Table of Contents

1. Overview

Cotton remains one of the most versatile crops grown by humanity, noted for its appearance, comfort and the many useful products it provides.

  • From the seed: flour and feed, refined oil (salad and cooking), margarine, soap and cosmetics, writing materials, rayon industrial fabrics, yarns, plastics, lamp and candle wicks, twine, rugs, mops, furniture upholstery etc.
  • From the lint: clothes, underwear, linings for canvas, tents, medical bandages, sheets, towels, curtains etc.

 

2. International business environment

Find international updates at www.cottonsa.org.za and on the cotton pages of the International Trade Center website, www.intracen.org/itc/sectors/cotton. A further useful resource is the United States Department of Agriculture (USDA)’s Cotton: World Markets and Trade circular.
  • Developing countries on average produce approximately four-fifths of the world’s cotton. They is an increased movement towards processing the crop as well [International Center for Trade and Sustainable Development (ICTSD), 2013].
  • China accounts for the largest share of total global cotton production. India is the second largest producer of cotton.
  • Cotton export destinations have shifted from European countries to Asian countries, making the majority of cotton importers the developing nations
  • China is the world’s leading importer of cotton, followed by Turkey, Bangladesh and India.
  • The United States is the world’s leading exporter of cotton (thanks in part to that country's heavy subsidies to its cotton farmers), followed by India, Cote d’Ivoire and Australia.
  • African countries are price takers and are affected by the fluctuation of the exchange rate.
  • The main suppliers of cotton to South Africa are African countries - Zambia, Zimbabwe, Malawi and Mozambique.
  • South Africa exports to Asian countries (Singapore, Indonesia and China), Europe (the UK, Germany and Switzerland) and Africa (Swaziland and Lesotho).
Sources: USDA Cotton: World Markets and Trade May 2017; DAFF-NAMC International TradeProbe Issue 53, September 2015

 

3. Local business environment

Visit www.cottonsa.org.za for the latest cotton market reports.

Historical cotton production areas include Limpopo Province (Springbok flats from Bela-Bela to Mokopane and Weipe), North West Province (Taung, Stella, Delareyville, Maratsane), KwaZulu-Natal (Makhathini Flats), Mpumalanga and Northern Cape (lower Orange River, Vaalharts, Douglas, Marydale and Prieska). Hectares planted and yields for the Republic of South Africa (Swaziland excluded) are on the graph that follows:

Marketing Year Hectares Irrigation    Hectares Dryland    Total Hectares    Yield Irrigation    Yield Dryland    Average Yield
2006/07 9 720    8 394    18 114    3 633    485    2 174
2007/08    7 700    2 863    10 563    3 674    541    2 825
2008/09    5 979    3 242    9 221    4 067    825    2 927
2009/10    5 269    1 965    7 234    4 303    757    3 340
2010/11    4 151    960     5 111    4 865    712    4 085
 2011/12    11 640    1 505    13 145    3 931    715    3 563
 2012/13    7 231     2 166    9 397    4 405    541    3 514
 2013/14    2 956    3 871    6 827    3 979    687    2 112
2014/15    4 566    2 892    7 458    4 785   687    3 196
2015/16 8 592 6 636 15 228 4 946 1 129 3 283
2016/17 5 604 2 119 7 723 4 538 511 3 334
2016/17 figures are an estimate. Yield figures are Kg seed cotton per hectare

Source: Cotton SA

Cotton in South Africa is currently marketed on free-market principles, i.e. there is no intervention or restriction on the buying and selling of cotton and prices are determined by the market.

Farmers market their cotton in one of the following ways:

  • The seed cotton is sold by the grower to a ginner who gins the cotton and sells the cotton lint for his own account to spinners (and seed to processors), either directly or by making use of agents; or
  • The grower does not sell his seed cotton to the ginner but contracts the ginner to gin it on his behalf on payment of a ginning fee (some growers also own their own gins). The cotton lint and seed remain the property of the producer who then either markets it himself or contracts the gin or someone else to market the cotton lint (or seed) on his behalf.
  • The grower can gin their cotton in their own gins. They can then either market the cotton lint and seed themselves or get someone else to do it for them.