Conventional cotton production and stock hit record highs in the 2011-2012 season, according to the recently released Farm and Fiber Report from Textile Exchange, gleaned from government data, industry sources and agricultural reports.
In response to the cotton shortfall of 2009-2010, cotton farmers upped their production last year to profit from the record high prices of the 2010-2011 season.
Cotton production worldwide increased last year by 6.4 percent over 2010-2011, hitting 124.2 million bales or 27.1 million metric tons.
In the wake of the rise in production, however, cotton consumption fell by 10.7 percent while stocks went up by 30 percent. Lower cotton consumption was attributed to the weakening global economy.
Last season’s end-of-year cotton stock was estimated at 69.6 million bales, the surplus pressuring process to fall by an average 99.81 cents per pound, a sharp decline but above the 60 cents per pound average of the past ten years, according to data from the USDA.
China led global conventional cotton production in 2011-2012 by producing 26.7 percent of the world’s supply. Other nations produced the following percentages of conventional cotton output:
African Franc Zone 2.7%
EU-27 1.3% (Greece, which produced 1.1 percent is included in the EU-27 tally)
Rest of the World 4.9%
Conventional cotton is the world’s most widely used fabric for clothing, bed sheets, and other textile products.
Despite its widespread use and versatility, conventional cotton is not environmentally friendly. Insecticides and chemical fertilizers used in the farming of conventional cotton cause collateral damage to water supplies, plant and animal life, and poses a health hazard for humans.
Still, some five percent of all the world’s land under cultivation is dedicated to conventional cotton. Organic cotton, by contrast, does not use pesticides and chemical fertilizers, and consumes far less water than conventional cotton.
Environmentally-friendly clothing and textiles — those that use organic rather than conventional cotton — are almost always clearly labeled as such. There are many now in the market, and more are expected to follow as consumer demand for eco-friendly products increases.
Organic cotton is not traded on any organized commodity exchange in the US.
Cotton — the conventional variety — fluctuated in price on the futures market earlier this year between 79.36 and 80.56 a pound for July delivery, down from a high of 92.5 per pound in March for May delivery.
The International Monetary Fund has forecast a 2.6 percent increase in cotton consumption for 2014. But 2014 is shaping up as the fourth consecutive year of a cotton surplus, still putting downward pressure or a stabilizing force on prices.
China is expected to accumulate more cotton from world markets in 2014, helping to stabilize prices, but sooner or later, China may begin selling its surplus, and global prices will react accordingly, tending to decline.