The price of cotton fibre appears to be stabilising after a year-long climb which saw it reach record highs in March. The retreat comes as a relief to apparel retailers, brands and manufacturers, as Joe Ayling found out during a visit to Turkey.

Marsha Powell, consultant for Cotton Council International (CCI) & Cotton Incorporated, told delegates at last week's Istanbul Fashion Apparel Conference that after peaking at over US$2.44 per lb, cotton prices have now stabilised at around $1.55 per lb.

As just-style reported earlier this week, the fall is the result of a slowdown in demand and a switch to man-made fibres.

Powell points out that cotton prices have been affected by a melting pot of issues including lower production in China, floods in Pakistan, capacity constraints in the US, an export ban in India, and speculators playing the market.

But a surge in the price of cotton by around 150% during the past 12 months has left a number of fashion retailers, including Next and Tesco, with no alternative but to hike prices.

Turkey counts cost of imports
Addressing Turkish delegates last week, Powell said the majority of Turkey's cotton consumption relies on imports of cotton fibre, 55% of which comes from the US.

Turkey is the world's eighth largest cotton grower, according to CCI, but uses all of its crop for domestic spinning mills. China is the world's largest cotton producer, followed by India, the US and Pakistan, but still imports a third of its cotton - again mainly from the US.

Powell says: "If you look at consumption and how much of that is coming from imports, you can see that in countries like China and Turkey, imports of cotton fibre account for a significant percentage of their cotton usage at the spinning mill."

According to CCI, Turkey is the fourth largest consumer of cotton globally, behind China, India and Pakistan - with these four markets making up 77% of the cotton spinning industry.

Powell adds that Turkey is the second largest purchaser of US cotton, buying around 18% of stocks for its spinning mills.

"We should also be promoting cotton production inside Turkey. The country is traditionally a very strong cotton producer and has potential to produce more, of course.

"Turkish cotton production has gone down for the past four years, and one of the reasons for that is because farmers are free to plant whatever crop they want to and in doing so earn more money."

She went onto say that land in South East Turkey had potential be levelled and become more suitable as an effective cotton production area.

"There is a big difference between the spinning capacity and the cotton production capacity, and Turkey would have to have an enormous expansion of cotton production to fully make up that difference."

What next?
In addition to the recent price rebound, the future price of cotton is expected to benefit from increased cotton planting in the US, by around 20%, over coming seasons.

However, "huge export demand" means that just 3% of US cotton remains unsold, along with other advanced buying, according to Powell, again putting pressure on prices.

In answer to the billion dollar question of what the future holds, Powell was unable to forecast whether cotton prices would continue to level off during the coming year though - saying much was dependent on weather conditions in cotton growing areas.

"The future price nobody knows," Powell adds. "That's why we're watching it so closely."