Hemp

Hemp is Cannabis sativa grown for fibre, seed, and cannabidiol rather than intoxication, separated from marijuana by a legal threshold rather than a botanical one: at or below 0.3 percent THC in the United States and most of the world, 0.3 percent in the EU since 2023 (raised from 0.2 percent). That single number is the whole regulatory architecture of the crop, and it is a testing threshold, not a visible difference. A field of fibre hemp and a field of marijuana look alike, which is the root of nearly everything unusual about this market: the crop was banned for what it resembled, and it is farmed today under a compliance regime no other fibre crop carries.

The plant yields three genuinely different products from one stem, which is the second reason it trades strangely. The outer bast fibre is long, strong, and rot-resistant, historically the material of rope, canvas, and sailcloth and now used in insulation, hempcrete, automotive interior panels, and specialty textiles. The woody inner core, the hurd or shiv, goes to animal bedding and construction board. The seed is a food, sold as hulled hemp hearts, pressed for oil, and milled for protein powder. And the flower is the source of CBD. A fibre buyer, a food buyer, and an extractor want almost nothing in common from the same field, and the varieties, planting densities, and harvest timings that suit each are different, so "hemp" is really several crops sharing a name.

Production is small by commodity standards, and the widely repeated numbers are mostly wrong. World output of true hemp ran to roughly 368,000 tonnes in 2024 (FAOSTAT), of which France is the largest producer at about 135,000 tonnes, roughly 37 percent, ahead of China at about 106,000 tonnes, roughly 29 percent. The EU as a whole is about 54 percent of world output, and France alone is about two-thirds of the EU. That ordering is worth stating plainly because the claim that China grows something like 70 percent of the world's hemp circulates widely and cannot be traced to any primary source. China is the largest processor and the center of hemp textile spinning, and it has grown the crop continuously for millennia without ever banning it, but it is not the largest grower.

Treat every hemp tonnage with suspicion, including those. National statistics report whole harvested straw, retted fibre, and processed long fibre interchangeably without saying which, and a hectare yields roughly seven to eight tonnes of straw against about one tonne of seed, so the reporting basis moves the number by nearly an order of magnitude. EU reported production jumped roughly fivefold between 2017 and 2019 on essentially flat planted area, which is agronomically impossible and almost certainly a change in reporting basis rather than a real harvest. The figures above are best read as straw, not spinnable fibre. Even taken at face value, world hemp is a rounding error against roughly 25 million tonnes of cotton. Commercial market-size estimates should be handled separately again: published 2024 valuations range from about $6.5bn to $20bn, a threefold spread for the same year with no disclosed methodology, and they cannot be compared with farm-gate production, since the entire US crop was worth $445 million in 2024.

Turning stalk into fibre requires retting, the same controlled rotting step flax needs: the stems are left in the field (dew retting) or soaked so microbes break down the pectin binding the bast fibre to the core, after which the stalk is broken and scutched. Retting is weather-dependent, quality-critical, and hard to industrialise, and it is a large part of why both hemp and flax stayed regional crafts while cotton globalised. The two are close cousins commercially: both are bast fibres, both are retted and scutched on similar equipment, both lost the twentieth century to cotton and synthetics, and both now sell partly on an environmental story, since hemp needs little irrigation and few pesticides and its construction uses lock up carbon.

The history is the most dramatic part of the market. Hemp was among the earliest cultivated fibre crops, and for two thousand years it was strategic naval material: the rigging, cordage, and sailcloth of European fleets were hemp, and colonial governments compelled its cultivation. The word canvas derives from cannabis. Steam, steel cable, and then manila and synthetic rope removed that demand. Then came prohibition by association. The US Marihuana Tax Act of 1937 did not technically ban hemp but taxed and regulated it into commercial extinction, at a moment when mechanical decortication had just made fibre processing viable. In 1942, with Pacific manila supply cut off, the USDA reversed itself and produced the film Hemp for Victory, and American farmers planted a wartime crop that vanished again as soon as the war ended. The 1961 UN Single Convention then locked the association into international law for decades.

The modern revival is a regulatory story, not an agronomic one. The US 2014 Farm Bill permitted state pilot programs; the 2018 Farm Bill legalised hemp federally below 0.3 percent THC and set off the CBD rush and the bust described above. The 0.3 percent line then produced a consequence nobody intended: because it regulates delta-9 THC specifically, a legal-hemp industry grew up converting hemp-derived CBD into delta-8 THC and other intoxicating analogues, sold in ordinary shops in states where marijuana itself was illegal. Closing that loophole has been the main US hemp policy fight of the mid-2020s, and its resolution matters more to hemp's economics than any crop variable. Meanwhile the durable industrial demand, insulation, hempcrete, composites, and food, has kept growing quietly and without drama.

The US crop shows how lopsided the economics remain years after the bust. Of $445 million of American hemp in 2024, $386 million was floral, the cannabinoid crop, grown on 11,827 acres. Fibre was worth $11.2 million on 18,855 acres, and grain $2.6 million. So the flower is roughly a third of the acreage and more than eighty-five percent of the value, while fibre occupies the most land and earns almost nothing: fibre value actually fell about 3 percent in 2024 even as volume rose 23 percent, an implied price near $0.19 a pound, about $410 a tonne. That is the central tension in hemp. The industrial uses are the durable, defensible, growing ones, and they are worth so little per acre that the crop keeps being pulled back toward the molecule that got it into trouble.

There is no futures market for hemp: no exchange currently lists a contract on hemp fibre, hempseed, or CBD, and no attempt has ever established one. The reasons are the ordinary ones for a failed contract, stacked. There is no standard deliverable grade, because fibre, hurd, seed, and CBD biomass are different goods and even CBD is priced per CBD point per pound rather than per pound. Traded volume is far too thin to support a contract. Banking and clearing have been reluctant while the crop sits adjacent to a controlled substance. And there is a risk no other crop carries: a standing field can test hot, above the THC threshold, and become a crop that must be destroyed rather than sold, which is not a price risk a futures contract can express. Hemp is priced in bilateral contracts between growers and processors, frequently on contract-farming terms agreed before planting, which is how a crop with real industrial demand can still have no screen price.