There havenΆt been a lot of positive developments in the cotton world lately due to weak prices, constant pressure from synthetic fibers and the continuing fallout from the rash of defaults that have occurred in the last two years. ThatΆs why the timing couldnΆt be better for Cotton Council International (CCI) to share its sunny outlook for cotton demand in China, the worldΆs largest consumer of the natural fiber.

Karin Malmstrom, director of CCI in China, says she is “very optimistic” about growing retail demand for cotton products, largely due to surveys that show a growing middle class that is increasingly willing to pay a premium for natural fibers. That increase in demand could drive overall cotton consumption to about 9.6 million tonnes in 2012, up from 9 million tonnes in 2011.

However, while demand is on the rise, cotton production in China is on the decline. Plantings could be down as much as 17% this year due to the rising cost of inputs – especially labor. In 2011, the average cost of planting cotton increased by 17% over the previous year. The cost of materials rose 13% while labor jumped 20%, said Hua Wei, chairman of Shandong Swan Cotton industrial Machinery Stock Co., during a presentation he gave at the 2012 China Cotton Industry Development Summit Forum, held in Chengdu earlier this month.

Rising demand in Chinese mills, combined with an expected 13% drop in the countryΆs production to 6.4 million tons, add up to big increases in ChinaΆs cotton imports. They could rise by more than 50% this year to about 4 million tons, the highest import figures for China in six years.