Recent developments in cotton and textile industries in Argentina

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1 Fecha actualización International Cotton Advisory Committee 2017 Research Associate Program Risk Management in the Cotton Industry Washington DC, April 10 to Recent developments in cotton and textile industries in Argentina Maria Alejandra Simonella

2 My work place: INTA EEA Sáenz Peña. I m Agr. Specialist in Plant Protection. I work in Cotton IPM.

3 The cotton crop in Argentina. Currently situation. COTTON Production zones 9% IRRIGATED 91% DRY Location in the Argentine Republic The number of small farmers has declined. Farmers with less than 10 hectares contribute to 0.2% of the provincial sowing area, while those with more than 100 hectares contribute more than 90% of the same. Predominance of medium to large farmers in terms of surface and production levels. Source: Productive management of cotton: machines and implements for small cotton areas. Mario Mondino, Santiago de Chile, November 17, 2015 Ability to incorporate technology, diversify, temper risk (companies).

4 Sowing surface by farmers strata Source: Cotton Bulletin nº 7 - July SAGyP - Ministry of Agroindustry

5 Territorial distribution of Sowing and Cotton Ginning Sown Area. Averages of two periods. Zone Sown Area *000 Hectares. Average 2009/10 to 2013/14 % Sown Area *000 Hectares. Average 2011/12 to 2015/16 % Chaco Santiago del Estero Santa Fe Formosa Salta San Luis Otros Argentina Source: Ministry of Agro-Industries of Argentina.

6 Territorial distribution of the spinning mills and weaving plants The spinning and weaving plants are mainly located near the consumption centers (Buenos Aires) and in the provinces that implemented regimes of Industrial promotion. For this reason, its concentration is greater in the NOA region than in the NEA.

7 The textile industry in Argentina. Currently situation. In 2016 the textile industry was reduced by 25% compared to the same period of 2015, according to the Pro Tejer Foundation. The fall is mainly due to the loss of purchasing power, and consequently to a decrease in consumption, and to the opening of imports, which generated a 15% growth in the arrival of textile products from abroad.

8 The cotton crop in Argentina. Currently situation. Importance of the cotton value chain: The cotton value chain has a huge influence in the regional economies of Chaco, Santiago del Estero and Santa Fe, where the sector generates a large number of jobs: only spinning mills and ginning, employ more than 70,000 people. In 2015, 51 thousand tons of cotton fiber were exported for more than US $ 47 million. The National Quality Plan considers the cotton value chain as the central axis of the public and private sectors to define a strategy that allows it to grow and develop from the productive transformation.

9 The cotton crop in Argentina. Currently situation. The National Quality Plan is a program promoted by the Ministry of Production of the Nation that works with INTI to improve the quality of goods and services of domestic production. To develop a national network of public reference laboratories for the quality of cotton fiber. This network would allow traceability along the entire chain, from the field where cotton is produced to the production of clothing made from this raw material. In addition, this network of laboratories would allow to measure the quality of the cotton fiber in an objective way, according to international standards, improving the conditions of commercialization and export.

10 1975/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /16 The cotton crop in Argentina. Currently situation. 1,600,000 Sow area and fiber production 1975/76 to 2015/16 1,400,000 1,200,000 1,000, , , , ,000 0 Sow area Production

11 The cotton crop in Argentina. Currently situation. Main factors that contributed to the drop in production: Biotic and abiotic factors incident- Problems of excesses and water deficiencies - Deterioration of the soil resource - Management of phytosanitary problems: cotton boll weevil, herbicide resistant weeds, blue desease, others. Crop management - Changes in the system (harvesting and fiber contamination, adoption of technology, ginning sector, equipment necessary for the proper handling of mechanically harvested cotton, cleaning, humidity... others).

12 1969 / / / / / / / / / / / / / / / / / / / / / / / /2016 The cotton crop in Argentina. Currently situation. Cotton Production, total country (ton), annual 1,600,000 1,400,000 1,200,000 Boll weevil Misiones and Formosa GMO BG GMO RR B. weevil Chaco GMO BG/RR B. weevil Santiago 1,000,000 B. weevil Santa Fe 800, , , ,000 0 VARIETIES OF INTA

13 Quarantine pest present Currently, the pest situation includes: Red Zone- Low Quarantine Area (LQA). Yellow Zone- Pest Low Prevalence Area (PLPA). Green Zone- Pest Free Area (PFA) Anthonomus grandis Boheman the cotton boll weevil

14 Boll Weevil Chaco and Santa Fe Cotton Area 2004 to 2008 Lost area and average yield / hectare Boll Weevil Santiago del Estero Cotton Area / / / / / / / / / /2016 Rinde Average prom. yield (km/ha) (Kg/He) Sup. Lost perdida área (he) (ha) Loss estimates in: 380 US dollars/ton From 2006/2007 to 2015/2016: 220,000,000 US dollars From 2009/2010 to 2015/2016: 204,000,000 US dollars 0

15 The cotton crop in Argentina. Currently situation. Main factors that contributed to the drop in production: Production fluctuations in the last 20 years- Exports / imports - Volatility of markets - Difficulty in setting a reference price, others. Switch to more profitable crops such as soybeans, sunflower or corn. Stagnant yields. Low supply of varieties (GMOs).

16 Characteristics of Season 2015/16, estimates for 2016/17 The Cotton Season 2015/2016 ended with 390,000 hectares harvested, a production of 800,000 tons of raw cotton and 200,000 tons of fiber. Estimates for season 2016/ % decrease in spinning consumption, with a remaining at 130,000 / 135,000 tons. Production exported towards the end of October: 48,000 ton. Destination of 70% of exports: Asia. Imports of approximately 4,000 tons of fiber, all coming from Brazil. For the new sowing of cotton, from November 1, expectations are not the best.

17 Sectoral Policies Production Support Plan for Sustainable Development and Promotion of Cotton Production (Law ): its objective is to contribute to the cotton crop recovery as a social crop. Ministry of Agroindustry, since Support programs and technical assistance to small and medium farmers: theirs objective: promote the rural development and family farming. Sanitary Policy National Program for Prevention and Eradication of Cotton Boll Weevil: Monitoring, Eradication, Quarantine control,training and diffusion of the pest management. Technological Policies Technological agreement between INTA and the cotton Provinces in order to develop a genetically modified seed variety resistant to cotton boll weevil.

18 Technological Policies Sectoral Policies

19 Major Challenges Increase the competitiveness of the industry and improve cotton quality through the implementation of PROCALGODON Protocol at all stages of the production process: production, transport, ginning and production of fiber bales. Improve the integration of the different links in the cotton chain. Improve marketing and export conditions for our country. Build awareness in the stakeholders about the magnitude of the problem of boll weevil, in order to completely eradicate the pest.

20 CONCLUSIONS Although Argentina does not belong to the countries designated as "great producers and consumers of cotton worldwide", the economic and social importance of the activities generated by the cotton chain are fundamental for the development of the Argentine cotton provinces. FINALLY, IT IS ESSENTIAL TO MANAGE THE GENERATION OF INTEGRATED TECHNOLOGIES AND STRATEGIES TO IMPROVE THE SUSTAINABILITY OF THE COTTON SECTOR.

21 Thank you very much! INTA Chaco Formosa Regional Centre Saenz Peña Agricultural Experimental Station Route 95 km 1108 CP3700 Province of Chaco. Argentina. Phone (54) (54)