Cotton Production Trends

M. Rafiq Chaudhry Head, Technical Information Section International Cotton Advisory Committee

Cotton production is expected to decline by 1.3 million tons to 22.2 million tons, as against a rise in consumption to 24.1 million tons, in 2009/10. Higher consumption is pushing prices up, and ICAC Secretariat forecasts a rise in prices to a season average of US$1.63 per kilogram of cotton during 2009/10. In 2010/11, production will rebound to 24.4 million tons due to increases in area as well as increases in yields. Consumption will also rise, thus supporting prices. Cotton was planted on 30.6 million hectares in 2009/10, and current higher prices will boost cotton area in the world to 32.3 million hectares in 2010/11. However, ICAC forecast for area beyond 2010/11 indicates lesser area allocated to cotton production. Average world cotton yields increased to 795 kg/ha in 2007/08, the highest ever in the history of cotton. Since then, cotton yields have declined to 763 kg/ha in 2008/09 and are estimated at 727 kg/ha in 2009/10. Though the world average yield is expected to increase to 755 kg/ha in 2010/11, the ICAC Secretariat anticipates a period of slow growth in yields for the next many years. A non-traditional new technological development would be required to excel the world average over 800 kg/ha and sustain production. The world average price is coming out of a ditch. The Cotlook A Index is expected to increase by 28 cents/kg from US$1.35 in 2008/09 to US$1.63/kg in 2009/10. As of March 2010, the ICAC has not yet announced its price forecast for 2010/11, but all price parameters suggest that the Cotlook A Index will be higher in 2010/11. Asia continues to grab a higher share of world production, mill use and imports. It is estimated that 73% of production, 82% of imports and 83% of mill use in 2009/10 will happen in Asia. According to Cropnosis, a private company in the UK, plant protection chemicals worth US$44 billion were used in agriculture in 2008. Almost half of the chemicals were used in the form of herbicides to control weeds. Plant protection chemicals worth three billion US dollars were used on cotton in 2008, which is almost 7% of all plant protection chemicals. In terms of value, 5% of all herbicides and 16% of all the insecticides used in the world in 2008 were applied to grow cotton on 30.7 million hectares. Plant protection chemical use on cotton is declining and in the last 20 years, cottons share of pesticide consumption has declined from 11% in 1988 to 6.8% in 2008. Similarly, the share of insecticides has also declined from 19% in 2000 to 15.7% in 2008. Reasons for lower pesticide consumption on cotton are 1. Countries suffered because of resistance and secondary pests. 2. Long-term consequences are better understood now compared to the time of introduction of insecticides.

3. Chemicals are expensive and inflated the cost of production to un-economical levels. 4. Insecticides are dangerous to handle and apply. 5. It is acknowledged by researchers that insecticides are not a long-term solution for pest control. 6. Confidence in non-chemical controls has increased. 7. Insect resistant biotech cotton has lowered insecticide applications against target insects. There is no alternative to herbicide use other than cultural operations (manual or mechanical) for effective weed control. ICAC foresees a continuous decline in insecticide use on cotton. Insect resistant biotech cotton may play a dominant role but farmers are determined to use insecticides only as a last resort. Ten countries that have commercialized biotech cotton planted 52% of the world cotton area in 2009/10 to biotech varieties. Most of these countries have reached their peak while maintaining refuge crops; more countries are adopting biotech cotton. The next countries to commercialize biotech cotton may be Kenya, Pakistan and Uganda. The ICAC estimates that 54% of world production in 2008/09 came from biotech varieties, and that more than half of the cotton traded internationally in the same crop year was biotech cotton. Three-gene insect resistant biotech cotton and stacked-gene herbicide resistant biotech cotton varieties are expected to be released soon. A lot of work is going on to improve cotton productivity and quality utilizing biotechnology. Some of the interesting areas of research in biotech cotton are fertilizer efficiency, higher yield, ultra low gossypol in seed only, better quality in terms of longer, stronger and more uniform quality parameters and development of varieties that can be grown successfully under various climatic conditions. Major changes expected to happen in cotton production related issues are in the field of insect control, breeding for new varieties, fiber quality testing and the role of biotechnology. Insect control will incline in favor of control through seed rather than over the top application of chemicals. Conventional breeding will be replaced by a combination of lab gene insertion and field-testing which will significantly reduce the duration to develop a new variety. Fiber quality testing will become more uniform across countries and testing will become more and more mechanized on uniform instruments. Biotech will dominate in all disciplines of production research for a long time. Organic cotton production has rebounded and provided hope for significant increases in organic production. However, the organic cotton industry is facing some critical issues that will determine future developments. Organic cotton production has to be transformed from a marketing tool to a producer driven initiative. Organic production begins with commitment from the producer and he/she must have an economic interest to produce organic cotton. Organic cotton means certified organic cotton, and that is why truthful labeling has emerged as one of the major issues the industry is facing. It is time for the organic industry to consider trait-specific certification of biotech cotton. Organic production and processing systems must be more transparent. Organic cotton should be promoted as one of the means of achieving environmentally, economically and socially sustainable cotton production and processing systems.

WORLD PRODUCTION AND MILL USE

Million tons 24.1 22.2 24.8 24.4 Million Ha

WORLD COTTON AREA

30.6

32.3

WORLD COTTON YIELDS

Kg per Hectare

SEASON AVERAGE COTLOOK A INDEX

Season-average (US cents/lb)

727

73 74

61

SHARE OF ASIA IN THE WORLD TOTAL

COTTONS SHARE IN WORLD TEXTILE FIBER USE

83 82 Mill Use Imports Production 73

PLANT PROTECTION CHEMICAL USE WORLD - 2008

All chemicals Herbicides Insecticides Fungicides Others = US$44 billion = 47% = 24% = 24% = 5%

PLANT PROTECTION CHEMICAL USE COTTON - 2008

Total = US$ 3 billion = 6.8% Herbicides Insecticides 5% 16%

PLANT PROTECTION CHEMICAL USE COTTON - 2008

Total Herbicides Insecticides = US$ 3 billion = 6.8% 5% 16%

SHARE OF PESTICIDES - COTTON

Percent Reduction = 38%
11

6.8

SHARE OF INSECTICIDES - COTTON

Percent Reduction = 17%
18.9

LOWER CHEMICAL USE - FACTORS

1. Countries suffered 2. Consequences are better understood 3. Chemicals are expensive - cost of production

15.7

LOWER CHEMICAL USE - FACTORS

1. Countries suffered 2. Consequences are better understood 3. Chemicals are expensive - cost of production 4. Insecticides are dangerous 5. Not a long-term solution 6. Confidence in non-chemical controls increased

CHEMICAL USE IN COTTON - FUTURE

1. Weed control - No alternatives to herbicide use 2. Insect control - Many options Cultural Biological Biotech Special techniques

CHEMICAL USE IN COTTON - TARGET

FIBER QUALITY - ISSUES

1. Contamination (Plastic, polypropylene, etc)

No insecticides

2. Instrument testing (High volume instrument)

FIBER QUALITY - Rapid Testing Instruments

Uster Europe Asia Africa N. America S. America = 2,200 = 10% = 54% = 12% = 16% = 8%

BIOTECH COTTON AREA - WORLD

Percent

52%

Premier = 400 (China, India, Pakistan, Brazil)

BIOTECH COTTON - 2008/09

Area Production Trade = 48% = 54% = 52%

BIOTECH COTTON - FUTURE

1. Fertilizer efficient 2. Higher yield 3. Gossypol free 4. Better quality 5. More insect control 6. Global cotton

MAJOR CHANGES - FUTURE

1. Insect control 2. Breeding for new varieties 3. Instrument testing 4. Biotechnology will dominate

ORGANIC COTTON
1. Producer driven initiative 2. Truthful labeling 3. More transparent 4. World cotton supply and use

ORGANIC COTTON - SUGGESTIONS

1. Biotech cotton for certification - trait specific approval 2. Organic and conventional cotton can co-exist 3. Involvement of governments