· Bangladesh's cotton consumption is forecast to reach 8 million bales in 2023-24, driven by growing apparel exports.

· The country is nearing surpassing China as the world's largest cotton apparel exporter.

· Apparel exports were $47 billion in FY23, with a goal of $50 billion in FY24.

· Global cotton consumption is forecast to grow 5.8 per cent.

Bangladesh's cotton consumption for 2023-24 is forecast to increase by 800,000 bales to 8 million, driven by burgeoning apparel exports, according to the latest USDA Cotton World Markets and Trade report. The country is close to surpassing China as the world’s largest cotton apparel exporter, with stronger demand prospects expected to drive cotton consumption even higher.

Practically all cotton yarn, which accounts for the nation’s cotton consumption, is sold domestically to Bangladesh's robust fabric and apparel sectors. Apparel exports have been vital for Bangladesh's economic growth and stabilising its domestic currency by obtaining US dollars through foreign sales.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) reported that apparel accounted for over 80% of the country's total exports in the fiscal 2023 (FY23) (June 2022–July 2023), amounting to roughly $47 billion. This value is more than double the figure from a decade ago and surpasses the previous year's record, reflecting global importers' increasing preference for Bangladesh's cotton products.

Exports of knit apparel have been essential to this growth, with the value nearly tripling over the past decade. Local textile mills meet 85 per cent of the demand for knit fabrics and about 40% for woven fabric, mainly imported from China. Knitted cotton shirts and sweaters have been the significant products contributing to the recent record values, as per USDA’s report.

Apparel exports to the world's largest importing markets, such as the United States and the European Union, were notably high in 2022. The United States Fashion Industry Association's (USFIA) annual Fashion Industry Benchmarking Study highlighted factors that support even stronger future apparel export prospects.

According to the study, US fashion companies are reallocating sourcing orders to markets, including Bangladesh, in response to the Uyghur Forced Labor Prevention Act, China Section 301 tariffs on Chinese apparel exports, and efforts to minimise logistical and political risks. Bangladesh, India, and Vietnam were identified as the three suppliers that retailers plan to increase sourcing from over the next two years. Moreover, the USFIA study showed that Bangladesh is the most competitive apparel supplier from a cost structure point of view, scoring higher than any other country.

The Export Promotion Bureau of Bangladesh is targeting more than $50 billion of apparel exports in FY24. Meanwhile, spinning mills' operating rates in 2023-24 are expected to rise, reflecting the textile supply chain's replenishment of depleted stocks of yarn, fabric, and apparel.

On a global scale, the 2023-24 outlook for cotton shows production down more than 2.7 million bales to 114.1 million bales, primarily due to lower US and Uzbekistan crops. Consumption is up for the second consecutive month at 116.9 million, mostly led by China. Global trade is forecast up 400,000 bales to 43.9 million, while global ending stocks are down 2.9 million to 91.6 million bales. The US season-average farm price for 2023-24 is forecast up 3 cents to 79 cents per pound, the report added.

For the 2022-23 outlook, production is slightly higher at 118.3 million bales with larger crops in Brazil and Argentina. Consumption is projected up more than 700,000 bales to 110.5 million, led by higher use in China, Turkiye, and Bangladesh. Global ending stocks remain unchanged at 94 million bales, 8.5 million higher compared to the previous year.

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