.67 |
$0.71 |
$0.79 |
$0.58 |
$0.69 |
-4.36% |
|
2018 |
$0.82 |
$0.78 |
$0.95 |
$0.72 |
$0.72 |
-8.18% |
|
2017 |
$0.73 |
$0.72 |
$0.85 |
$0.67 |
$0.79 |
11.30% |
|
2016 |
$0.66 |
$0.63 |
$0.77 |
$0.56 |
$0.71 |
11.65% |
|
2015 |
$0.63 |
$0.60 |
$0.69 |
$0.57 |
$0.63 |
4.99% |
|
2014 |
$0.76 |
$0.84 |
$0.95 |
$0.59 |
$0.60 |
-28.79% |
|
2013 |
$0.84 |
$0.75 |
$0.93 |
$0.75 |
$0.85 |
12.64% |
|
MAX |
$1.13 |
$1.13 |
$1.55 |
$0.78 |
$1.13 |
44.14% |
|
MIN |
$0.63 |
$0.60 |
$0.69 |
$0.48 |
$0.60 |
-28.79% |
Table 4 : cotton price of India
Source – DGCIS, Kolkata
Looking at the overall trend, cotton prices have experienced
both upward and downward movements, with 2013, 2016, 2017, and 2023 showing
positive annual percentage changes, indicating periods of growth. Conversely,
years like 2014, 2018, and 2022 witnessed significant price declines. , the
average cotton price across the 11-year period was determined to be
approximately $0.7999 per unit. This figure serves as a central reference point
around which cotton prices have oscillated during this timeframe. Over the
course of the 11-year period, cotton prices have displayed a dynamic pattern
characterized by both upward and downward movements. Several years stand out,
showing either growth or declines in cotton prices, which are indicative of the
market's volatility. In 2013, cotton prices saw significant growth, with an
increase of 12.64%. The year commenced at $0.75 and concluded at $0.85,
fluctuating between $0.75 and $0.93.Conversely, 2014 experienced a substantial
28.79% decrease in cotton prices. The year opened at $0.84 and closed at $0.60,
with prices ranging from $0.59 to $0.95.In 2015, cotton prices rebounded,
marking a 4.99% increase. The year began at $0.60 and ended at $0.63, with
price fluctuations ranging from $0.57 to $0.69.In 2016, cotton prices exhibited
growth, increasing by 11.65%. The year commenced at $0.63 and concluded at
$0.71, with prices fluctuating between $0.56 and $0.77.2017 also saw an
increase in cotton prices, with a notable growth rate of 11.30%. The year began
at $0.72 and closed at $0.79, with prices fluctuating between $0.67 and
$0.85.In contrast, 2018 experienced an 8.18% decline in cotton prices. The year
opened at $0.78 and concluded at $0.72, with prices ranging from $0.72 to
$0.95.The year 2019 witnessed a decrease of 4.36% in cotton prices. It began at
$0.71 and ended at $0.69, with price variations between $0.58 and $0.79.In
2020, cotton prices rebounded, with a 13.14% increase. The year opened at $0.69
and ended at $0.78, with fluctuations spanning from $0.48 to $0.78.2021 was a
standout year in the cotton market, experiencing a remarkable 44.14% increase
in prices. The year opened at $0.79 and closed at $1.13, with a high of $1.20
and a low of $0.78.Conversely, 2022 was marked by significant price volatility,
witnessing a substantial 26.29% decrease. The year commenced and ended at $1.13
and $0.83, respectively, with the price reaching a high of $1.55 and a low of
$0.72.In 2023, cotton prices remained relatively stable, recording a modest
2.41% increase. The year began and concluded at $0.83 and $0.85, respectively,
with a price range from $0.76 to $0.90.In summary, this analysis demonstrates
the dynamic nature of the cotton market, with some years reflecting growth and
others showcasing declines. The average cotton price over the 11-year period
stands at approximately $0.7999 per unit, serving as a central reference point
for understanding the price fluctuations during this timeframe. These insights
are valuable for stakeholders in the cotton industry, aiding in informed
decision-making and a deeper comprehension of historical market trends.
Forecast:
Global players in cotton market in 2030
Forecast: Global
players in cotton market in 2030
|
Forecast : Global players in cotton market in
2030 |
|||||
|
Sno |
Country/Region |
Production Percentage |
Sno |
Country/Region |
EXPORT Percentage |
|
1 |
others |
23% |
1 |
AUSTRALIA |
7% |
|
2 |
Brazil |
10% |
2 |
INDIA |
13% |
|
3 |
USA |
15% |
3 |
SUB SAHAFR |
15% |
|
4 |
CHINA |
22% |
4 |
BRAZIL |
19% |
|
5 |
INDIA |
25% |
5 |
USA |
33% |
|
Forecast : Global players in cotton market in 2030 |
|||||
|
Sno |
Country/Region |
MILL CONSUMPTION Percentage |
Sno |
Country/Region |
IMPORT Percentage |
|
1 |
CHINA |
29% |
1 |
BANGLADESH |
18% |
|
2 |
INDIA |
21% |
2 |
VEITNAM |
18% |
|
3 |
PAKISTAN |
9% |
3 |
CHINA |
20% |
|
4 |
BANGLADESH |
8% |
4 |
TURKEY |
10% |
|
5 |
VIETNAM |
7% |
5 |
INDONESIA |
7% |
Table: 5 Forecast:
Global players in cotton market in 2030
|
Note: Presented numbers refer to shares in world
totals of the respective variable. |
|
Source: OECD/FAO (2021), ''OECD-FAO Agricultural
Outlook OECD Agriculture statistics (database)'', |
CHALLENGES FOR GLOBAL EXPORT AND IMPORT OF COTTON
The global export and import of cotton face various
challenges, which can have significant economic, environmental, and social
implications. Here are some of the key challenges:
Price
Volatility: Cotton prices can be highly volatile due to
factors such as weather conditions, fluctuations in demand, and changes in
production levels. This volatility can make it difficult for both exporters and
importers to plan and manage their businesses effectively.
Trade
Barriers: Tariffs, trade restrictions, and non-tariff
barriers imposed by countries can hinder the free flow of cotton in the global
market. These barriers can increase the cost of cotton for importers and limit
market access for exporters.
Quality
Control: Ensuring consistent cotton quality is crucial for
the textile industry. Variations in quality can lead to issues in processing
and affect the final product. Maintaining quality standards across different
regions can be challenging.
Environmental
Concerns: Cotton production is resource-intensive, and
unsustainable farming practices can lead to environmental degradation,
including soil depletion and water pollution. Meeting environmental standards
and sustainability requirements can be challenging for cotton producers.
Labor
and Ethical Concerns: Labor practices in the cotton industry,
including child labor and poor working conditions, have raised ethical
concerns. Meeting international labor standards and ensuring fair labor
practices can be a challenge.
Climate
Change: Cotton production is vulnerable to the impacts of
climate change, including changing precipitation patterns and increased pest
pressures. This can lead to reduced yields and production instability.
Subsidies:
Some countries heavily subsidize their cotton production, distorting global
prices and making it difficult for unsubsidized producers to compete on a level
playing field.
Logistics
and Transportation: Efficient transportation
infrastructure and logistics are essential for the smooth flow of cotton
between countries. Poor infrastructure can lead to delays and increased costs.
Exchange
Rate Fluctuations: Exchange rate fluctuations can impact
the competitiveness of cotton exports and affect the profitability of both
exporters and importers.
Market
Access: Access to export markets and compliance with
international trade agreements can be challenging for cotton-producing
countries. Meeting the requirements of trade agreements and dealing with
protectionist measures can be barriers to trade.
Competition
from Synthetic Fibers: Cotton faces competition from
synthetic fibers like polyester, which can be cheaper to produce and offer
different properties. Changing consumer preferences for synthetic fibers can
affect cotton demand.
Pest
and Disease Management: Cotton crops are susceptible to
pests and diseases, and managing them sustainably can be a challenge.
Over-reliance on pesticides can have negative environmental and health
consequences.
Supply
Chain Disruptions: Events such as natural disasters,
political instability, and the COVID-19 pandemic have disrupted supply chains
and affected the global cotton trade.
Competing
with China in cotton exports is a significant challenge, as China is one of the
world's largest cotton producers and consumers. However, India can adopt
various strategies to enhance its competitiveness in the global cotton market:
Improve
Cotton Quality: Ensure that Indian cotton meets
international quality standards. Focus on producing high-quality cotton with
consistent fiber length, strength, and color. This can make Indian cotton more
attractive to textile manufacturers.
Invest
in Research and Development: Promote research and development
in cotton farming techniques, pest management, and genetics to increase yields
and fiber quality.
Sustainable
Practices: Embrace sustainable farming practices that reduce
environmental impact, such as reduced pesticide use and efficient water
management. Sustainable cotton is in demand, especially in markets that
prioritize eco-friendly products.
Cost
Efficiency: Streamline the cotton supply chain to reduce
production costs. This includes efficient transportation, storage, and ginning
processes.
Market
Diversification: Explore new markets and diversify the
customer base. Reducing dependence on a single market, such as China, can
mitigate risks.
Value Addition: Invest in value-added
products, such as cotton textiles and garments, rather than just exporting raw
cotton. This can lead to higher export earnings.
Trade
Agreements: Leverage trade agreements and negotiations to
access new markets and reduce trade barriers.
Government
Support: Collaborate with the government to develop
policies that support cotton farmers and exporters. This may include subsidies,
incentives, and trade facilitation measures.
Technology
Adoption: Use technology for precision agriculture, which
can increase yields and reduce input costs.
Quality
Control and Certification: Implement stringent quality
control measures and certifications to assure buyers of the quality of Indian
cotton.
Research
Market Trends: Stay informed about global market
trends, consumer preferences, and fashion industry demands. Flexibility in
adapting to changing trends is crucial.
Promotion
and Branding: Promote Indian cotton as a sustainable
and high-quality product. Develop a strong brand image for Indian cotton in the
global market.
Capacity
Building: Invest in training and skill development for
cotton farmers and industry workers to enhance productivity and quality.
Infrastructure
Development: Improve infrastructure for cotton
storage, transportation, and processing to reduce post-harvest losses and
ensure timely deliveries.
Collaboration:
Collaborate with industry associations, research institutions, and
international organizations to stay competitive and updated with industry best
practices.
Risk
Management: Develop strategies to manage price and market
risks, such as futures contracts and risk hedging mechanisms
SECTION 4 CONCLUSIONS
In conclusion, the comprehensive analysis of the global
cotton textile industry from 2013 to 2023, with a glimpse into 2030, has
unveiled several critical insights. The study explored the intricate dynamics
of production, trade, and sustainability practices, shedding light on the
evolving landscape of this essential industry. Over the past decade, key
cotton-producing nations have exhibited varying patterns of growth in both
production and consumption. India, China, and the USA have consistently held
pivotal roles in shaping the industry, while Bangladesh faced challenges in
sustaining its production levels. This nuanced analysis aids in understanding
the drivers influencing the global cotton market. India’s export trends to
various countries have demonstrated its versatility and adaptability to
changing global demand. The data highlighted India's position as a major cotton
exporter and the significance of maintaining competitiveness in international
markets The study's exploration of the cotton balance sheet and pricing
dynamics emphasized the role of market forces and policy decisions in shaping
the industry's trajectory. As we move towards 2030, it's evident that
sustainability practices will play a pivotal role. The OECD/FAO forecasts
further underscore the importance of aligning the industry with evolving global
expectations.
However, it is equally essential to acknowledge the
challenges posed by the global export and import of cotton. Market
fluctuations, trade tensions, and evolving consumer preferences present hurdles
that industry stakeholders must address. As we navigate this complex landscape,
the research serves as a valuable resource for industry professionals,
policymakers, and market participants. It provides essential information to
make informed decisions, promoting sustainable practices, and ensuring the
continued vitality of the global cotton textile sector. The insights gained from
this study are integral in shaping the future of this crucial industry as it
progresses towards 2030 and beyond.
Acknowledgements – I
express my gratitude to the Indian Ministry of Finance and
DGCIS, Kolkata For their
invaluable contribution of data to this research project.
Funding – This research received no specific grant from any funding
agency in the public commercial or not for profit sector
Declaration of conflicting interests
As the sole author of this research paper, I declare that I have no competing
interests to disclose.
SECTION: 5
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