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China and demand in the global cotton equation

Finding new markets and applications is vital for the global cotton sector

With the commencement of harvest in the High Plains of Texas, stakeholders of this important sector gathered today at Lubbock-based Plains Cotton Growers, Inc. (PCG).

China and global cotton equation
Figure: The global cotton supply is above the demand, which emphasizes the need to create new opportunities.

The yield may not be a bumper as expected due to the hot July and August months in the High Plains of Texas. Hot summer days are affecting the yield particularly in the dryland, where half a bale per acre seems to be the average yield.

The weather pattern this summer showed that there were 43 days above 95 degrees F, which influenced the blooming, according to discussions among cotton producers.

The cotton supply is above the demand, which emphasizes the need to create new opportunities.

“It’s the demand that matters. We are not seeing demand increase worldwide,” stated Steve Verett, Chief Executive Officer of PCG.

Suresh Kotak, Cotton Industry Leader from Mumbai, India shared the same view a few years back with this scribe, which highlights the pressure on this sector for value-addition.

Although, the ongoing trade war between the United States and China has certainly put a dent in the market, China may not alone provide some respite, given the supply situation. The price of beans needs to be watched, according to Darren Hudson, Professor of Agricultural Economics at Texas Tech University.

As the price of beans increases, shift to beans will vacate some acres from cotton, which could bring the supply down—this again depends on a resolution to the ongoing trade situation with China, a major importer of soybeans.

The need to develop new cotton products is felt by spinners as well. Particularly, in India, there is excess spinning capacity, that happened in recent years.

Increasing quality and productivity without increasing spindles should offer some quick solution according to Shanmugam Velmurugan, General Manager of Jayalakshmi Textiles, a 70,000-ring spindle spinning mill in Aruppukkottai, India.

Quality of cotton will be a key contributor towards high-quality yarns with less contamination. Exporting countries like the United States are paying much attention to plastic contamination, a worthy effort that is being well received by importers.

With about 24,000 bales (480 lbs. each) classed so far in the Lubbock classing office, quality seems to be good such as micronaire. Interesting to watch as to how the staple grades will evolve, again due to very hot summer days.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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