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India to become top cotton producer by 2022: OECD-FAO
May '14
The production of cotton in China is likely to decline 17 percent, while production in India is projected to jump 25 percent, positioning it as the world’s largest producer, says the recently released report “The Agricultural Outlook, 2013-2022”.
The report is a collaborative effort of the Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization (FAO) of the United Nations. This year’s edition of the OECD-FAO report for the first time contains a chapter on world cotton markets.
According to the report, cotton will continue to lose market share to man-made fibres over the Outlook period. Over the next decade, average price of cotton is expected to be relatively flat in real terms compared with the previous decade which included several years of record high prices since 2007, the report predicts.
“The world indicator cotton price is expected to remain relatively stable during the next decade as the volatility surrounding the 2010 spike in cotton prices subsides. By 2022, world cotton prices are expected to be lower in nominal terms than at the start of the projection period,” the report states.
Forecasting about global cotton markets, the report says they would tighten moderately as stock drawdown continues in China. “World cotton production is expected to grow by 1.6% p.a. marginally more slowly than consumption at 1.7% p.a. to reach 27.2 Mt in 2022, as the unusually high global stocks that accumulated during 2011-13 are gradually reduced.”
“China’s cotton production is expected to decline by nearly 17%, due to policy actions, while India’s production is projected to rise by 25% due mainly to increasing yields, albeit with slower yield growth than in the previous decade. A larger area planted to cotton and higher yields are expected in LDC Sub-Saharan Africa, in part due to the application of new production technology,” the report adds.
In terms of use, overall growth in world cotton consumption is expected to be marginally below its long term average rate to 2022 and to continue to lose market share to man-made fibres. “Consumption of cotton in India is expected to grow far more than in any other country, and India’s textile industry will be poised to overtake that of China in the coming decade,” the report says.
The report forecasts higher cotton imports by Bangladesh, Turkey, Vietnam and Pakistan, with China remaining the world’s largest importer. On the other hand, the US is expected to lead in exports of cotton. However, LDC Sub-Saharan exports are expected to rise by 115% and its share of world trade to more than double by 2022. 
On China, the report mentions, “While domestic consumption of textile products is likely to increase, the intensification of competition in cotton spinning products, especially from India and other countries with low cost labour, the use of cotton in China will decline. Total cotton utilisation is projected to reach 8 Mt by 2022, decreasing at a rate of 0.4% p.a. over the Outlook period, which is significantly different to the trend shown in the last decade.”

Fibre2fashion News Desk - India

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