Cotton - International Trade

International Trade

The largest producers of cotton, currently (2009), are China and India, with annual production of about 34 million bales and 27 million bales, respectively; most of this production is consumed by their respective textile industries. The largest exporters of raw cotton are the United States, with sales of $4.9 billion, and Africa, with sales of $2.1 billion. The total international trade is estimated to be $12 billion. Africa's share of the cotton trade has doubled since 1980. Neither area has a significant domestic textile industry, textile manufacturing having moved to developing nations in Eastern and South Asia such as India and China. In Africa, cotton is grown by numerous small holders. Dunavant Enterprises, based in Memphis, Tennessee, is the leading cotton broker in Africa, with hundreds of purchasing agents. It operates cotton gins in Uganda, Mozambique, and Zambia. In Zambia, it often offers loans for seed and expenses to the 180,000 small farmers who grow cotton for it, as well as advice on farming methods. Cargill also purchases cotton in Africa for export.

The 25,000 cotton growers in the United States of America are heavily subsidized at the rate of $2 billion per year. The future of these subsidies is uncertain and has led to anticipatory expansion of cotton brokers' operations in Africa. Dunavant expanded in Africa by buying out local operations. This is only possible in former British colonies and Mozambique; former French colonies continue to maintain tight monopolies, inherited from their former colonialist masters, on cotton purchases at low fixed prices.