Bangladesh and Vietnam are expected to experience the fastest growth in cotton consumption and trade over the next decade due to their competitive labor and production costs, leading to significant expansions in their milling capacities, according to a latest global report.
The report, titled ‘OECD‑FAO Agricultural Outlook 2024‑2033,’ says that over the next decade, global consumption of raw cotton is projected to increase by 1.7 percent annually, driven by population growth and rising incomes in middle- and low-income countries.
Demand in the textiles and apparel sectors, as well as competition from substitutes, will remain key factors influencing raw cotton consumption, according to the outlook, a collaborative effort by the Organisation for Economic Co-operation and Development and the Food and Agriculture Organisation of the United Nations.
The report projects that global cotton trade will expand by 2.1 percent annually, reaching 12.4 million tonnes by 2033. This growth is largely driven by increased mill use in Bangladesh and Vietnam, which heavily rely on imports to support their expanding textile sectors.
It also states that imports of raw cotton by Bangladesh and Vietnam will grow by over 3 percent annually, significantly contributing to global trade dynamics.
The OECD-FAO Agricultural Outlook reports that Bangladesh’s mill consumption of cotton is expected to increase to 2.42 million tonnes, up from 1.71 million tonnes in 2023.
The report shows that Bangladesh’s import share of cotton will be 18 percent in 2033, while China will hold the highest global share at 23 percent.
The United States is projected to remain the largest exporter, with its share of world trade reaching 31 percent by 2033.
Global cotton production is projected to steadily increase to 29 million tonnes by 2033, marking a 17-percent rise from 21.14 million tonnes in the base year of 2004.
The growth will primarily stem from key producers: India is expected to contribute approximately 38 percent to the global increase, followed by the United States (27 percent) and Brazil (21 percent).
The report also highlights that the reliance on imports, coupled with the projected growth in consumption, underscores Bangladesh’s crucial role in the global cotton market.
According to the outlook, the phase-out of the Multi-Fibre Arrangement in 2005 initially favored Chinese textile producers, but Bangladesh and Vietnam saw robust growth in their textile industries driven by abundant labor, low production costs, and government support measures.
The report notes that Vietnam’s accession to the World Trade Organisation in 2007 and significant foreign direct investments, particularly from Chinese entrepreneurs, further boosted its textile sector.
Additionally, free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the EU-Vietnam Free Trade Agreement facilitated greater market access for Vietnamese textile exports.
Similarly, foreign investments and FTAs contributed to Bangladesh’s emergence as a major global player in textiles.
Furthermore, the US-China trade dispute increased mill use in Bangladesh and Vietnam, driving their textile industry expansions.
In Bangladesh, investments in spinning capacity driven by increasing domestic demand for yarn and fabric are expected to raise cotton fiber consumption by 3.3 percent annually, solidifying its position in the global textile market and significantly contributing to its economic development, the outlook observed.
Despite this shift, China is expected to retain its position as the largest cotton processing country in 2033, followed by India, with annual consumption growth projected at 0.9 percent and 1.5 percent respectively over the next decade.
According to the outlook, global cotton production is expected to grow due to improved yields and higher compliance with sustainable standards.
The leading producing countries—India, China, the United States, Brazil, and Pakistan—are expected to account for about 77 percent of global output by 2033.
The report identifies that over the past decades, global demand for textile fibers has sharply increased, driven mainly by population and income growth, particularly in low- and middle-income countries.
This expanding demand has been largely supplied by chemical fibers.
Synthetic fibers offer diverse advantages over cotton, such as durability, wrinkle resistance, moisture-wicking properties, and competitive pricing, leading the textile manufacturing industry to increasingly favor them over cotton fibers, the report said.
As a result, global consumption of natural fibers, including cotton, peaked at 26.5 million tonnes in 2007 but declined to approximately 24.4 million tonnes from 2021 to 2023.
Since the early 1990s, non-cotton fibers have steadily gained market share, reaching 78.2 percent in 2023, while cotton’s share declined to 21.8 percent, the report showed.
It also noted that per capita consumption of non-cotton fibers continued to rise significantly, contrasting with stagnant or declining trends in per capita cotton consumption in recent years.
According to the Bangladesh Textile Mill Association, the country’s cotton imports in the financial year 2023-24 stood at 7.5 million bales.