Home Business Cotton import from USA to soar American traders predict

Cotton import from USA to soar American traders predict

Bangladesh’s cotton consumption will continue to grow in the near future because of higher shipment of garment items stemming from the US-China trade war and for higher demand for natural fibre by Western consumers, said a top official of Cotton USA, an association of American cotton growers and traders. “We see continuous growth of cotton consumption in Bangladesh,” Bruce A Atherley, executive director of Cotton Council International (CCI), a platform of Cotton USA, told The Daily Star in an interview yesterday. Bangladesh is perfectly positioned to take advantage of the China and US tariff war, he said. The retailers and brands are coming back to Bangladesh with a lot of work orders as China became very expensive because of the trade war. Countries like Vietnam and Cambodia are also benefitting from the US-China trade war. Another important reason is that the Bangladeshi spinning sector is very much unique in the sense that the majority of the yarn and fabrics are made from cotton. “This is a very big advantage for Bangladesh as consumers, especially in the Western world, are coming back to natural fibre from man-made artificial fibre with the view to protecting the environment and for comfort.” The cotton fibres are biodegradable but the polyesters and other man-made fibres do not mix up with the soil and damage the water and soil quality. “So, Bangladesh is in a good position for higher consumption of cotton,” he said. Over time, America’s export of cotton to Bangladesh will grow because of good quality, competitive prices and timely delivery. For instance, between 2015 and 2017 Bangladesh imported 226,000 bales of cotton each year, but the quantity tripled last year to 785,000 bales (one bale equals to 282 kilogram). Last year, Bangladesh imported 8.28 million bales of cotton worth $3 billion. Currently, Bangladesh imports 11 percent of its annual total requirement of cotton from the US, which was nearly 4 percent even three years ago. “We want to see Bangladesh in third spot in the ranking of cotton-importing countries from the US by 2024,” he said, adding that the US wants to export two millions bales of cotton. Currently, Vietnam is the number one cotton importer from the US, followed by China. “We are very much optimistic regarding the growth of cotton consumption by Bangladesh,” he said. The trade war also forced the US to shift marketing focus to Bangladesh from China, he said. For example, before July 2018, China used to import 45 percent of its total annual requirement of cotton from the US. But now, it is only 15 percent. In the global cotton market, the US’s share is 40 percent. Predominantly Brazil, Australia and India — and to some extent some West African countries — have increased their cotton export to China after the trade war. The trade war has also helped lower the prices of cotton. Cotton was trading at more than 90 cents even in July last year, but the price of the fibre has now come down to 60–65 cents on the New York Futures market. The higher production in some countries like the US is also responsible for the lower prices of cotton worldwide at present. Usually, more than 18,000 farmers in the US produce over 21 million bales of cotton in a year, but next year the quantity may rise to 30 million bales due to favourable weather condition. Globally, the production of cotton will remain more or less 120 million bales in the next year, he said. Cotton USA has ramped up its marketing efforts in Bangladesh for grabbing more market share. It opened its office in Dhaka and hired some technical persons for educating about cotton use and trade. However, he mentioned three specific challenges to cotton trade in Bangladesh: double fumigation of US cotton in Bangladesh, logistic problems like longer shipment time from the US and marketing for higher cotton trade in Bangladesh. William R. Bettendorf, director supply chain marketing for South and Southeast Asia of CCI, and William D. Kimbrell, vice-president of Cotton Incorporated, also spoke during the interview.

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