Cotton Trade Analysis - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)
The global cotton trade is projected to register a CAGR of 4.2% during the forecast period (2021-2026). Due to COVID-19, the global cotton trade is impacted by primary factors of supply and demand. Many of the textile and apparel companies have filed for bankruptcy due to the cancellation of export orders. Due to economic and logistic factors, the global trade of cotton has taken a downturn, affecting every link of the supply chain. Cotton is essentially grown for its fiber, which is used as raw material for textile industries. It is an important commodity in the world economy which is produced in more than 100 countries and heavily traded agricultural commodity, with around 150 countries involving in the export and import of cotton. Cotton is also a very political crop because of its significance in world trade and in improving the economies of many developing countries. In many countries, cotton exports are not only viewed as a key contributor to foreign exchange earnings but also for a noteworthy proportion of GDP and tax income. It is playing a vital role in economic growth in Africa where 37 of the 53 African countries produce cotton and 30 are exporters. Many Central Asian countries such as Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan are also very dependent on cotton exports.
United States Dominates the Global Exports
The United States plays a major role in the world cotton market, in terms of production and export of cotton. During 2019-2020, United States produced approximately 20.0 million bales of cotton, contributing to nearly USD 7.0 million of its total value. The United States is the leading exporter in the world's cotton market, accounting for 37.8% of global cotton exports in 2019. It supports the world's textile industries and provides opportunities for domestic farmers to market their products globally, by participating in global trade. Since 2016, United States export levels raised significantly. This is due to the production of high-quality crops combined with the low production levels from other producers. The United States is also a major player in the exports of cotton goods. As it exports a majority of cotton fiber, it also imports textiles and apparel products from India, China, Bangladesh owing to 50 percent of the country's cotton product imports.
China Dominates Global Cotton Imports
China was the largest importer of cotton in the world. The value of cotton imports rises significantly from USD 8,615,702.0 thousand in 2017 to USD 9,231,143.0 thousand in 2019. The major exporters of cotton to China are Vietnam, India, Brazil, United States, and Australia. In 2019 Vietnam and India's cotton export to China were valued at USD 2,403,182.0 thousand and USD 1,206,135.0 thousand, respectively.