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Wal-Mart, Nike, H&M Among Biggest Purchasers in Booming Organic Cotton Market

The global market for organic cotton hit $3.2 billion in 2008, according to a new report from Organic Exchange, but the rapid growth of supply could lead to problems.

The organic cotton market is booming, and despite economic concerns looks to continue growing into the future.

According to the 2007-2008 Organic Cotton Market Report, released yesterday by Organic Exchange, the global market for organic cotton hit $3.2 billion in 2008, up from $1.9 billion in 2007.

Among the biggest drivers for this demand are companies that have announced plans to or have already begun offering products made with organic cotton. Organic Exchange released a list of the top 10 companies for organic cotton use around the world to coincide with the report:
1. Wal-Mart (USA)
2. C&A (Belgium)
3. Nike (USA)
4. H&M (SE)
5. Zara (Spain)
6. Anvil (USA)
7. Coop Switzerland
8. Pottery Barn (USA)
9. Greensource (USA)
10. Hess Natur (Germany).
In addition to all these companies, some of whom we've covered before on, in the past year alone we've written about organic cotton initiatives from Target, JCPenney, KMart, Toys 'R' Us, Marks & Spencer and American Apparel (the last of which is not purely organic, but "Cleaner Cotton," which includes organic and reduced-pesticide cotton-growing methods).

The growth of organic cotton is obviously good news: cotton as a crop is a huge user of insecticides and pesticides -- 25 percent and 10 percent, respectively, according to the Organic Trade Association. Those chemicals not only can pollute soil and water, but have serious impacts on the health of cotton growers and neighboring communities. The Pesticide Action Network of North America puts it bluntly when it writes:
Conventionally grown cotton uses more insecticides than any other single crop and epitomizes the worst effects of chemically dependent agriculture. [...] Cotton growers typically use many of the most hazardous pesticides on the market including aldicarb, phorate, methamidophos and endosulfan. Cotton pesticides are often broad spectrum organophosphates -- pesticides originally developed as toxic nerve agents during World War II -- and carbamate pesticides.
But there are two facts that make Organic Exchange's annoucement just the silver lining on an otherwise relatively dark cloud.

First, organic cotton still represents a miniscule fraction of the overall cotton market: about 400,000 acres of organic corn were planted last year (161,000 hectares), according to Organic Exchange, but the USDA announced in March that cotton acreage would fall 2 percent this year, and would only be planted on about 73.4 million acres. The total amount of cotton harvested is likewise tiny: over 668,000 organic bales harvested compared to about 110 million conventional bales.

The second downside of this report is that supply is growing quickly enough that Organic Exchange fears that speculators are flooding the market. "Farmers who planted on speculation or expanded without market partners may have shifted the market into a state of oversupply in 2009," said LaRhea Pepper, Organic Exchange's senior director.

So while it's great news that there is an increasing amount of organic cotton being grown, there is still obviously plenty of room for improvement and some concern that oversupply could strip away the profit margins that are so necessary to encourage farmers to go organic.

Cotton photos CC-licensed by Flickr users kash_if and flydime.

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