Low output & higher consumption to prop imports of US cotton

03 May '06

3 min read

Colombian cotton imports are expected to increase 45 percent to reach 44,500 tons in 2005/06 MY and US cotton will supply nearly 80 percent of this requirement. The increase is due to a reduction in local production, and increased consumption.

Colombia continues to support cotton production by guaranteeing a high minimum price to growers. Colombia reached an agreement on a free trade with the US in February 2006 that will be implemented after approval by the US and Colombian legislatures.

Colombian production is expected to fall by nine percent to 47,300 tons in 2005/06 MY and to decline a further 2 percent in the following year, due mainly to reduced area planted in marginal regions for cotton production. Consumption is expected to grow 3.3 percent in 2005/06 year and maintain this rate in the following year.

Export growth of textile and garment products will fuel the expansion of cotton consumption. Cotton imports will offset the reduction in local production, and imports are forecast to reach 49,500 ton in 2006/07 MY.

The US supplied 96 percent, 38,286 tons, of total Colombian cotton imports in 2005, and it is forecast to continue as the main supplier of imported cotton for the Colombian textile industry. Cotton stocks are estimated to represent 2 months of consumption, a level that is considered adequate for the industry.

Colombia reached an agreement on a free trade with US on February 2006 that will eliminate the tariff on cotton imports once it is implemented (most likely during 2007).

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