Chinese consumes about one-third of cotton’s annual global production, making it the most important market in the world. Yet China has 60 per cent of the world’s cotton stock. Cotton industry leaders worked hard for years to make cotton an honest, free trade commodity, even though it is traded among countries of different political and economic standards. Fair contract parameters and quality standards are recognized worldwide through the tireless efforts of many.
Cotton will never return to its glorious days with farming costs driving producers to more high value crops, but it would still have a place on many farms without bad Chinese economic policy. Cotton is trading at the lowest prices in seven to 12 years, depending on the marketplace. Some of the stockpiled Chinese cotton was sold at an auction last year at prices 26 per cent less than what the government paid for it. A rumored sale of more stocks this summer will likely result in greater losses.
Agriculture is often a sacrificial cow in international trade talks. It’s time for agriculture to get a seat at the head of the table. China has jeopardized world cotton production. The world needs a viable cotton industry. Cotton is being killed economically.