Bangladesh and Vietnam are expected to experience the fastest growth in cotton consumption and trade over the decade due to their competitive labour and production costs, which will lead to significant expansions in their milling capacities, according to a global report.
The report titled 鈥極ECD鈥慒AO Agricultural Outlook 2024鈥�2033鈥� said that over the next decade, global consumption of raw cotton was projected to increase by 1.7 per cent annually, driven by population growth and rising incomes in middle- and low-income countries.
The demand in the textiles and apparel sectors, as well as competition from substitutes, would remain key factors influencing raw cotton consumption, said the outlook, a collaborative effort by the Organisation for Economic Co-operation and Development and the Food and Agriculture Organisation of the United Nations.
The report projected that the global cotton trade would expand by 2.1 per cent annually, reaching 12.4 million tonnes by 2033, driven largely by increased mill use in Bangladesh and Vietnam, which heavily rely on imports to support their expanding textile sectors.
It also said that imports of raw by Bangladesh and Vietnam would grow by over 3 per cent annually, significantly contributing to global trade dynamics.
The OECD-FAO Agricultural Outlook said Bangladesh鈥檚 mill consumption of cotton would increase to 2.42 million tonnes, which was 1.71 million tonnes in 2023.
The report showed that the country鈥檚 import share of cotton would be 18 per cent in 2023 while the China would gain the highest 23 per cent of global share.
The United States would remain the largest exporter, with its share of world trade reaching 31 per cent by 2033, it mentioned.
Global cotton production is projected to steadily increase to 29 million tonnes by 2033, marking a 17-per cent rise from 21.14 million tonnes in the base year of 2004.
The growth will primarily stem from key producers; India is expected to contribute approximately 38 per cent to the global increase, followed by the United States (27 per cent) and Brazil (21 per cent).
The report also said that the reliance on imports, coupled with the projected growth in consumption, underscored Bangladesh鈥檚 crucial role in the global cotton market.
According to the outlook, the phase-out of the Multi-Fibre Arrangement in 2005 initially favoured Chinese textile producers, but Bangladesh and Vietnam saw robust growth in their textile industries driven by abundant labour, low production costs and government support measures.
It said that Vietnam鈥檚 accession to the World Trade Organisation in 2007 and significant foreign direct investments, particularly from Chinese entrepreneurs, further boosted its textile sector.
Additionally, free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the EU-Vietnam Free Trade Agreement facilitated greater market access for Vietnamese textile exports.
Similar foreign investments and FTAs contributed to Bangladesh鈥檚 emergence as a major global player in textiles.
Furthermore, the report also said that the US-China trade dispute increased mill use in Bangladesh and Vietnam, driving their textile industry expansions.
In Bangladesh, investments in spinning capacity driven by increasing domestic demand for yarn and fabric are expected to raise cotton fibre consumption by 3.3 per cent annually, solidifying its position in the global textile market and significantly contributing to its economic development, the outlook observed.
Despite this shift, China is expected to retain its position as the largest cotton processing country in 2033, followed by India, with annual consumption growth projected at 0.9 per cent and 1.5 per cent respectively over the next decade.
According to the outlook, the global cotton production would grow as a result of improved yields and higher compliance with sustainable standards.
The leading producing countries 鈥� India, China, the United States, Brazil and Pakistan 鈥� are expected to account for about 77 per cent of global output by 2033.
The report identified that over the past decades, global demand for textiles fibres has sharply increased, driven mainly by population and income growth, particularly in low- and middle-income countries and the expanding demand has been largely supplied by chemical fibres.
Synthetic fibres offered diverse advantages over cotton, such as durability, wrinkle resistance, moisture-wicking properties and competitive pricing, leading the textile manufacturing industry to increasingly favour them over cotton fibres, it said.
As a result, global consumption of natural fibres, including cotton, reached its peak at 26.5 million tonnes in 2007, but declined to approximately 24.4 million tonnes in the period from 2021 to 2023.
Since the early 1990s, non-cotton fibres have steadily gained market share, reaching 78.2 per cent in 2023, while the cotton鈥檚 share declined to 21.8 per cent, the report showed.
It also said that per capita consumption of non-cotton fibres continued to rise significantly, contrasting with stagnant or declining trends in per capita cotton consumption in recent years.
According to the Bangladesh Textile Mill Association, the country鈥檚 cotton imports in the financial year 2023-24 stood at 7.5 million bales.
