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NCC chairman challenges other countries to promote cotton

The chairman of the National Cotton Council is urging other cotton-producing countries to focus on building demand for their fiber rather than “fighting each other” for a dwindling share of the market.

Woods Eastland, the Council chairman and CEO of the Greenwood, Miss.-based Staplcotn cooperative, challenged representatives of countries attending an international cotton meeting in Liverpool, England, Monday to grow global demand by 5 million bales per year for the next five years.

Eastland told attendees of the International Cotton Advisory Committee’s 64th Plenary Meeting in Liverpool that the only reason that goal of 5 million bales per year seems unachievable is lack of confidence by those countries in their “ability to apply the right tools and the right financing to the task.

“Maybe we are just lacking imagination and the willingness to work together toward a mutually worthwhile goal,” he said. “What we are now doing is fighting each other desperately for market share because our production potential is growing much more rapidly than the demand for our fiber.”

The ICAC, an organization of 44 cotton producing and consuming countries headquartered in Washington, D.C., estimates that without the promotion efforts of Cotton Incorporated and Cotton Council International, the NCC’s export promotion arm, demand for cotton would be 12 million bales less than it is in 2005.

That’s about one-tenth of the anticipated cotton consumption by the world’s textile mills in the 2005/06 marketing year. Eastland, who is also a cotton producer, said the U.S. cotton industry is convinced that the ICAC is correct in its assessment of the impact of cotton promotions thus far.

On the other hand, he noted, USDA economists have said that “had cotton's global market share of fiber consumption held onto its 1990 level, then the world would be consuming an additional 26 million bales of cotton annually today.”

“In other words, if cotton had simply held its own in the rising world demand for fiber, world demand for cotton would be 20 percent greater than the current level – and this is on top of the 10 percent additional that the U.S. industry built through its national consumer promotion programs,” he said.

Instead of this added demand, the global cotton industry has a cotton demand crisis that can be found in the failure of world cotton prices to climb much above 50 cents per pound in recent months despite record levels of consumption.

“While the United States has seen cotton’s share of fiber consumption for apparel and home furnishings increase steadily since Cotton Incorporated’s campaign gained traction in the 1970s, every other country has seen a stagnant or declining market share,” said Eastland.

As an example of the promotion efforts needed today, Eastland pointed to the joint Cotton Council International/Cotton Incorporated experiment – the Cotton Gold Alliance – which is being conducted in India. The generic promotion program, which used the Seal of Cotton to create a preference for quality products that are identified as 100 percent cotton, has been very successful.

The Cotton Gold Alliance promotion has been a factor, he said, in not only a rise in consumer preference for products that bear the Seal of Cotton, but a reversal in that country of a decline in cotton consumption versus synthetics. In terms of bales, this $2 per bale program has meant about a 300,000-bale increase in offtake – an excellent return on investment, he noted.

Eastland said the Indian cotton industry or their government would do well to put local funding in the CGA program, now that its three-year trial period will be over at year's end.

“If the CGA or a similar program does not continue, it will be a major opportunity lost for the Indian cotton economy and the global cotton economy,” Eastland said.

“We are never going to make a serious dent into cotton's falling market share in the global fiber marketplace without a much more well-funded and well-orchestrated effort,” he said. “I do want to impress on you that the U.S. growers and the US. industry are willing to work with the global cotton community to find solutions and to get results.

“I ask you to work with organizations such as the International Forum for Promotion, Cotton Council International and Cotton Incorporated, to find ways to enhance our mutual success through demand creation.”

(The IFCP is a forum of cotton institutions encouraging increased consumer demand for cotton, specifically by facilitating national market development programs, organized by associations and commercial organizations in individual countries, and funded from domestic resources.)

National Cotton Council officials first began talking about the difference between current demand and what demand could be if the rest of the world was promoting cotton at the joint meeting of the American Cotton Producers and The Cotton Foundation in New Orleans in August.

Eastland and Mark Lange, the NCC’s president and CEO, told cotton producer and industry representatives that the world cotton market would be greatly enhanced if other countries were boosting demand for cotton.

“If cotton had the same percentage of market share today that it had in 1990, we wouldn’t have these other countries complaining about the U.S. cotton program because prices would be 15 to 20 cents per pound higher than they are now,” said Lange.


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