Six countries will control the global cotton industry within 10 years, with Brazil rising to be the third biggest exporter, leading cotton merchant Bill Dunavant said on Thursday.
Dunavant, president of Dunavant Enterprises, the world's biggest cotton trader, said cotton consumption and production would consolidate to China, the United States, India, Pakistan, Turkey and Brazil, with Australia taking a smaller role.
"Already over 76 percent of the cotton produced and consumed in the world is in these six countries," Dunavant told Reuters at the Australian Cotton Conference, adding that China would continue to lead in consumption.
"They're going to be consuming over 40 million bales probably by the year 2014." The US-based global cotton merchant predicted China would consume 33.75 million 480-pound bales in the 2004/05 season and produce up to 29.5 million bales.
Donavan saw Australia, currently the world's third biggest cotton exporter after the US and Uzbekistan, being squeezed out by upstarts Brazil. "The potential in Brazil is just enormous. It can even double (production) in the next 10 years to close to 10 million bales," he said, adding that half of this would be exported.
"Brazil will become by the year 2014 probably the third-largest exporter in the world." Brazil will produce 5.7 million bales this year, exporting two million of those, Donavan said.
The US Department of Agriculture expects Brazil to export 900,000 bales. Donavan said Australia's irrigated crop still had the quality advantage over Brazil's dryland cotton but the gap was closing fast.
"This was the first year that Brazil produced some of these premium qualities and the price difference is such that the Americans and the Australians are going to have to really watch out because it's very competitive," he said.
Drought-afflicted Australian cotton farmers are struggling to get back to normal production of around 3 million 500-lb bales, expecting to grow 1.45 million bales in the crop year ending March 2004 and 2.4 million bales the year after.
Donavan echoed concerns at the Australian Cotton Conference that the global industry was losing ground to synthetic fibres. "We don't collectively promote cotton like we should," he said.
"We're fighting each other on agricultural subsidies while synthetic fibres take our markets every day." Queensland Cotton Holdings Ltd Chief Executive Richard Haired and Cotton Australia President Geoff Hewitt called for the creation of a global body to promote cotton over synthetics.
Competition from synthetic fabrics is seen as one of the key factors depressing cotton prices, which have fallen to around 45 US cents per pound this year, from more than 70 cents in late October.
Donavan said there was enthusiasm in the cotton market for a global body but funding was the stumbling block. "You can get a lot of people talking about promotion but when it comes time to write the cheques that's where it becomes a problem," he said.
Donavan also ruled out chances of Washington ending its cotton subsidies. Brazil has successfully argued to the World Trade Organisation that the subsidies exceed agreed limits, leading to oversupply.
"It's going to be a hard reality to completely do away with them and I don't think that potential is there," he said. "Are subsidies good? No Are they necessary? Yes. Is there free trade and fair trade in the world? Absolutely not."