What is in this article?:
- National Cotton Council updated on key issues
- China’s stocks policy
- The National Cotton Council was updated on key issues and upcoming challenges and opportunities facing the industry.
China’s stocks policy
Gary Adams, the NCC's vice president, Economics & Policy Analysis, told attendees in his economic update that China’s stocks policy is a key to future price direction. Rebuilding China’s reserves has provided support to prices but there are concerns about long term impacts on cotton demand. Cotton still has the challenge of competing with 75 cents polyester on the demand side, while trying to hold acres in the face of high grain and oilseed prices. Price volatility remains a concern to the industry. Regarding U.S. production, Adams noted USDA’s recent 2012 production estimate of 17.7 million bales versus 15.6 million bales in 2011. He said although drought conditions persist in much of the Southwest, production is expected to bounce back from the low level of 2011. Prospects in other cotton-producing regions are reasonably favorable, which is providing more production potential for the US crop than the 2011 crop, even with this season’s reduced plantings.
Ricky Clarke, a Cordova, Tenn., merchant and current ACSA chairman, reported on the difficult circumstances facing the industry given the widespread contract defaults by international mills.
NCC President/CEO Mark Lange reported on the Peruvian countervailing duty case against U.S. upland and said the NCC is taking aggressive steps in pursuit of a successful outcome. He said the NCC has employed a leading law firm in Lima, Peru, that is now representing the NCC as a party of interest in the proceedings.
CCI President Jimmy Webb reported on multiple CCI COTTON USA success stories, ranging from the “Naturally Color Your Life" promotion in China to the annual “Cotton Days” in Korea, Japan, Taiwan and Thailand. Among upcoming activities are: the CCI/Cotton Incorporated-led U.S. cotton industry executive delegation to Turkey (the U.S.’ second largest export market) and to Dubai for meetings with Pakistan customers; meetings with leading U.S. cotton importers in Bangladesh, China and Korea to discuss next year’s supply chain marketing programs; helping U.S. yarn and fabric manufacturers on convincing Chinese importers to use U.S. yarn; and preparing for the biannual Sourcing USA Summit in Rancho Palos Verdes, Calif., a flagship event that brings together the U.S.’ best customers with U.S. merchants and coops.
Webb said he was pleased to see CCI and Cotton Incorporated involved in organizations like the International Forum for Cotton Promotion, the Discover Natural Fibers Initiative and other global promotion efforts but “it will take a lot of work and a lot of continued investment in demand building to bring mill and end-use of cotton back … but it also means other countries and industries, if they are serious about the future of the cotton industries in their countries, will need to join in those investments in demand building as well. The U.S. can lead and can show by example, but we cannot do it all by ourselves.”