TEXAS – A leading US commodities expert has warned of the huge threat to global cotton markets by the US’s ongoing support of the petrochemicals sector to produce raw materials for cheap plastics and polyester. The warning comes after the US granted a US$1.5bn tax subsidy to a Taiwanese business to establish the world’s largest petrochemical plant in Louisiana, a significant US cotton producing state.
It is claimed the sheer scale of the project, covering 2,400 acres along the Mississippi river, could impact supply/demand dynamics in the petrochemical sector – and, as a knock-on effect, help depress virgin polyester prices for years. In turn, this could scupper apparel industry efforts to shift towards recycled polyester, especially given the industry’s notorious sensitivity towards changes in raw materials prices.
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