Cotton pickin' good
Central America may be a fertile ground for the production of cotton, either for local consumption or export. International cotton prices have fallen in the last five months, to about $145 a pound last week, mainly as a result of low demand and high inventories in Asia, after reaching a record high of $230 in February.
However, the value of cotton is still high, compared with earlier periods. Between mid 2006 and early 2010, cotton futures traded in a range of around $50 to $70.
The growth of sewing operations in the region over the past two years is another incentive to increase cotton production, especially in Honduras and Nicaragua, where government officials and several local agribusinesses last week expressed interest in the concept.
Maquiladoras in the region produce both cotton and wool garments. The FTA between the U.S.and Central American countries creates favorable conditions for garment exports from the region to the U.S. market. Nicaragua and Honduras have major maquiladora operations, as well as relatively large tracts of land, and consistently warm temperatures, which make them attractive places for growing cotton.
At the same time, a cotton-production program for local consumption requires spinning operations, which convert raw material into yarn.