Cotton Industry Needs More Demand for a Better Year in 2024
April 6, 2024 The cotton industry is looking for a better year and a pickup in demand. That was the takeaway message from the 67th annual meeting of Plains Cotton Growers (PCG) in Lubbock on Apr. 2.
PCG President Martin Stoerner opened the meeting, stating that the last two years have been tough for cotton producers but that the industry is resilient and hopes for a better 2024.
The recent USDA Prospective Planting report shows that U.S. producers are expected to plant 10.7 million acres of cotton, which is up from 10.26 million acres planted last year. However, industry leaders expect the final planted acreage this year to be in the range of 11 to 11.5 million acres.
“Demand is weak but improving,” stated Jody Campiche, Vice President of Economics and Policy Analysis, National Cotton Council. “The global economy and competition from other fibers play an important part in impacting the demand for cotton. There needs to be a significant improvement in GDP to see a major change in demand.”
In addition to the economy, just-in-time inventory practiced by global mills also impact excessive buying and stockpiling, noted a cotton merchant.
The industry is optimistic and is hoping for improved demand by the end of 2024. With the moisture situation better than what it was last year in the High Plains of Texas, it is hoped that production will improve with less abandonment, increasing the chances for improved supply. This will necessitate demand enhancement to yield better prices for the farmers to help offset the 30% increase in the cost of production in recent years.
With slow demand and the carryover stock from the 2023 crop, the current price levels may be due to speculator activity, which is the sentiment shared by several cotton economists at the meeting. Looking long term, the slow birth rates in developed economies and stagnant population in China – albeit the relaxation in the country’s childbirth policy – will likely impact demand for consumer goods like textiles.
The cotton industry continues to face competition from synthetics, which are cheaper than cotton. In addition, there is growing competition for markets among leading exporting nations.
What should the industry plan and do? The work by Cotton Incorporated to tell positive stories about sustainability and traceability, plus continuing to engage with brands and consumers, remains important. Additionally, better advocacy for supportive policies in a collective fashion is much needed.
“Advocacy is a team sport,” stated Kody Bessent, CEO of Plains Cotton Growers.
The industry needs to engage in better outreach efforts, find new and industrial applications for cotton, and invest in research to come out with new chemistries and environmentally friendly post-harvest processing technologies.
Efforts to boost the demand and promote sustainability values of cotton will be the collective task of the entire global cotton industry.
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