Despite continuing double-digit growth in the retail market for organic cotton last year, new research has also revealed a massive 37% drop in production - even though retailers say they intend to expand their use of the fibre.

The findings are included in the sixth annual Organic Cotton Market Report from Textile Exchange.          

It shows that the organic cotton retail market increased 32% year-on-year in 2011, while organic cotton production fell for the first time in ten years. India, the country producing almost 70% of organic cotton, saw the greatest reduction.

The global drop comes even though 81% of brands and retailers indicated in a Textile Exchange market survey that they planned to expand their use of organic cotton in 2011.

The report deduces that the increase in demand and paradoxical decline in organic cotton production is the result of five interrelated issues that need attention across the entire value chain.

There is a disconnect between consumers and producers, with the message that retailers want to expand their organic cotton programmes not getting delivered to the farm gate.

Brands and retailers also appear to lack effective systems to collect usage data for organic cotton and other sustainable textiles, the report says. And it would seem some farmers are still not getting any return on their investment for producing organic cotton.

"We must reconcile price versus the true cost of sustainability and recognise the importance of intimacy and commitment in our business model to keep our industries healthy and vibrant," explains LaRhea Pepper, managing director for Textile Exchange.

"By acknowledging the interconnectivity between farmers, manufacturers, brands, and retailers, and by using the powerful industry-wide tools at our command (such as the Sustainable Apparel Coalition's Higg Index), I know we will be able to say we found fresh and creative solutions to key industry issues before another 10 years pass."

Click here to access a free copy of the Organic Cotton Market Report from Textile Exchange.