A Survey of Smaller Cotton Producing and Exporting Countries and Their Impact on the US Cotton Sector

In this study we analyze the impact of competitive forces/threats faced by the US cotton sector using the framework of PorterŐs five-force analysis.(1) The Porter framework, based upon the structure-conduct-performance paradigm in industrial organizational economics, helps in analyzing the level of competition within an industry and competitive strategy development. The five forces that are analyzed include, the threat from existing major cotton exporters such as India and Brazil, the threat from new entrants or smaller players like West African and Central Asian countries, the threat from substitutes for cotton, the bargaining power of buyers like China and the bargaining power of suppliers of inputs to cotton cultivation. In this context, we initially consider a subset of the five forces focusing on the threat from new entrants/smaller cotton producers and exporters in the global cotton markets. Recent technological advances and trade liberalization have moved some of the smaller cotton producers to the forefront of global cotton markets. The study identifies these smaller and emerging cotton producers and exporters and categorizes them into three groups. These are Africa (Benin, Burkina Faso, Mali, Togo, Zimbabwe), Central Asia (Uzbekistan, Turkmenistan, Tajikistan) and Other smaller players (Pakistan, Greece, Turkey). The strengths, weaknesses, opportunities and threats faced by them are analyzed to understand their role in global cotton markets. The political, economic, social and technological changes that are unfolding in those countries and the strategies adopted by them to improve their cotton sectors are included in the analysis. Preliminary results indicate that many cotton-growing countries in Africa and Central Asia are adopting strategies to increase exports of value added products like cotton textiles rather than cotton lint. All these factors are expected to impact the competitiveness of US cotton sector in global markets. (1) This study is part of ongoing research being sponsored by Cotton Inc.