C
otton data, when analyzed over the five-year time series from the 2000-01 through 2004-05
marketing seasons, illustrate the global shifts in the development of cotton production and the
growth of the textile industry represented by cotton consumption. China, India, Pakistan, Turkey,
the United States and Brazil lead the world in both cotton production and consumption. But
significant markets for consumption, like Indonesia, Thailand, Mexico and Bangladesh, point to
growing usages not supported by domestic production.

In terms of exports, Uzbekistan is second to the United States in global cotton exports. The
Africa Franc Zone, Australia, Syria, Egypt, Turkmenistan, Tajikistan and Kazakhstan are not to be
ignored as significant suppliers some with the potential for developing a domestic consumption
base.

There is much more to the global cotton story than simply matching a country’s cotton
production with its cotton consumption. Cotton shipments span the globe, with cotton traded and
purchased to meet the quality and production needs of industry. Domestic production may not meet
the consumption criteria of a country, and imported cotton may be necessary to meet those demands.
However, growth rates of a country’s supply and consumption of cotton do shed some light on the
shift in both the global business of growing cotton and the global business of textiles.

Increasing consumption rates clearly illustrate the growth in the cotton sector of a
country’s textile industry. Increases in cotton production when there is a lack of domestic
consumption point to a country’s development as an exporter of cotton fiber.

Although some people may assume that a country’s economic development level may influence
whether the country is a cotton supplier or cotton consumer, this is an assumption not
substantiated by the data. Such an assumption is falsely based on the idea that agriculture and
manufacturing do not share at some level in the improvement associated with the development level
of the country. There are efficiencies in the consumption and production of cotton that dictate
activity levels in these separate yet linked industries.

A domestic supply of quality cotton is a competitive advantage for a domestic cotton textile
industry. The market factors facing this consumption, however, can negate that competitive
advantage. This is illustrated by the United States with falling consumption and a developed
country with rising production.

China, India, Pakistan and Turkey collectively consumed 50.3 million 480-pound bales of cotton
in the 2000-01 marketing season, accounting for 54 percent of the total global consumption of 92.3
million bales for the season.

In 2004-05, with total global consumption rising to 108.7 million bales, these same four
countries represented 66 percent — a full two-thirds — of the global consumption of cotton.

On the supply side, China, India, Pakistan and Turkey collectively increased output from 48
percent, or 43 million bales, to 53 percent, or 63.5 million bales, of the total global cotton
supply during the measured period — from the 2000-01 season through the 2004-05 season.

Among these four countries, a roughly 20 million-bale growth in consumption was met with a
roughly equal 20 million-bale growth in supply.

China, China, China…

US Department of Agriculture cotton data reinforce what one might expect about the growth of
China’s cotton consumption in the last five years. From the 2000-01 to the 2004-05 seasons, China’s
cotton consumption increased by 64 percent — from 23.5 million to 38.5 million bales.

In 2000-01, the country exceeded its domestic supply of cotton by 3.2 million bales. By the
end of the 2004-05 season, China out consumed its 29 million-bale domestic supply by 9.5 million
bales.

China is the world’s largest consumer and producer of cotton. Early figures for 2005-06 point
to continued expansion.

India Sees Increases In Consumption And Supply

India, like China, is another high-growth story, but with a twist. From the 2000-01 season
through the 2004-05 season, India increased its cotton consumption by 11 percent — from 13.5
million to 15 million bales.

In domestic supply, India made significant increases during the same five-year period,
increasing domestic supply of cotton by 8.1 million bales — from 10.9 million to 19 million bales —
a 74-percent increase in production.

Pakistan demonstrated even growth in the production and consumption of cotton. As the worlds
third-largest consumer of cotton, Pakistan increased cotton consumption by 33 percent from 8.1
million to 10.8 million bales from the 2000-01 season through the 2004-05 season.Over the same
period, Pakistan grew domestic production of cotton by 3.1 million bales, from 8.2 million to 11.3
million bales, or 38 percent.

Expanding consumption of cotton by 35 percent, from 5.2 million to 7 million bales over the
measured period, Turkey is a net importer of cotton. Even though it increased domestic production
by 17 percent, from 3.6 million to 4.2 million bales, Turkey exceeded domestic supply by 1.6
million bales in 2000-01 and 2.8 million bales in 2004-05.

As the fifth-largest cotton consumer and the second-largest cotton producer, the United
States has a unique position in the world of cotton. US cotton consumption has fallen by 25
percent, from 8.9 million bales in 2000-01 to 6.7 million bales in 2004-05.

Cotton production in the United States is up over the same period by 35 percent, from 17.2
million bales to 23.3 million bales. Over the measured period, the United States has gone from a
consumption level that represents 52 percent of domestic production to 29 percent of domestic
production. The United States also has shifted from third place in global consumption to fifth,
after Pakistan and Turkey.

Brazil has had level consumption over the measured period, using 4.2 million bales of cotton.
Domestic supply has increased from 4.3 million to 5.9 million bales, so while consumption is flat,
domestic supply has risen 37 percent.

As economies continue to develop, the rising appetite for consumer goods should bode well for
the future of cotton. Innovations related to both the growth and the consumption of cotton continue
to expand the possibilities for this ancient fiber. Textile manufacturing systems continue to
advance, creating the necessary flexibility to increase quality as well as yield. Textile finishes
show promise in providing consumers with durability, performance and aesthetics, which aid in the
marketing of cotton products and satisfy the demands of a growing marketplace.

March/April 2006