The Challenge: Building Greater Global Cotton Demand
In an address at the International Cotton Advisory Committee’s 64th Plenary Meeting in Liverpool, NCC Chairman Woods Eastland challenged the world’s cotton-producing countries to grow global demand for the fiber by five million bales per year for the next five years.
September 26, 2005
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Marjory Walker
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LIVERPOOL, ENGLAND - National Cotton Council Chairman Woods Eastland today challenged the world’s cotton-producing countries to grow global demand for the fiber by five million bales per year for the next five years.
He told attendees at the 64th International Cotton Advisory Committee’s (ICAC) 64th Plenary Meeting here that the only reason that goal seems unachievable is lack of confidence by those countries’ in their “ability to apply the right tools and the right financing to the task. Or, maybe we are just lacking imagination and the willingness to work together toward a mutually worthwhile goal. 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.”
Eastland, who is a cotton producer and chief executive officer of Staplcotn Cooperative Association in Greenwood, MS, said the U.S. cotton industry is convinced that the ICAC is correct in its assessment of the impact of cotton promotions thus far. The ICAC estimated that had it not been for promotion over time, such as that of Cotton Incorporated and the NCC’s export promotion arm, Cotton Council International (CCI), the world of cotton in 2005 would be lacking around 12 million bales of demand – or roughly one tenth of the total demand for cotton on an annual basis. However, he noted that according to USDA, “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.
Eastland said that instead of this added demand, the global cotton industry has a cotton demand crisis. 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.”
As an example of the promotion efforts needed today, Eastland pointed to the joint CCI /Cotton Incorporated experiment - the Cotton Gold Alliance (CGA) - 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 CGA 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 hope is that the Indian cotton industry or their government will 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.
Regarding the global cotton promotion effort, 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. I do want to impress on you that the U.S. growers and the U.S. 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 (IFCP), 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. Currently made up of 17 member organizations from 13 countries, the IFCP also serves as a clearinghouse for the exchange of proven ideas and strategies to be implemented by national organizations, and by facilitating the establishment and expansion of national demand enhancement efforts.Related News
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