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 India, Kyrgyzstan, 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: