Cotton Industry Faces Supply Challenges Amid Climate Pressures
With climate change casting a long shadow over the cotton industry, a significant majority of stakeholders foresee supply shortages and unpredictable volumes over the next five years. This insight emerges from a recent report by CottonConnect, a global sustainability organization.
The report is grounded in a survey of 124 stakeholders from the cotton value chain, including ginners, spinners, merchants, researchers, policymakers, and field execution leaders. These stakeholders, representing over 100,000 smallholder farmers across Pakistan, Bangladesh, Egypt, Turkey, and China, provided a wealth of data highlighting the industry’s current challenges.
Extreme weather events have already made a profound impact on operations, affecting nine out of 10 respondents. As a result, 80% of those surveyed have faced spot-market price spikes, while more than half have dealt with shipment or logistics delays.
Over 75% of midstream suppliers reported severe disruptions due to delayed or unpredictable planting seasons. Furthermore, 76.2% of government and academic respondents, along with 63.6% of field implementation teams, noted a decline in yields per acre.
Looking ahead to the medium term, 65% of respondents expect increased price volatility, and 52% foresee further declines in raw cotton quality. Additionally, 21% anticipate a shift towards alternative or synthetic fibers, while 18% predict sourcing shifts away from high-risk regions.
Alison Ward, CEO of CottonConnect, emphasized the importance of collaboration in the face of these challenges: “Climate pressures are creating new challenges across cotton supply chains, but brands and suppliers don’t have to navigate them alone. By working together and more closely with farmers and supply chain partners, we can better understand where support is needed. Nurturing longer-term relationships with farmers can also give them greater confidence to invest in the transition towards regenerative agriculture.”
CottonConnect’s Reel Regenerative program has shown promising results. Participants, trained in practical soil moisture and input management techniques, reported a 7.5% increase in yield over conventional methods. They also enjoyed a 34.9% higher net profit per acre and a 15.4% reduction in input costs. Moreover, these farmers lowered their greenhouse gas emissions by 35.3% and reduced blue water consumption by 35.6%.
Despite these gains, the report highlighted that 14% of respondents anticipate regulatory penalties due to climate-related disruptions. With traceability legislation gaining traction in the European Union and elsewhere, CottonConnect’s digital traceability platform, TraceBale, offers a potential solution to help farmers avoid such penalties.
Ward also noted the importance of traceability: “Traceability is crucial too, connecting action on the ground with sourcing decisions further up the supply chain. To date, through our TraceBale platform, we’ve mapped the equivalent of three billion t-shirts from farm origin to finished export. Combined with robust measurement and verification, this gives brands credible evidence of where cotton comes from and how it has been produced. With expectations around environmental and human rights due diligence rising, being able to substantiate what is happening on the ground is becoming as important as taking action itself.”
CottonConnect proposes a four-stage strategy for apparel brands to transition to climate-resilient supply chains. This includes supply chain mapping against regional climate risks, transitioning sourcing to verified regenerative or organic cotton standards, co-investing in field-level infrastructure, and integrating data into corporate disclosures and accounting.
The report concludes that combining regenerative agronomic standards, traceability, and rigorous measurement provides a blueprint for brands to secure raw material supply, meet regulatory standards, and enhance long-term value chain resilience.
Original Story at wwd.com