Improving competitiveness of cotton fiber

Transcription

1 Improving competitiveness of cotton fiber By Zbigniew Roskwitalski, Executive Vice President, Gdynia Cotton Association, Poland Welcoming words Together with dynamic changes of the world economy, the world cotton market is changing too, as well as the role and meaning of the cotton raw material. In spite of this, cotton remains the most important natural fibre. Being one of the crucial raw materials in the world economy, it guarantees jobs to millions of families all over the world. Cotton production and textile industries related to it absorb the oversupply of work-force, the local raw material and they are the source of foreign currency revenues. They may be an important element dynamising the economies of the countries producing and processing the fibre. That is why, it is worth wondering, analysing the current state of the world cotton sector, what activities should be undertaken in order to make cotton more competitive against other fibres and textile branches. Current situation of cotton fibre on the world market against other fibres used in the world textile industries 51

2 Since historical times, cotton has accompanied people. Previously, it competed only with other natural fibres and since several decades, additionally it has to fight a strong competition of a whole range of man-made fibres, particularly polyester. During last several decades, the cotton share in the world textile market has decreased considerably, Cotton lost a part of its applications, those being overtaken by other fibres, in certain fields. Nevertheless, thanks to superb utility and health properties of the fibre, cotton retains its position in the scope of textile products directly related to people. 52

3 The tendency of lowering of average world cotton consumption per capita, was stopped in If the present rising trend continues, during the nearest five years the consumption of cotton should grow from 3,54 up to 4 kg/head. Dynamically rises the per capita consumption of non-cotton fibres mainly synthetic ones. At present it is 5,5 kg/head, whereas 15 years ago it was equal to the present cotton consumption. In spite of lowering share of the cotton fibre in the world textile industry, the constant grow of world cotton production and consumption is noted. During the period of last 15 years, the consumption of synthetic fibres in the world has been growing much quicker than that of cotton. During that period, cotton consumption growth was 22 %, whereas the consumption of all fibres used in world textile industry rose by 50 %, and within it of non-cotton fibres as much as by 83 %. Several most important activities improving competitiveness of cotton, which should be undertaken by the world market and in the production and processing phases. 53

4 Cotton production phase Lowering the costs of cotton production: increasing the production of biotech cotton varieties; applying modern methods and agronomy; merging small farms in bigger areas able to adapt new technologies and modern methods of cotton cultivation; directing the help of international institutions (World Bank, Common Fund for Commodities...) in the scope of agricultural education to the poorest countries growing cotton. Improving cotton quality: growing of varieties best for a given region, introducing new cotton varieties; applying the modern technologies of cotton ginning and maintaining the ginneries in good technical condition; proper storing and transporting of cotton. Production costs, and consequently also cotton price are closely connected with the yield from hectare and with the volume of investments in the sphere of production. Nowadays, we note a great difference between the levels of cotton production yield from the level lower than 200 kg/ha in some of the African Countries up to ca. 800 kg/ha in Australia and Israel. 54

5 After a period of stagnation in , during the last 6 years a considerable (by 25 %) rise of the average world yield per hectare took place. It seems that since the beginning of the 90s of the 20th century, in the developed countries growing cotton, the possibilities of rational increasing of the yield with traditional agro-technical methods had been exhausted. In the developing countries, mainly in those poorest ones, there exist big reserves in this respect. One can almost be sure that the underdeveloped countries will not be able to introduce modern methods of cotton growing and production management without help from outside. The education aid would be particularly helpful bringing the benefits in the scope of rising the cotton yield. Another barrier hindering the development of efficient production of cotton, as well as the management and technological progress is the fragmentation of the growing area. In some countries, the average planting area is as small as 0,2 ha, and it is almost normal that the area is 0,4 05, ha. The development of such farms is almost impossible, because, for instance, they are never granted investment credits. Another underestimated problem appearing when the production is fragmented, is the diversified quality of cotton and consequently, non-uniformity of its lots released from ginneries. It is necessary then, to enhance the small farmers to join into bigger production units of cooperative type etc. able to implement modern technologies and work management. Another way bringing quick effects for rising the yield from hectare and lowering the production costs is planting the biotech cotton varieties. The 25 % rise of yield obtained during the last 6 years, is mainly due to the growing of biotech cotton varieties. Results received in various countries are very promising. Report of the Second Expert Panel on Biotechnology of Cotton confirms that thanks to reduction of the agronomy activities and of chemical agents, the outlays on cotton production can be lowered, with the simultaneously rising yield. 55

6 Assuming that the world cotton growing area cannot be extended anymore, which since 50 years has been mln hectares, the development of biotech cotton varieties appears to be one of few but real chances for increasing the cotton production, in the coming years. Improving cotton quality: growing of varieties best for a given region, introducing new cotton varieties; applying the modern technologies of cotton ginning and maintaining the ginneries in good technical condition; proper storing and transporting of cotton. The main cotton competitor on the world market of textile fibres is the polyester. Cotton producers competing with polyester manufacturers have to retain the cotton fibre quality on the highest possible level, by means of growing the best varieties and by applying the modern technology in cotton growing and ginning. Non-uniformity of cotton parameters and trash in cotton are the reasons of technological troubles during the processing of raw cotton in spinning mills, and they are the real barrier for production of yarns of the highest quality. An adverse phenomenon is the cotton quality degradation caused by man at various stages of its production, transport and warehousing. The effect of a bad work of a ginnery are weakening, shortening and neppiness of fibres. Warehousing of seed cotton in bad conditions often leads to it moistening and to change of fibre colour and to its rotting. Environment pollution in the growing regions, careless warehousing and neglecting the required cleanliness standards in ginneries are the reasons of cotton being contaminated with foreign matter. Its detection, and particularly removing from fibre in the phase of its processing, requires special equipment and it is expensive. In spite of technological progress, the gravity of the problem does not decrease, and that is why the producers themselves must 56

7 eliminate this kind of deficiency, to protect their own interests and the interest of the processing companies, thus limiting the financial losses. Cotton processing phase Lowering the cots of production of yarn and other cotton products: shortening of the technological process and applying modern technologies; using economical blends of raw materials, depending on the projected yarn parameters; Broadening the range of ready-made cotton products. Not only the cotton growers, but the spinners and manufacturers of textile machinery face new challenges. To keep pace with the competitors and to lower the costs of yarn production, the spinners should install more and more efficient technological lines and they should use computerised systems (such as for instance Engineered Fibre Selection) which allow for a precise match of raw material in order to manufacture a yarn of strictly defined parameters. In the coming years, the trials of shortening the technological process should be continued. Simultaneously with the development of textile technologies, the volume of cotton products characterised with easy ironing and easy maintenance should be rising, as well as the volume of exclusive products made of long staple cotton, whose quality and elegance are ahead of high quality products made of other materials. Mariage of cotton with other natural fibres may also contribute to the higher competitiveness of cotton when compared to chemical fibres, mainly polyester. World cotton market Solving the problems of world cotton market related to subsidies and trade policy, such as: government subsidies for production, exports, and processing of cotton; government manipulations with currencies exchange rates; understating the prices of cotton products and dumping; barriers existing in international cotton and cotton products turnover. Activities aiming at improving the observance of the sanctity of contracts and good trading practices. Instrumentalisation of cotton testing and harmonisation of the system of its evaluation. Cotton promotion. A well operating market is one of the indispensable conditions of retaining or improving the competitiveness of cotton against other textile raw materials. Prompt solutions of the following problems should be found: subsidising of cotton production and exports practiced in some of the producing countries; various forms of aiding the textiles producers and the dumping practices of understating of the prices of ready-made textile goods. All activities connected with these issues are carefully watched by cotton producers and processors, they are dealt with by international cotton organisation (ICAC, Euratex, 57

8 Eurocotton... ) and international disputes resulting from them were subject to the arbitration at WTO. A next step making the market more efficient is cancelling the barriers in trade of cotton and goods made of it. Since 1 January 2005, WTO cancelled the limitations in textiles trade. The positive effect of liquidation of the barriers on the world market might be the rise of world cotton production and consumption, as well as a free turnover of ready made goods in the majority of the world countries. Simultaneously, there appear some fears, that the world market will be dominated by only one producer, due to his unbelievably low prices (China) what could lead to the fall of whole branches of textile industry in other countries, and to loosing jobs by hundreds thousands or even millions of people. Weakening, or even liquidation of competitors, may lead to limiting of the range of products and to hindering the technological progress, worsening the quality of products and the price diktat of one manufacturer or their small group. Right now, facing these fears, cotton organisations should carefully monitor the world market, particularly in the context of negative phenomena, such as all kinds of subsidies in processing industries, understating of products prices and dumping. Next adverse phenomenon affecting the cotton market, which should be eliminated, is violation of the principles of sanctity of contracts and of good trading practices. Nonfulfilment of the contract conditions, or their breach, or non-performance of the awards of arbitration courts always lead to losses and sometimes to the bankruptcy of some of the participants of the market and they are a serious barriers in the world cotton trade. Multiplicity of rules, and particularly their ignorance are a serious limitation in the international trade and too often are they the reasons of disputes and failures in realisation of cotton contracts. Improvement in this field could be brought by education and harmonisation of rules applied in the international cotton turnover. European Cotton Associations have just completed compilation of harmonised European Cotton Rules. In future, their application should facilitate realisation of contracts for cotton and they also should contribute to improvement in the scope of observing good trading practices. Still, a frequent reason of failures in realisation of contracts and of many disputes is an insufficient knowledge about cotton and its classification. A priority role in this respect could be played by Cotton Associations organising proper courses and trainings. One of such priority tasks, in the GCA is the education activity. We hold trainings, seminars, and full-time cotton classification courses where the students can get full knowledge in the scope of cotton turnover and practical skills of cotton classification. It follows from our many years experience that this kind of activity brings positive and visible effects to all participants of the world cotton market. Development of instrumental methods of testing and unification of cotton evaluation systems can also contribute to the improvement of functioning of the market. Introducing on a big scale of the instrumental testing should considerably reduce the number of cotton quality disputes. These questions are dealt with by the Panel for Commercial Standardisation of Instrumental Testing of Cotton (CSITC). 58

9 A very important market developing element which could be able to increase cotton consumption and its share in the world textile industry is a broadly understood cotton promotion. Unfortunately, the extent of cotton promotion in the world should be regarded as insufficient. After 1990, the only producer strongly promoting its fibre remained the USA. The Americans estimated that thanks to promotion, the market share of cotton in the USA and Canada rose from 34 % in 1988 up to % in During the same period, in the countries where cotton has not been promoted, these shares were lowering for instance in the European Union from 37 % in 1988 down to 33 % in In the period of intensifying ecological campaigns and growing ecological consumers consciousness, the necessary action of the cotton sector all over the world is creation of the image of cotton and reminding the consumers about its virtues and characteristics. The International Forum for Cotton Promotion (IFCP) established in 2000 at the session of ICAC is focusing on support and coordination of national cotton programmes. This is concordant with natural tendencies of creation of national approach to cotton promotion in the countries being the producers, as well as consumers. Characteristic feature of such type of cotton promotion is a strong campaign for the national product, not always taking into consideration the global approach to the issue. At present, IFCP, closely cooperating with ICAC, has undertaken the activities aiming at a strict coordination of national plans on the international forum. The aim of such activities is popularisation of best and most effective models of promotion and their coordination. A different approach to cotton promotion is presented by countries which are not cotton producers but processors and consumers. There, cotton promotion has to be directed towards increase of domestic demand for cotton products disregarding the raw material origin. In the GCA opinion, one of the more important elements joining all promotion campaigns should be introduction and usage of pure Cotton Emblem. 59