Global Competition Can Be Challenging

Tommy Horton
By Tommy Horton, Editor

It is no secret that U.S. cotton is competing in a global market today that is difficult to understand. In fact, it is downright confounding that so many factors can affect how and when a farmer’s cotton reaches the customer. This is a far cry from a decade ago when U.S. cotton producers’ best customers were the textile mills right here at home.

Back in those days, producers delivered about 11 million bales of cotton each year to this country’s mills. An additional six million bales went to the export market. You know what happened next. The textile mill sector shrank, and now more than two-thirds of U.S. cotton is ticketed for export. Domestic mills only consume about 3.8 million bales each year.

This country’s cotton industry now faces two major challenges – regaining demand that was lost to polyester and competing in a volatile global market. It certainly helps to understand U.S. cotton’s competitors. It also is crucial to support Cotton Council International’s efforts to increase U.S. cotton consumption in overseas markets.

When you read the Cotton’s Agenda column (written by Mark Lange) on page 6, you’ll gain a better understanding of how CCI’s Sourcing Summit addresses this problem of demand building. At its recent event in November, more than 420 major global sourcing companies attended. It gave U.S. cotton exporters an excellent opportunity to network with important customers and re-emphasize U.S. cotton’s quality and reliability. In this issue, we also thought it would be beneficial to take a look at some of the other cotton-producing countries in the world. Beginning on page 8, you’ll find six reports from INTL FCStone Inc., in Nashville, Tenn. Also included is a summary of how the U.S. cotton crop looks for 2014-15.

Sometimes, it takes intense study of the global market to understand what the U.S. cotton farmer faces each year. It is a complicated web of inter-connected issues that often perplex the top analysts in the country. We know that China’s policies – especially its large reserve of cotton stocks – make it difficult to predict what will happen next. And let’s don’t forget about cotton’s current low price, and how that affects the environ- ment for all parties.

Our friends at INTL FCStone Inc. have given us a clear snapshot of what is happening in China, Australia, India, Brazil, Uzbekistan, as well as the United States. One fact is obvious. Now is the time for U.S. cotton to be bold as it works through these challenges. It won’t be easy, but we’re confident that the industry can succeed in its mission.


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