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The global fashion business journal

Jul 18, 202410:14am

2019, a roller-coaster year for cotton and oil

Economic slowdown and trade war affected the consumption of cotton during the 2018-2019 season, when dropped by 1%. Raw material prices also stumbled during the season, which started the year at 99.5 cents per pound and ended 2019 at 84 cents.

Dec 27, 2019 — 8:54am
C. J.

2019, the year in which cotton and oil went for a roller coaster ride



Fashion pillars stumbled in 2019. The year began with a new winner in the race: China snatched the leadership of world cotton production from India in the 2018-2019 campaign. The International Cotton Advisory Committee (Icac) indicated that the Asian giant would increase its production of this raw material by 1% during the campaign, while India would reduce it by 7% due to lack of rain.


At the end of the season, global cultivation area decreased by 1%, to 32.6 million hectares, in which the yield also fell, to stand at 790 kilograms per hectare, 2% less. This meant that world cotton production will reduce by 3%, to 25.7 million tons.


Economic slowdown, trade war and the decrease in general consumption also affected the consumption of cotton during the 2018-2019 season, which dropped by 1%, to 26.2 million tons. In addition, the organization warned that this trend will continue over the next few seasons due to uncertainty, coupled with the usual risks that agriculture faces.





“After several years of relatively quiet market conditions, world agricultural markets face increasing risks today,” the association stated in its annual report. The spotlight focused on the two main cotton producers: China, the main consumer and second largest producer of this raw material, and the United States, its main exporter. 


Cotton prices also swift during the last campaign. The sector started the year with an increase in prices, reaching 99.5 cents per pound, but throughout the season the prices of raw materials suffered ups and downs, until the campaign ended at 84 cents per pound. Sustainability, meanwhile, continued to gain ground in cotton production. According to the latest report of the Better Cotton Initiative (BCI) platform, organic cotton will account for a third of world production in 2020.





In addition, sustainable production has also been part of other raw materials, such as mohair wool, which in the last year has laid the foundations for the certification of the production of this material in farms with high levels of animal welfare. As a whole, preferred fibers, those that encompass more responsible and ecological methods in their production, have also gained ground in the last year, accounting for approximately 6.2% of the total volume of fiber production, including materials such as viscose, acetate, lyocell, modal and cupro.


Oil, on the other hand, has also frightened fashion in the last year, with fluctuations in its prices and strong increases. In the short term, a rise in the price of oil makes logistics more expensive and, in the long term, impacts one of the star fashion raw materials: polyester. Oil started 2019 at 58.7 dollars per barrel of Brent. During the year, oil prices registered an evolution, registering peaks of 70.7 dollars in April, and declines of up to 59.8 dollars in October. In total, between January and November, the price of a barrel of oil from the Organization of Petroleum Exporting Countries (Opep) increased by 14.1%, until again touching seventy dollars in December.

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