Interviews
USDA cotton projections to 2016
01 May '07
4 min read
• The EU, Japan, Taiwan, and South Korea all steadily reduce their cotton imports as textile trade reforms and/or higher wages in these countries drive textile production to countries with lower wages and other costs.
Globalization is expected to continue to move raw cotton production to countries with favorable resource endowments and technology. Land is a key input factor, but the importance of technology has been highlighted by the impact of India's rapid adoption of genetically modified cotton, nearly all Bacillus thuringiensis (Bt) cotton.
Traditional producers with large land bases suitable for cotton production are expected to benefit from post-MFA trade patterns. Such producer/exporter regions include the United States, Sub-Saharan Africa, and Brazil.
• The United States continues as the world's leading cotton exporter throughout the projections. Exports dip to 17.2 million bales in 2008/09, but grow to more than 19 million bales by 2016/17.
• The Central Asian countries of the former Soviet Union have been the principal U.S. competitors since the early 1990s. However, government policies in Central Asia promoting investment in textiles have resulted, to some extent, in exports of textile products rather than exports of raw cotton. Furthermore, the region's economic liberalization is far from complete, and cotton production is expected to grow only slowly.
• Sub-Saharan Africa's exports have overtaken Central Asia's exports in large part due to economic reforms. West Africa's 1994 exchange rate devaluation led to nearly a decade of growth within the region's monetary union. As West Africa's production gains began to lag at the end of the 1990s, several southern African countries began increasing their cotton production, aided by reforms such as eliminating marketing board monopolies. Continued increases in output are expected as producers take advantage of more export-oriented government policies, and Bt cotton is eventually adopted by the region's producers.
• Improved Indian cotton crop yields, in part due to the adoption of Bt cotton, have raised India's output in recent years. Rapid yield growth is projected to continue with the increase in cotton output being used for domestic textile production rather than for export.
Globalization is expected to continue to move raw cotton production to countries with favorable resource endowments and technology. Land is a key input factor, but the importance of technology has been highlighted by the impact of India's rapid adoption of genetically modified cotton, nearly all Bacillus thuringiensis (Bt) cotton.
Traditional producers with large land bases suitable for cotton production are expected to benefit from post-MFA trade patterns. Such producer/exporter regions include the United States, Sub-Saharan Africa, and Brazil.
• The United States continues as the world's leading cotton exporter throughout the projections. Exports dip to 17.2 million bales in 2008/09, but grow to more than 19 million bales by 2016/17.
• The Central Asian countries of the former Soviet Union have been the principal U.S. competitors since the early 1990s. However, government policies in Central Asia promoting investment in textiles have resulted, to some extent, in exports of textile products rather than exports of raw cotton. Furthermore, the region's economic liberalization is far from complete, and cotton production is expected to grow only slowly.
• Sub-Saharan Africa's exports have overtaken Central Asia's exports in large part due to economic reforms. West Africa's 1994 exchange rate devaluation led to nearly a decade of growth within the region's monetary union. As West Africa's production gains began to lag at the end of the 1990s, several southern African countries began increasing their cotton production, aided by reforms such as eliminating marketing board monopolies. Continued increases in output are expected as producers take advantage of more export-oriented government policies, and Bt cotton is eventually adopted by the region's producers.
• Improved Indian cotton crop yields, in part due to the adoption of Bt cotton, have raised India's output in recent years. Rapid yield growth is projected to continue with the increase in cotton output being used for domestic textile production rather than for export.
United States Department of Agriculture
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