Cotton Production and Markets in the European Union
Cotton is an arable crop used mainly to produce fiber. Likewise, it is a major agricultural commodity traded in the international markets, whose largest producers are China, India, and the United States. Even though the European Union is not a major cotton producer, this crop does represent an important agricultural sector for some southern European nations. This article explores the history and actuality of cotton production, paying particular attention to European producers.
Cotton Production and Markets in the European Union
The EU accounts for 1% of the world’s cotton production because only Greece and Spain cultivate this crop in substantial quantities. However, in both of these nations, cotton cultivation represents an important economic sector. When Greece joined the EU in 1981, financial support to cotton cultivation was added into the EU’s Common Agricultural Policy (CAP) scheme. Afterwards, cotton aid was expanded to producers in Spain and Portugal upon their accession to the EU in 1986. However, in 1996, Portugal ceased cotton production. Within EU legislation and CAP regulation, genetically engineered cotton varieties are forbidden which means that farmers rely on inputs, such as pesticides, to safeguard their crops. Within the CAP framework, EU farmers receive the majority of their financial aid, up to 65% of their respective total, for adhering to high agricultural standards as well as best practices in regards to the environment. The other 35% of the applicable aid assigned to each farmer is crop-specific; in the case of cotton cultivation, EU authorities determine a yearly amount.
Today, Greece accounts for approximately 80% of the EU’s cotton production, having some 240.000 hectares under cultivations. Meanwhile, the southern region of Andalucía in Spain accounts for almost 20% of the European cotton production. A third, yet negligible, producer within the EU is Bulgaria, which accounts for less than 1% with approximately 1.000 hectares of cotton cultivation. In the case of Spain, the amount of hectares employed in cotton cultivation has varied slightly over the last five years. Staying well above 60.000 hectares since 2011, the area under cultivation in Spain hit its peak during 2014/15 with 75.000 hectares of cotton crops. However, the 2016/17 season cotton cultivation is expected to be at its lowest since 2010, with only 61.000 hectares of production. This area decrease is due to severe rains and flooding in the Andalucía region.
In terms of production, it is important to distinguish raw cotton from ginned cotton, which has been cleaned and processed for manufacture. Raw cotton production in Spain was of 226.000 metric tons during the peak year of 2014/15, which is well above the 184.000 tons average of the last five years. However, production for 2016/17 is expected to be below average with a forecast yield of 175.000 metric tons. Once ginned and ready to be manufactured into cloth, the actual amount of cotton is reduced in almost half. In spite of its limited cotton production, the EU has become a net exporter of this commodity over the last several years. Furthermore, the EU is an open market for cotton with no import taxes or export-specific subsidies.
Cotton production within the EU may become more important during years to come. As West African cotton producers, including Mali, Burkina Faso, Chad, and the Ivory Coast, transform their plantations into more lucrative crops, such as sesame seeds, the European cotton markets might experience a supply shortage.