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Bangladesh to emerge as the world’s biggest cotton importer

Bangladesh may overtake China as the world's biggest cotton importer in the current crop season thanks to strong demand from apparel makers, according to data from the US Department of Agriculture. In the year ending July 31, 2016, Bangladesh may import a record 5.75 million bales of the fibre, up 6.5 per cent from a year earlier, said the USDA last week. One bale weighs 480 pounds, or 218 kilograms.

China is projected to import 5.5 million bales, the lowest since 2003, according to Bloomberg. Bangladesh's share of the global cotton-export market doubled from 1995 to 2012, mostly because of the strong performance of the garment sector, the World Bank said in an October report. Since 2009, the country has been the world's second largest exporter of clothing after China.

China is grappling with wage inflation. It has more-than-ample stock: most of the 104.4 million bales of global stockpiles predicted by the USDA in the current crop year are in China. Also, unlike Bangladesh and several other Asian nations, China has curbs on imports in the form of quotas and tariffs, and Bangladesh, Vietnam and Indonesia are gaining market share.

While cotton use by Bangladeshi mills is forecast to rise 10 per cent in 2015-16, it will jump 20 per cent in Vietnam, according to the International Cotton Advisory Committee. The International Monetary Fund's most recent macroeconomic outlook projects global income growth in 2015 at its slowest in 6 years. Low polyester prices relative to cotton, issues associated with China's transition to new cotton policies and adjustments to higher wages are also factors limiting consumption growth in recent years, the USDA report also said.

World cotton production in 2015-16 is forecast to be 103.7 million bales, which is 13 per cent below last season, as lower area combined with a reduced yield will push the global crop to its lowest since 2009-10. Production for the top two producers -- India and China -- is projected to account for a combined 51 per cent of the world total, with forecasts of 28.5 and 24.3 million bales, respectively. For India, production will decline for the second consecutive year in 2015-16. The decline is more dramatic for China, as production is forecast to fall by 5.7 million bales to 24.3 million bales in 2015-16.

www.usda.gov

 
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