Cotton Production in India Surpasses China’s Output

Image via Flickr by Gloria Cabada-Leman

During the past decade, cotton production in India has experienced exponential growth. According to Commodity Online, output has increased from 15.8 million bales of cotton in 2002 to 40.2 million bales of cotton in 2014. Now, 37 percent of the world’s cotton acreage is in India. That means India has surpassed the cotton production in China and is only trailing the U.S. It’s estimated that after the U.S., India is now the largest exporter of Cotton. China is the biggest importer.

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The President of the Cotton Association of India, Dhiren Sheth, said that India’s growth in the cotton industry happened thanks to government support, new policies for farmers, and the large scale cultivation of GM cotton. Farmers have been encouraged to try new agricultural techniques, too to improve production costs. There was also a massive monsoon in 2012 that helped improve conditions from the drought in previous years.

India’s increased output of cotton means that there is a surplus in the market with global stockpiles higher than ever. The increase in inventory is affecting futures traded in New York, which have plunged by more than 50 percent. However, Bloomberg reports that India’s cotton production levels will cause competition among shippers. This is good news for the supply chain industry, but bad news for people who invest in cotton.

The drop in the price of cotton could mean that retailers will not experience an increase in the cost of cotton goods. Clothing has always seen a steady increase in price from year to year, but that may no longer be the case. As cotton remains an affordable commodity, there could be an increase in the number of companies that use it in their clothing designs. Cotton is still the most commonly used raw material in the clothing industry.[/show_to]

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