Pakistan is likely to see a fall in cotton consumption by 12 per cent this year. By consuming 2.2 million tons of cotton it would be exporting around $13 billion of textile products. Bangladesh and Vietnam with a 22 per cent and a 13 per cent increase in their cotton use would generate exports worth $54 billion. This means value addition in these two non-cotton producing countries is over four times higher. Both Bangladesh and Vietnam are among the low value-added textile product exporters.

China, Turkey, Sri Lanka and Tunisia add much more value to their textiles. The ongoing drop in polyester prices has caused a reduction in the share of cotton in the global market, particularly in China where polyester has been favored over cotton in the recent season.

Cotton consumption in China is forecast to go down five per cent in 2015-16, though it still remains the world’s largest consumer of cotton. When cotton prices dropped at the start of 2014-15, the gap between international cotton prices and polyester prices in China, which accounts for 72 per cent of the world’s polyester production, narrowed significantly and greatly improved the competitiveness of cotton.

However, this only lasted for a few months, as polyester prices continued to drop, while cotton prices stabilised. In 2015-16, the gap continued to widen.