The global cotton market is expected to reach $5.59 billion by 2025, growing at an compounded annual growth rate (CAGR) of 3 per cent between 2021 and 2025, according to a report from Technavio. The growth is attributed to government initiatives and support. However, overconsumption of water due to poor management and water pollution may hinder the growth.
On the other hand, the strategic crop due to its versatility will present new opportunities in the coming years, Technavio said in a press release.
Governments across the globe are taking various initiatives to support cotton farming. For instance, the Indian government has come up with several export promotion policies. India’s Defence Research and Development Organisation is helping to produce yarns and eliminate the dependence on the import of Chinese products and other foreign clothing for military uniforms.
Furthermore, with two-thirds of developing countries dependent on the export of commodities, a core part of the work of the UN Conference and Trade and Development involves building countries’ capacity to move up the value chain and diversify their exports. These factors will drive the cotton market over the forecast period.
“The growing use of cotton as prime material coupled with the support in economic growth and cotton as a source of livelihood will further boost market growth during the forecast period”, says a senior analyst at Technavio.
The Asia-Pacific region (APAC) dominated the market in 2020 and is expected to maintain its lead over the forecast period. Eighty five per cent of the market’s growth will originate from APAC during the forecast period.
China and India are the key markets for cotton in APAC. Market growth in this region will be slower than the growth of the market in North America.