China to put a strain on global cotton supply

World demand for imported cotton will jump by as much as 50% in the next decade as China's emerging middle class snaps up ever more of the fluffy fiber, Texas Tech University economists predict. Yet India is poised to profit most from this windfall instead of U.S. farmers.

Economists say China is poised for a consumer products revolution, which will put a strain on global supply. The country produces, imports and mills more cotton than any other place on the globe, yet residents use relatively few cotton products - about 4.4 pounds annually - compared to the 35 pounds demanded in highly developed countries like the U.S, that leaves plenty of room for growth inside China's untapped consumer frontier.

The fact is that China already uses most of its arable land and produces a 1.7 bales-per-acre yield comparable to the U.S., and China will have to look elsewhere for its textiles. Today, China imports 14.4 million bales and in ten years that number is expected to rise to 28.7 million bales. Unfortunately, it's not likely that the United States will fill this production dearth.

Competition from other crops, specifically those related to rising bio-fuel production, will push the US cotton acreage downward at least for a few years while at the same time India can enjoy massive boosts to its yields as it turns to genetically enhanced crops.