The Asia-Pacific cotton market is expected to register a CAGR of 3.5% in the forecast period (2020-2025). China and India are the highest cotton-producing countries in the region and account for more than 70% of the region's produce. The growth of the Chinese and Indian textile industry has become a dominant factor in influencing the world cotton and textile markets. Pakistan is also a significant producer of cotton in the world, and importantly also holds the third largest spinning capacity in Asia. Major cross border importers of cotton from the Asia-Pacific region are Middle Eastern and European countries.
Key Market Trends
Australia Dominates Exports
Australia is the leading exporter of cotton in the Asia-Pacific region. Cotton is the world's most widely used natural fiber and the undisputed monarch of the global textile industry to date. Cotton is primarily grown in New South Wales and Queensland. Australia’s cotton industry is one of the most water-efficient cotton industries in the world. Australia produced 889.5 thousand metric ton of cottonseed in 2016, which increased to 1414.0 thousand metric ton in 2018 (FAO). Most of the cotton produces is for exports, mainly to countries such as China, Vietnam, Indonesia, and Bangladesh. The textile industry in Australia is relatively small as compared to that in other nations, this gives way for an increase in exports. According to ITC Trade Map, in 2018, Australia exported 550.6 thousand metric ton of cotton (neither carded nor combed). Thus, the increasing demand of the textile industry in the region will drive the cotton production in Australia during the forecast period.
China Dominates Asia Pacific Production
China leads the global production and export market. It is the prime cash crop of China. Asia-Pacific dominates the global production but most of the cotton produced is domestically consumed, in contrast to Western countries where cotton is grown mainly for export. Both Bt cotton and non-Bt cotton varieties are used in China. Bt cotton is a major genetically modified crop, which is adopted in the country for commercial production. According to our analysis, China holds the largest market share of 29% of world cotton production. China produced a lump-some amount of 10.1 million metric ton of cottonseed in 2018, closely followed by India, which produced 9.5 million metric ton of cottonseed in the same year (FAO). China and India dominate the textile sector globally, thereby consuming most of the cotton produced domestically. China is majorly an importing country but exports cotton to a few countries such as Vietnam, Indonesia, and Bangladesh. The trend of high production in China is likely to grow steadily during the forecast period, given high demand in the local textile industry. Major exporters of cotton to China are Brazil, Australia, and the United States.
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