By Haley Herzog
TFB Communications Intern
After years of stockpiling cotton, China is re-emerging as a major consumer of the U.S. fiber.
The world’s most populous country has purchased futures contracts for more than 361,000 bales of U.S. cotton for 2019-20, the Wall Street Journal reports.
Cotton futures in China have surged amid weather concerns and dwindling stockpiled supplies.
The country’s return to the cotton market stems from a recent production deficit and a decrease in the commodity that the country hadn’t planned for.
The move to increase imports of U.S. cotton could mean big things for Texas farmers.
“China is going to be importing more cotton due to the production deficit going on right now in the country, because there’s a lot less cotton planted than they had originally thought and the weather hasn’t cooperated,” Brant Wilbourn, Texas Farm Bureau associate director of Commodity and Regulatory Activities, said. “That’s going to mean more opportunities for Texas cotton farmers, and that increase in demand can also help with the price Texas cotton farmers receive.”
The increase in exports and price of cotton could be a big pay day for cotton farmers, especially in Texas. But the struggle to get crops in the ground amidst a growing drought will be the biggest determining factor.
“The drought is definitely going to have an effect on the price, as well as the cotton that’s produced, especially in West Texas due to the lack of rain for the area,” Wilbourn said. “That, coupled with the increase in demand, is also going to help the price for other cotton growers in other areas of the state.”
Despite the current weather conditions, cotton is the U.S. agricultural product set to benefit the most from the increased Chinese imports, specifically for Texas.
“Texas is the largest cotton growing state in the country, and a lot of the cotton markets are going to depend on the weather in the next couple of months. Whether or not there’s rain in West Texas will definitely impact the price and the supply of cotton,” Wilbourn said.