is part of the Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

  • American Agriculturist
  • Beef Producer
  • Corn and Soybean Digest
  • Dakota Farmer
  • Delta Farm Press
  • Farm Futures
  • Farm Industry news
  • Indiana Prairie Farmer
  • Kansas Farmer
  • Michigan Farmer
  • Missouri Ruralist
  • Nebraska Farmer
  • Ohio Farmer
  • Prairie Farmer
  • Southeast Farm Press
  • Southwest Farm Press
  • The Farmer
  • Wallaces Farmer
  • Western Farm Press
  • Western Farmer Stockman
  • Wisconsin Agriculturist
Western Farmer Stockman

Trade favors could hurt U.S. cotton

Cooperation with the United States in rooting terrorists out of neighboring Afghanistan could give Pakistan a bigger chunk of the U.S. textile market.

“We are concerned about trade favors (the U.S. government) might grant Pakistan,” William B. Dunavant III, told participants in a recent west Texas cotton marketing and flow meeting, sponsored by the Texas Cotton Shippers Association (TCSA) in Lubbock.

Dunavant, president of Dunavant Enterprises, Inc., in Memphis, and first vice president of the American Cotton Shippers Association (ACSA), said Pakistan already is the No. 1 producer of cheap textiles. Increasing the amount of textiles they can export into the country will limit how much U.S. cotton domestic mills will buy in an already shrinking market.

Dunavant said Uzbekistan, “one of the fastest growing textile markets in the world,” also may get favors for cooperation but will likely prefer military help.

Dunavant said the cotton industry faces other challenges.

“We have a 9 million bale carryover in the United States,” he said. “That's 53 percent stock-to-usage ratio, the highest since 1985. The ratio has averaged 27 percent for the past 16 years and could rise to near 60 percent by August 2002 if domestic consumption continues to fall.”

He said a meeting of 600 textile representatives in Liverpool recently “was extremely bearish,” and voiced concern about subsidies in the United States.

One of the biggest concerns among cotton shippers, he said, is default from mills.

“A drop from 60 cents a pound to 30 cents means customers are beginning to waver,” he said.

Default concerns, he said, is something “shippers let happen to themselves,” by not enforcing their own rules. “Shippers have to show unity and refuse to sell to buyers on the default list.

“Our worst enemy is that the default penalty has no teeth. We have no real means of punishing a shipper for selling to mills on the default list.”

Dunavant said domestic market woes continue. “Banks are now beginning to question domestic mills' receivables in regard to credibility as collateral,” he said. “Banks are nervous about the stability of the domestic textile market.”

Dunavant said a potential bright spot for U.S. cotton is the overseas market.

“The USDA estimates exports at 9 million bales,” he said. “That would account for 33 percent of the world's exports; 26 percent is a traditional share. Those are lofty numbers. but we can achieve them. Cotton with quality will export,”

He said India is an increasingly important customer, upping imports from 300,000 bales last year to 650,000 from the 2001 crop.

“India likes U.S. cotton,” Dunavant said. “They like the quality and the information they get from high volume instrumentation (HVI).”

He said India's crop yield and quality will be down. “They need American cotton.”

rsmith@primediabusiness.com

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish