Global cotton prices have fallen by 17 per cent. Another concern looming over cotton market is increased US production. US output is forecast to jump 20 per cent in the year from August 2019 to next July 2020. The US inventory of cotton at the end of July 2020 is expected to be up 38 per cent on the year. From August 2018 to March 2019, Chinese imports of raw American cotton were half the amount recorded in the same period a year earlier. On the other hand, the US has been slapping tariffs on cotton thread and other fiber products imported from China, raising concerns over a decline in demand for these goods.
China accounts for one-third of global cotton consumption, importing the material from the US and Brazil. China also distributes cotton thread domestically for manufacturing cotton fiber products, before exporting the finished goods to the US. The US, for its part, ranks third among raw cotton producers behind India and China, and is the top exporter of the material.
In Japan, price of domestically produced cotton threads are under pressure from imports of cheaper Vietnamese and Indonesian products. Southeast Asian countries are exporting more to Japan to compensate for the decrease in exports to China, as the global hub of the garment industry imports less thread.