Trouble in the land of cotton


cottonmarketnews_cotton1_255_600x480With a dampening of demand in traditional U.S. cotton export markets and more competition from low cost overseas producers, cotton prices have bottomed out.

Largely dependent on sales offshore, America’s cotton trade faces rough sailing in all sorts of waters:

China, the world’s biggest market, is importing far less cotton, as its textile industry slows and the country attempts to whittle down domestic stockpiles. A trade dispute with Turkey has severely diminished demand for US cotton from America’s second most important market. Increased competition from cotton producers Brazil and Australia come at a time when the US dollar is strong and the Brazilian real and Australian dollar are particularly weak. Low-cost suppliers such as India and Bangladesh are making waves. Textile manufacturers across the globe are looking more and more to just-in-time inventory for their raw materials, which translates into smaller shipments and tighter schedules for shippers. Polyester is once more giving cotton a run for its money.