Saturday, June 15, 2024

Slow growth to affect the cotton industry for years to come?

Cotton processors in Botswana will be unhappy with the reduction in cotton-lint production in South Africa ÔÇô five percent down from estimates made by Cotton South Africa last month. Botswana purchases seed cotton from a South African gin, as do ginners in Swaziland and Namibia .

Declining production impacts on the cotton industry’s value chain. According to a report released by Cotton South Africa , the amount produced represents about 14 percent less than the previous season’s crop. Cotton South Africa , which represents growers, processors and textile makers, has now forecast production of a total of 42 024 bales.

The decrease appears to be part of a worldwide trend, however, with the International Cotton Advisory Committee (ICAC) predicting that world cotton production is set to decrease by about five percent to 22.2 million tons in 2009/10. This is due to lower crop yields and a decrease in cotton’s price competitiveness as against competing crops. World cotton yields have entered a period of slow growth and the picture is less than rosy.

Despite these indicators, ICAC predicts that the world cotton trade will increase by about six percent in 2009/2010 to seven million tons. But cotton stocks are expected to fall by about 13 percent, which would be the biggest decline in seven years.


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