Cotton consumption will rise 10 percent to more than 1 million tonnes in Bangladesh this fiscal year on the back of higher demand from garment makers and favourable government policies for the textile sector, said the International Cotton Advisory Committee.
In its latest report released last week, the ICAC said cotton consumption in Vietnam, one of the major competitors of Bangladesh in global apparel trade, will rise 20 percent to 1.1 million during the period.
The ICAC, based in Washington, provides statistics on world cotton production, consumption, trade and stocks, and identifies emerging changes in the world cotton market.
The rise in cotton consumption is not surprising as the demand is increasing due to higher garment exports from Bangladesh, said Jahangir Alamin, managing director of Fuad Spinning Mills Ltd.
Mahmud Hasan Khan Babu, vice-president of Bangladesh Garment Manufacturers and Exporters Association, echoed the same. In the first five months of fiscal 2015-16, $10.47 billion of garment products were shipped, up 16.13 percent year-on-year, according to data from the Export Promotion Bureau.
“We have a lot of spindle capacity,” said Alamin, also a former president of Bangladesh Textile Mills Association, a platform for spinners and weavers.
“All we need now is adequate supply of power and gas to run the factories at full steam.”
Currently, local importers have the capacity to consume about 2 million tonnes of cotton a year, but they are unable to go into full production due to inadequate supply of gas and power to industrial units.
The ICAC report also said world cotton consumption has been revised downward from initial projections to 24.4 million tonnes.
Despite optimism from the narrowing gap between polyester prices and cotton prices at the start of 2014-15 and falling domestic cotton prices, cotton consumption in China, the world’s largest cotton user, remained unchanged from 2013-14 at 7.5 million tonnes, according to the ICAC.
With the latest revision, cotton consumption in China is now forecast to be 7.3 million tonnes in 2015-16. India, the world’s second largest consumer of cotton, may see mill use rise 3 percent to reach 5.5 million tonnes in 2015-16.
However, Pakistan, which in previous years had benefitted from the growing demand for cotton yarn in China, is expected to see mill use decrease 10 percent to 2.2 million tonnes this season.
With consumption slowing, world cotton imports are forecast to decline 3 percent to 7.4 million tonnes in 2015-16, which would constitute the fourth consecutive season in which import volume declined after peaking at 9.8 million tonnes in 2011-12. China’s imports are expected to shrink 33 percent to 1.2 million tonnes.
Global cotton prices will average about 70 cents a pound in 2015-16 and trade in a range of 61 cents to 82 cents.
On cotton production, the ICAC said world cotton production is forecast to fall 12 percent to 23.1 million tonnes, which is 1.3 million tonnes lower than the projected demand in 2015-16.