Climate Change, Cotton Production and Processing in Producing Countries

This paper aims to analyze the impact of climate change on cotton production and processing. Using the panel data Vector autoregressive (VAR) model on a panel of 48 countries that are both producers and processors of cotton, the results show that Climate variability has a negative impact on cotton production and processing. In fact, 15% of the variation in production is due to variations in rainfall and 30% is due to variations in temperature. In addition, variations in cotton processing are similarly sensitive to climate variability, with 6% and 38% due to temperature and rainfall variations, respectively. At the same time, climate change has a negative impact on shocks to cotton production and processing, although these are more affected by variations in processing, estimated at 6% (12%), than by variations in temperature (rainfall). Moreover, the estimates by region (Africa, Asia, America, Europa) confirm the above-mentioned differential impacts, with the effects of temperature and rainfall variations being more pronounced in Africa and Asia.