In the US, the world's largest cotton exporter, dry weather is wilting cotton on farms. The dry situation is especially severe in Texas, the country's largest cotton-growing region.
Farmers in southwestern states including Texas are giving up the millions of hectares of parched land they sow cotton in the spring.
Agricultural experts estimate U.S. farmers will give up 40% of the more than 5 million hectares of cotton acreage, bringing the area that can be harvested this season to its lowest level since the mid-19th century.
The US Department of Agriculture (USDA) forecasts domestic cotton production will fall to 12.6 million bales (228 kg each) this season, 28% lower than last year. This is the lowest cotton crop year since 2009. According to the USDA, US cotton stocks by the end of this season will fall to near-historic lows.
In India, one of the top global cotton producers, excessive rainfall during the rainy season and pests in states such as Maharashtra and Karnataka have affected cotton fields to the extent that the country has to find ways to import cotton. cotton to meet the needs of the domestic textile industry. India's cotton production in this crop year is forecast to fall to 31.5 million bales, while demand is 34.5 million bales.
The current heat wave in China has also raised concerns that the upcoming cotton harvest in the Xinjiang region will not be satisfactory. And now Brazil, the world's second-largest cotton exporter, is also struggling with extreme hot weather, which is causing cotton production to drop by 30%.
Dry weather is devastating cotton crops in the southwestern states of the United States. Photo: WSJ
According to the Brazilian Cotton Producers Association (Abrapa), the drought has lost 200,000 tons of cotton. With the 2021-2022 cotton harvest coming to an end, the country's cotton production is currently only about 2.6 million tons or less.
Bom Futuro, one of Brazil's largest cotton producers, which accounts for about 10% of the country's planted area, saw production fall 27% from the previous season. Julio Cezar Busato, President of Abrapa and also a cotton farmer in Bahia state, also recorded similar yields. "Dry weather has reduced the number of cotton balls and made them lighter," he said.
The combination of extreme weather events caused by climate change has caused cotton prices in the international market to increase by as much as 30% this year. In the middle of the year, cotton prices hit the highest level since 2011, causing the profit margins of garment companies around the world to squeeze.
In a teleconference with investors earlier this week, Jane Elfers, CEO of Children's Place fashion company (USA), described the soaring cotton prices as "a big problem" for garment industry.
The US and Brazil account for half of the world's cotton exports. The global supply of cotton has fallen so sharply that it has overshadowed demand concerns. The US government and analysts have predicted a decline in cotton demand as consumers reduce their purchases of clothing and economic growth slows, especially in Europe and Asia.
However, Andy Ryan, senior relationship manager at Hedgepoint Global Markets, said all signs point to cotton prices rising to "much higher" levels in the coming months.
Severe weather causes yet another difficulty for cotton buyers around the world. Peter Egli, director of Plexus Cotton Company (UK), said that the lack of rain in cotton growing areas in Australia, Pakistan and Brazil has reduced cotton quality.
According to Bloomberg, WSJ
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