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Brands urged to support Chinese cotton industry

As cotton prices hit a new low in China, international fashion brands have been called upon to invest in supporting a sustainable cotton supply chain in the country to ensure its future security.

Chinese government subsidy reforms in January 2014 triggered the latest downward shift in prices of cotton, which fell by around 60% to CNY13,605 (£1,417) per tonne during the last nine months of 2014, according to the latest China Cotton Association’s price index.

In a new report, social enterprise organisation Cotton Connect has said that international brands and retailers have a chance to show leadership in helping to build a successful supply chain in China.

With Chinese cotton prices falling in line with international prices, it said the market is now opening up to brands, while cheaper, better quality cotton sourced and processed in China could create greater efficiencies for global brands sourcing from and selling to the Chinese market.

China is now the world’s largest producer, importer and consumer of cotton, holding around 58% of the world’s total stockpile.

However, at a farm level, cotton is becoming a less appealing crop for farmers, with plantings forecast to fall by 6% to 31.6 million hectares in 2015-2016 if intervention does not happen.

Cotton Connect said that more support is needed for smallholder cotton farmers across the country as they continue to grapple with environmental, economic and social challenges. On top of falling prices, growers are also struggling with changing rural demographics, an emerging water crisis, rising labour costs and a lack of access to credit and financial literacy.

“There is a growing need – and a huge opportunity – for international and leading Chinese brands to support the cotton sector in this time of transition by showing leadership, collaborating with others and investing to help build a more sustainable cotton industry for the future,” said Cotton Connect chief executive Alison Ward.

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