Industry Analysis & Industry Trends
Operators in the Cotton Growing industry have endured extreme revenue volatility and fluctuating profit margins over the past five years, with a range of external factors influencing industry performance. Unfavourable growing conditions, such as prolonged dry weather and reduced irrigation water stocks, over the three years through 2014-15 forced farmers to allocate less land to cotton, which is a water-intensive crop. Consequently, production dropped significantly, leading to revenue declines for most of that three-year period. However, increased levels of annual rainfall are expected to boost production over the two years through 2016-17, with revenue growing in line with the larger area allocated to cotton growing... purchase to read more
Industry Report - Industry Key Buyers Chapter
Market share concentration in the industry is low. As the majority of agricultural operators are family-run farms, market shares are often highly fragmented across the sector. The Cotton Growing industry is no different in this respect, although some major players do run sizeable operations. The four largest companies are estimated to account for significantly less than 20% of industry revenue in 2016-17.
Structurally, the industry is highly fragmented, with the larger players wielding slightly more market power. Unless small farms can grow to the point of having comparable economies of scale, they face problems remaining profitable. The market price is set in contracts between growers and ginners, and is influenced by increasing price competition between large players... purchase to read more