Cotton group’s cure: counter slow growth with quality
June 13, 2007,
Washington -- As worldwide demand for cotton continues to outpace production, putting upward pressure on prices, the cost of home fashion’s most basic raw material is forecast to rise an average 3.6% this year and then jump up another 6.4% next year.
Consumption during the current cotton year is pegged at 26.1 million tons, almost a million tons more than the 25.3 million tons expected to be produced. And the divide grows even wider next year, to 1.7 million tons, with demand forecast at 26.8 million tons, running ahead of production at 25.1 million tons.
And in a surprising take on the near-term outlook, an international consortium of cotton producers is forecasting that the world textiles industry, their biggest customer, "may be moving into a period of slower growth," putting fresh pressure on Asian textile producers to build a stronger infrastructure, step up quality and develop a more straightforward business model for dealing with customers.
At a convention of cotton producers held this month in Bangladesh, the International Cotton Advisory Committee (ICAC) said that as the worldwide textiles business begins to slow, "in order to expand business, Asian textile industries need access to high quality cotton, including longer cotton with better color, and lower contamination. Cotton industries need to provide improved inspection procedures, better delivery and transparent business interactions."
Going forward, the cotton cartel said, "India and Uzbekistan are likely to remain reliable cotton suppliers to Asian markets” with new transport systems coming on line. The ICAC added, “The U.S. cotton industry will remain competitive through an emphasis on quality."