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US cotton on the upswing

The US cotton market is facing a surge in demand. Typical demand factors include a change in consumers’ tastes and preferences (a switch from the acid-based crude oil polyester as well as the desire for a pollution-free fiber). The price competition between polyester and cotton has shifted towards cotton. This was led by China cracking down on polyester manufacturing facilities because of water and air pollution. Additionally, consumers are again expressing a desire to return to the comfort offered by cotton.

The past week established a near lifetime record of weekly sales and shipments. More such weeks will be forthcoming. The Australian and Brazilian crops are essentially sold out, and Indian export sales are delayed and limited. Thus, the demand for US cotton – already one of the cheaper growths in the world – will do nothing but boom.

A counter-cyclical tariff on cotton by Turkey could disrupt some established trade flows, but the critical shortage of US quality cotton this year and the next would mean that the solid Turkish market honed out by US merchants and cooperatives would shift to other export locations and US export volume would not be hurt. Simply, Turkey would end up paying more for cotton than it currently does.

Last modified on Tuesday, 13 March 2018 06:05