Alejandro Plastina, ICAC. Presented at the Third Breakout Session of the 68th ICAC Plenary Meeting: Enhancing Demand for Cotton Products, September 9, 2009.

World textile fiber consumption more than quadrupled between the early 1960s and the late 2000s. However, while cotton consumption more than doubled during that period, consumption of other fibers (wool, chemical and non-chemical synthetic fibers) increased sevenfold. Consequently, the market share of cotton decreased from an average of 62.4% in the 1960s to 39.5% in the 2000s.

Most of the long-term decline in the market share of cotton occurred in developing countries, where end-use cotton consumption almost doubled over the last 3 decades, but end-use consumption of other fibers increased twice as fast. As a result, the market share of cotton in developing countries declined from about 60% in the early 1980s to about 35% in the late 2000s.

End-use cotton consumption increased faster than consumption of other fibers in industrial countries over the last 3 decades, resulting in a slight increase in the regional market share of cotton, from about 38% in the early 1980s to 43% in the late 2000s.

Several factors influence the evolution of textile consumption, including promotional efforts, fashion trends, textile production technology, logistic factors, trade agreements and trade barriers, population count, disposable income, prices and availability of textile fibers.

The ICAC Textile Model explains and forecasts the evolution of textile consumption based on past levels of textile consumption, GDP growth, population, prices of cotton and other fibers, and inflation. Simply put, textile consumption per capita tends to increase when income per capita increases, and when the relative price of textiles to other goods declines.

However, the demand for cotton and other textile fibers tend to react differently to changes in the model variables. The demand for cotton and non-cotton textile fibers are more sensitive to changes in income than to changes in relative prices, i.e. a 1% increase in GDP per capita generates, on average, a higher increase in demand for each fiber than a 1% decrease in the corresponding relative price. Furthermore,

changes in income per capita have a greater effect on the demand for non-cotton textiles than on the demand for cotton textiles. Changes in cotton prices have a greater effect on the demand for cotton textiles than on the demand for non-cotton textiles. Changes in non-cotton textile fiber prices have a greater effect on the demand for non-cotton textiles than on cotton textiles.

The ICAC Textile Model forecasts a further decline in the share of cotton in world fiber consumption from 37.7% in 2008 to 36.2% in 2009, to 34.5% in 2010. Longer-term projections suggest that cotton consumption will resume its long-term growth in 2010, and reach 28 million tons by 2020. However, since consumption of other fibers is projected to grow faster than cotton consumption, the market share of cotton is expected to decline to 30.5% by 2020.

Promotional efforts are critical to the expansion of cotton markets worldwide, and prompt and decisive action should be undertaken to stop the loss of market share in developing countries. In the absence of promotional efforts, the ICAC Secretariat estimates that end-use cotton consumption in the United States would be 10% lower than it is now. If promotional efforts were undertaken in China (Mainland), India, Brazil, Pakistan and Turkey with similar effectiveness, world end-use cotton consumption could increase by 600 thousand tons (+2%), or about 800 million dollars, annually.