7 Cotton Traceability Challenges in Global Supply Chains and How to Overcome Them

Cotton is a global fiber used in everyday clothes, but its supply chain – marked by complex processes – has long been shrouded in opacity. From the moment cotton is harvested to when it becomes a finished product on store shelves, the fiber passes through many hands, creating plenty of opportunities for substitution, blending, misrepresentation, and ethical violations.

But the tide is turning as the fashion and textile industry is responding to increased scrutiny over sourcing practices, especially in the light of legislation like the Uyghur Forced Labor Prevention Act (UFLPA). Consumers are also demanding greater transparency and traceability in the products they buy, holding brands and retailers accountable for their supply chains. 

Achieving traceability in cotton supply chains comes with its own set of challenges. Here are the seven most common cotton traceability challenges and how to overcome them.

Challenge 1: Opaque and fragmented cotton supply chains

Cotton is grown in over 75 countries, from high-tech, large-scale mechanized farms in the U.S. to regions where farming techniques remained unchanged for 2000 years. Each of these regions has its own environmental, social, and labor conditions that impact how cotton is grown, cultivated, and processed.

Once cotton leaves the farm, its path becomes murky. The fiber goes through multiple stages of processing – ginning, spinning, weaving, dyeing, and manufacturing – and can be mixed with cotton from other regions along the way. This makes it difficult for brands to track and verify where their cotton truly comes from, especially as each tier of the supply chain might not have a direct relationship with the next.

Challenge 2: Cost-driven substitutions and blending

The opacity in cotton supply chains is not always accidental; in many cases, it’s by design. Once a bale gets past the mill door in a lay down – where multiple bales are combined for spinning – there is a high risk of substituting non-compliant cotton for certified cotton. This is often driven by cost savings or supply chain disruptions, and when specific materials are unavailable there’s a temptation to use alternative fibers that may not meet the original specifications requested by brands and retailers.

While these substitutions and blending may help suppliers reduce production expenses and meet delivery schedules, they cause quality discrepancies and can obscure the truth about what materials are actually used in final products. This compromises the integrity of the entire supply chain and makes it impossible to trust the final product as 100% compliant or ethically sourced.

Challenge 3: Lack of standardization

Countries involved in cotton production and manufacturing have different regulations and standards, not just in growing but also in manufacturing. For example, while some countries have strict requirements for documenting the origin of cotton, others may have more lenient or nonexistent regulations, creating loopholes for less scrupulous suppliers to mislabel or misrepresent their products. As a result, cotton that appears to be “clean” might actually come from a place with poor human rights or sustainability practices further down the line.

These inconsistencies make it hard for brands to harmonize their compliance with both local regulations and broader, international sustainability commitments. Without a uniform standard for sustainable production, confusion and delays can arise during manual audits, causing non-compliant cotton to slip through the cracks.

Challenge 4: Forced labor in high-risk regions

Global regulations like the UFLPA, Canada’s Forced Labor Act, and the EU forced labor ban have placed forced labor under intense scrutiny. While these regulations aim to prevent forced labor products from entering markets, many brands only engage with their Tier 1 suppliers, leaving large parts of their supply chains – especially raw material sourcing – unchecked.

With policy makers, NGOs and consumers raising awareness and demanding transparency, brands need to have a complete picture of their supply chain. Even if suppliers’ paperwork appears to be in order, there’s no guarantee that the raw cotton hasn’t been mixed with fibers from forced labor regions deeper in the supply chain. Relying solely on supplier certifications without verification can put brands at risk of facing detentions, fines, or severe reputational damage.

Challenge 5: Transshipments to evade regulations

Transshipment, where goods are routed through intermediary countries to hide their true origin, is a growing challenge facing cotton supply chains. Cotton originating from regions under forced labor scrutiny is exported through third-party countries with free or favorable trade agreements with the U.S. to evade import restrictions.

These transshipment tactics not only circumvent regulations but also risk introducing relabeled, potentially non-compliant cotton back into a brand’s supply chain undetected, giving the false impression that it comes from a compliant region. Without physically testing the products, brands run the risk of unknowingly importing prohibited cotton and facing legal consequences.

Challenge 6: Resistance to change

The cotton traceability challenge is compounded by inconsistent levels of technological adoption across regions, where in some areas, cotton is grown and processed with little to no digital tracking, while other regions have more advanced systems. This creates a patchwork of traceability capabilities, making it difficult for brands to maintain a clear and consistent record of where their cotton comes from as it moves through the global supply chain.

Many suppliers, particularly in developing countries, may also resist implementing traceability technology due to fear of increased operational costs, disruption to traditional ways of doing business, and the perceived complexity of integrating new systems. But the resistance to change can result in delays in implementation and hinder progress towards a more transparent and ethical cotton supply chain.

Challenge 7: Limited access to objective, reliable data

Cotton is traded with very limited documentation, mostly based on buying dockets or potential ingredients going in, with very little actual point source or product-led traceability. Signed paperwork or vendor self-declarations – sometimes incomplete or inaccurate – are often the only proof of origin for many cotton goods.

Even AI and mapping solutions can fail to provide authentic data if the initial input is flawed. Without independent verification, such as forensic testing, the information circulating through the supply chain perpetuates more inaccuracies – leaving brands to steer through the murky waters of cotton traceability relying on trust alone.

Know where your cotton is coming from with Oritain

Oritain, a global leader in product origin verification, combines forensic science and data to detect naturally occurring elements in the cotton itself. Everything that is grown, reared or made, is a product of its environment, absorbing a specific ratio of elements and nutrients depending on where in the world it comes from.