Brazil, which is the largest country in South America and the world’s fifth largest country in geographical area and population is the sixth largest textile producer in the world. The textile industry is analyzed as $51 billion in 2010. In addition the textile industry employs 1.65 million employees and also represents 17.5% of the country’s overall GDP.
Brazil’s textile industry suffered from first increase in the cotton prices, second decline in the world supply, third 20-30% decrease in domestic cotton production due to drought then got hit by the contract defaults. Brazil’s import is expected to reach to 1.38 million bales this year with an increase of 150,000 bales when compared to last year. The 10% tariff put on cotton imports is already damaged the imports. The United States which is the biggest cotton exporter in the world already set the amount of cotton export as 900,000 bales to Brazil.
Cotton Prices Hit the Record High
China which is the biggest producer and consumer of cotton in the world got hit by the decrease in the cotton production this year. In 2009 the cotton output in China was 6.95 million tons, this year it is expected as 6.4 million ton with a deficit of 550,000 tons. According to a recent report the world’s overall cotton production will be 96,000 tons less than the previous forecasts which was 25.06 million tons.
The flood in Pakistan destroyed the 1.1 million acres of land that cotton grows, and then the weather in China affected the crop harvest. After all of these demand increased and supply decreased throughout the world, the cotton prices hit the record of $1.20 a pound in New York. The price of cotton is also expected to gain more value if the domestic and international supplies continue to decrease.