Why is there a shortage of organic cotton in 2021?

The availability and price of any commodity is driven by supply and demand so, to answer this question, we need to examine recent market trends.   


In 2020, the demand for organic cotton from brands and retailers increased significantly, with companies of all sizes making it a major component of their fiber and material portfolios. More and more companies are setting targets and commitments to increase their use of organic cotton, encouraged by growing evidence of its environmental benefits and by the millennial generation’s interest in sustainability and buying power in the marketplace. Some of these companies were already sourcing organic cotton and have decided to increase their procurement, while others are completely new to sourcing the fiber.   

A positive result of this heightened demand for organic cotton is companies increasing interest in sourcing “in-conversion” cotton to support farmers through the transition phase and help to expand the organic cotton market. However, such programs require investment and commitment – and up to 36 months for farmers to make the conversion. It will take even more time for this production to reach the market.  

Another demand-side trend we are noticing is that brands and retailers are increasingly keen to source from specific geographies such as India, Turkey, and the United States, increasing competition in these regions, though other geographies such as Africa and Latin America are not yet seeing the same level of interest.  


The primary supply-side factor contributing to the shortage of organic cotton currently being experienced are the reports of forced labor in Xinjiang, China, that caused some countries to ban imports of cotton from this region (read Textile Exchange’s official statement on the reports of forced labor here). China has been the second largest producer of organic cotton for years, growing 17 percent of the fiber in 2018/19 harvest year. As a result, companies that were sourcing from China are turning to other sourcing destinations, particularly IndiaKyrgyzstan, Tajikistan, Turkey, and the U.S.  

Another reason for the supply shortage is due to the detection of fraud in India in 2020. For further details, Textile Exchange’s statement. 


If you wish to secure a reliable supply of organic cotton, here are our suggestions:  

  1. Source directly from farmers/farm groups to secure supply and signal your demand. Visit our Organic Cotton Producer Directory to connect directly with producers. 
  2. Make a forward commitment to farmers/farm groups, or with supplier who work closely with them. Clear demand signals and fair prices will encourage farmers to plant more organic cotton. Be sure to order well in advance of planting time 
  3. Consider other sourcing geographies and models to diversify your supply base. India is the most popular sourcing location but consider other regions as well. See the Organic Cotton Market Report and Textile Exchange and Kering’s A World Beyond Certification: A best practices guide for organic cotton trading models for information on sourcing regions, pricing, fiber qualities, and more. 
  4. Buy in-conversion cotton to support farmers/farm groups through the conversion phase, secure your supply, and help to build future supply of organic cotton. Textile Exchange has posted background information about in-conversion cotton and announced the Organic Content Standard’s January 2021 policy around in-conversion materials, and together with Kering will soon release a report on in-conversion cotton. 
  5. Help Textile Exchange enable the industry to plan for expansion the most efficiently by participating in our surveys requesting forecasted demand for fiber quantities, qualities, and sourcing regions. Insights are anonymized and reported back to the industry alongside recommendations.  
  6. Ensure that the farmers are certified to a standard to provide verification from field to finished product to industry and consumers alike. 
  7. Keep up to date on global production trends and forecasts via Textile Exchange’s annual Organic Cotton Market Report. 
  8. Join our Organic Cotton Round Table to hear and discuss sourcing and other issues with the rest of the industry. Join here.