Colombia (South America) Cotton report 2008
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1 Colombia (South America) Cotton report Introduction. In Colombia there are two cotton harvests per year: The Caribbean or Atlantic Coast harvest, in the north of the country, and the Interior harvest. The geographic situation and the different climates allow for optimum conditions for the growing of cotton in each of the regions. In the Caribbean coast region, cotton is planted between July and October and harvested between December and March, with the department of Cordoba the principal producer. In the Interior, cotton is planted between February and March and harvested between July and October, with Tolima the principal producing department.
2 2. Area, production and productivity. - During 2008, the area under cotton decreased by 15%, with 39,335 hectares harvested, 71% in the Caribbean region and 29% in the Interior. - The principal reason for the decrease in area cultivated was intense competition for land from other crops, such as rice and corn due to increased prices in the world markets; in Tolima the land area under rice cultivation grew by 23.5% and in Cordoba by 16.5%. Another reason for the decrease in cotton area was the prolonged rain during planting season, leaving large areas of the Caribbean coast previously dedicated to cotton flooded. - Cotton harvested per hectare fell from 905 kilos to 888 kilos this year; this decrease in productivity was principally due to dry spells during the cottongrowing season and to a decreased use of fertilizers in some regions because of price increases in Because of the reduction in land cultivated and productivity, cotton production decreased by 16.7% in 2008, for a total production of 34,914 tons 1 in 2008.
3 Colombia: Area, production and fiber yields, For the 2008 cotton season there were 4,236 growers, with an average of 9.3 hectares of cotton planted; 50% of the growers had crops of 3 hectares or less. Colombia: Distribution by growers according to cotton parcels size, 2008
4 3. Transgenic Cotton Area. In 2008 the area under transgenic cotton continued growing, reaching 58% of total land under cotton, or 22,808 hectares. Colombia: Evolution and Share of Transgenic Cotton, In addition to the traditional Bollgard l seeds which represented 27.5% of total seeds, also noteworthy is the use of the Bollgard l seed with the RR gene, which represented 30.4% of total seeds. Colombia: % of Seeds by Technology, Share % Type Bollgard I Bollgard I + RR RR Conventional Total
5 In 2008, 12 varieties of cotton were seeded, of which six were transgenic seeds; noteworthy is the NuOpal variety, representing 27.2% of total seeds. Noteworthy among the conventional seeds is the Delta Opal, which is the same germoplasm without the transgenic technology, representing 27.3% of the total seeds. Colombia: Seed share by Type, GMO CONVENTIONAL Share VARIETY DP 455 BG/RR % 15.0 NUOPAL RR 10.5 NUOPAL 27.2 DELTA OPAL RR 0.1 ROUNDUP READY 0.1 DP 555 BG/RR 5.2 Subtotal 58.0 DELTA OPAL 27.3 DP CORPOICA M DP SINUANA M ORO BLANCO 0.5 NO INFORMATION 3.1 Subtotal 42.0 Total Also noteworthy was the approval in 2008 of the Bollgar ll with RR Flex for commercial seeding, which will be used in the 2008/2009 season. 4. Colombian currency performance (pesos). During the first half of 2008 the Colombian currency, the peso, continued to strengthen, a process that began in Nevertheless, the present world financial crisis and signs of economic slowdown have strengthened the dollar internationally and has resulted in a devaluation of the Colombian peso since July The strength of the peso not only has affected the competitivity of the sector in terms of dollar pricing, but along with the increased volatility of international prices as well as the high cost of logistical processes, has resulted in lessened
6 exports. After entering the Peruvian market in 2007 with 901 tons of high quality cotton exported, there were no exports in export activity will depend on the peso s performance as well as international cotton prices. Colombia: Peso/Dollar, January 2003 October 2008 COP/US$ 3,000 2, ,600 2,400 2,200 2,000 1,800 1,600 Source: Central Bank of Colombia 5. Highlights Noteworthy advances 2008 were: - Reinforcement of the fight against the cotton Picudo; more economic and technological resources were dedicated to this plague which causes the most economic harm to cotton crops, existing technical networks were reinforced and monitoring networks improved. The goal is to achieve low-prevalence zones, thus reducing costs and improving productivity. - Implementation of a generational shift program: this project, approved in 2007 with Ministry of National Education cofinancing, began in It includes the participation of the productive sector and educational and investigative entities and seeks to train 400 technicians and technological specialists in cotton-related activities, with the latest knowledge available.
7 - Increased investment in machinery: funds were made available for the acquisition of tractor, seeders and harvesters as well as for irrigation projects in the Caribbean coast region. 6. Colombian cotton quality. The quality of Colombian cotton continues to improve, based on HVI testing done on 100% of Colombian cotton bales. Please see below a chart of the average characteristics of the last two harvests: 2 Colombia: average fiber quality characteristics Length (inches) Micronaire Strength Uniformity index Trash Short fiber index Industrial Cotton Consumption. The Colombia textile industry consumed 92,675 tons of cotton in 2007, which will decline by 10% to 83,408 tons in 2008, according to Canalgodon forecasts. In % of this cotton will be supplied by Colombian cotton, with 80% of the remaining cotton imported from the United Status and to a lesser extent from Zimbabwe and Senegal. The decrease in the textile sector activity is related to a high level of textile contraband and to the Colombian peso revaluation which predominated during the first half of the year. Competition from Asia, with lower costs, has also affected the national industry, which depends in large part on exports. This
8 situation can be seen in the growth figures: while the Colombian economy grew by 4.1% in , the manufacturing industry only grew by 1.6%, and the textile industry activity fell by 8.1%. Despite the peso revaluation, the textile sector export activity continues and grew in value by 40% in the first half of 2007 compared to the first half of The principal export market is Venezuela, which accounted for 59.3% of exports between January and June of 2008, displacing the United States (with 15.2% of total exports) as the principal destination. During the first half of 2008 the second largest consumer of cotton (19.7% of domestic consumption) 5 in Colombia, Coltejer, sharply reduced consumption of cotton due to financial and administrative difficulties. In the second half of 2008 Coltejer was acquired by the Mexican group Kaltex, which has generated expectations of the company s reactivation. Finally, it is worth noting the arrival in Colombia of the Peruvian company Topy Top, maker of 100% cotton clothing and which exports 70% of total production, especially to North America. Its world-known clients include GAP, Abercrombie & Fitch, Champion and Zara.
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