The USDA Foreign Agricultural Services (FAS) published eight Cotton and Product Updates last month:
Africa: The USDA FAS in Dakar provides updates about the cotton harvest for Senegal, Mali, and Burkina Faso. Interestingly they say that MY 2024/25 consumption is anticipated to increase by 4% with the “relaunching of the textile industries” in all three countries.
Brazil: The USDA FAS in Brasilia reports that Brazil surpassed the U.S. in cotton production and exports for the first time on record and the MY 2024/25 planted area is expected to reach a new record due to favorable prices and lower production costs.
China remains Brazil’s main cotton importer, having bought 674 thousand bales (147 thousand MT) since August 2024. … Vietnam surged ahead, importing 312 thousand bales (68 thousand MT) in October, followed by strong showings from Pakistan, India, and Bangladesh.
China: The USDA FAS in Beijing share detailed information about cotton production and consumption in China.
Chinese industry contacts maintain a cautiously optimistic outlook for a moderate rebound in exports in the fourth quarter of 2024 and beyond. Uncertainties include unstable external demand recovery, competition from other textile and apparel exporting countries, and intensified geopolitical risks. Industry contacts have shared with FAS China staff that if the United States imposes higher import duties on Chinese-origin products, it could reduce PRC exports. … In volume terms, industry data indicate in the first three quarters of 2024, the United States market took 11 percent of China’s cotton textile and apparel exports, which was 22 percent of the U.S. import market (by volume). India was the second largest supplier to the United States, taking 18 percent of the market by volume. Chinese industry sources believe China’s exports to the United States might be replaced by India and other suppliers in case additional duties are imposed on Chinese products. Additionally, Chinese industry contacts report that the enforcement of the Uyghur Forced Labor Prevention Act (UFLPA) remains a key reason for unstable trade of textile and apparel products between China and the United States.
Since China supplies cotton yarn to many manufacturers in Asia, we also share the following chart showing a rebound in yarn production.
Finally, we share a chart that shows where China’s textile and apparel exports went during the first nine months of 2024. ASEAN countries have a larger share than the U.S. or the EU.
India: The USDA FAS in New Delhi forecasts the MY 2024/25 cotton production will remain unchanged and exports of cotton products will continue to grow.
Preliminary textile export data published by the Ministry of Commerce and Industry shows cotton-based yarn, fabrics and home textile shipments rose nearly seven percent by value in October, as compared to last year, while readymade garment shipments are up by 35 percent.
USDA also highlights the BharatTex trade show in February. USFIA members are invited to attend.
Mexico: The USDA FAS in Mexico City reports that the planting area in MY 2024/25 is expected to decrease as farmers switch to more profitable crops due to drought conditions and constraints on planted area and yield. USDA highlights the importance of sustainability for Mexican textile producers.
Another challenge facing domestic cotton consumption is incorporating sustainable practices in clothing manufacturing, with some textile producers beginning to adopt circular economy practices for new clothing production. For instance, clothes that were never sold are now recycled and incorporated into the production of new fabrics and clothes. Cotton consumption could decrease as consumer preferences shift towards clothing produced using sustainable practices. However, the prices of such fabrics and clothes could be higher than conventional manufactured clothes. While the effects on cotton consumption are unknown, the impact will be highly price dependent.
Pakistan: The USDA FAS in Islamabad revised the cotton production forecast downward. But there is a positive story about Pakistan’s exports of textile and apparel products.
Textile exports during the first quarter of 2024/25 were the highest of any quarter since September 2022. Despite ongoing concerns about new taxes, high energy and financing costs, and reports of some mills halting operations, the increased pace of exports indicates renewed strength in textile sector performance and in cotton demand.
Turkiye: The USDA FAS in Ankara projects that cotton production will increase to 865,000 MT due to larger planting area and better weather conditions. However, they report difficult times for some textile and apparel producers.
Some companies from the Turkish textile and apparel industries are shutting down, partially closing, or going bankrupt because of low demand for finished garments by brands from Turkiye, while some others are moving investments to lower-cost production countries, like Egypt.
They are more positive about BCI cotton.
The production of cotton under the Better Cotton Initiative (BCI) is estimated at about 117,000 MT (about 551,000 bales) for MY 2023/24, according to the Better Cotton Practices Association of Turkiye (IPUD). BCI production is increasingly important as the Turkish textile and apparel industry seeks to produce sustainable and traceable products to meet the demands of high-end consumers in Europe and the United States.
Vietnam: The USDA FAS in Hanoi forecasts a 4% increase in cotton imports based on global demand for textiles and garments. Australia, Brazil, and the U.S. remain Vietnam’s largest cotton suppliers.
Vietnam textile and apparel exports started to rebound in May 2024 and reached a peak of $4.5 billion in August. Although exports in September and October were lower than the August peak, they remained robust. Industry experts expect that demand for textile and apparels, including yarn, from major markets will bounce back due to the interest rate cut by the Federal Reserve as well as a decline in exports from major competitors including China and Bangladesh. Vietnamese textile and garment producers continue to make significant changes in their sourcing and manufacturing processes to comply with recent U.S. and EU regulations related to traceability, sustainability, forced-labor prevention, and climate protection.