Where’s the Chinese equivalent of Dukes Wooters when you need him? No one mentioned the man generally credited with making Cotton Incorporated what it is when the American Cotton Producers and The Cotton Foundation met in New Orleans, but Wooters’ legacy clearly was on some of the speakers’ minds.
Woods Eastland, the National Cotton Council’s chairman, noted that worldwide sales of textile and apparel products have grown from the equivalent of 125 million 480-pound bales of cotton in 1990 to an estimated 220 million bales in 2005.
But cotton’s portion of the total consumption of cotton, wool and manmade fibers has not kept pace, declining from a 75 percent share of the world market (or 85 million bales) in 1990 to about 50 percent (or 110 million bales) today.
“The consumer is too often choosing polyester fabrics over cotton fabrics in the world market,” says Eastland, chairman and CEO of the Greenwood, Miss.-based Staplcotn cooperative. “Sometimes they don’t have a good source of cotton products, but the fact remains, cotton is losing market share in the world.”
Allen Terhaar, the NCC’s vice president for foreign operations, says declining market share is hurting cotton farmers everywhere. “If cotton had the same world market share in 2004 that it had in 1990, the world would have used an additional 26 million bales of cotton in 2004,” he said.
Those 26 million bales could have had an impact far beyond the world supply and demand numbers, according to Eastland.
“If cotton’s decline had only been half that — to 66 percent instead of 50 percent — I don’t think we would be facing a WTO Brazil case,” he said. “I don’t think we would be facing the question of cotton being singled out in the Doha Round or the adverse publicity in some of the news media.
“The increased demand would bring higher prices, and every cotton grower in the world would be better off. That’s why I think the biggest problem cotton has worldwide is how to build demand for our product.”
The rest of the world has a model of success to emulate — Cotton Incorporated and the Cotton Board, the organization that provides funding for CI, says Eastland.
“The only large, consumer market in which cotton’s share has increased is in the United States. In the rest of these markets, share has decreased. Most people believe there is less per capita cotton consumption, primarily in Asian markets, in 2005 than in 1990.”
Although Terhaar didn’t single out China in his remarks, China’s declining consumption of cotton within its borders clearly represents a major challenge for U.S. market promotion efforts.
“Cotton’s share of Chinese consumption has been going down,” he said. “It’s roughly the same as it was in the 1990s. A 1 percent shift from man-made fibers to cotton would mean an increase of 650,000 bales in Chinese cotton consumption.”
Cotton Council International, the overseas market promotion arm of the U.S. cotton industry, has been staging events in China to try to help reverse the decline in cotton’s share of fiber consumption.
Eastland, NCC President Mark Lange and CCI President Gary Taylor traveled to southern China earlier this year to participate in CCI and Cotton Incorporated “Cotton Days” event, which attracted 700 people.
The event, which featured showings by Benetton, Lee, Nautica and Tommy Hilfiger of their spring/summer collections with fabric manufactured by some of U.S. cotton’s best customers, generated an estimated $2.7 million in advertising value from pick-ups in newspapers, magazines, TV and the Internet.
“One of the biggest challenges we face is to keep customers focused on cotton when they go to the store,” said Terhaar. “Then, through whatever means possible, we try to get them to consummate the deal.”
Terhaar believes there are more opportunities for generic promotion of cotton in China. That’s where a Chinese equivalent of a Cotton Incorporated-type organization would be helpful.
But persuading China’s growing consumer class to break from their desire to have a more “modern,” i.e., synthetic fabric look will not be easy, not only in China, but in the rest of Asia, he notes. “Man-made fiber demand is growing faster than for cotton. Only in the United States does the trend differ, and we need to replicate that in other countries.”
The situation is not helped by the fact that Asian countries have added more man-made fiber manufacturing capacity in the last 10 years than existed in the entire region in 1990, he said.
Cotton Council International’s efforts are having an impact, however. Following a recent 10-day tour in the United States, a Pakistani company committed to buy $10 million of U.S. cotton annually and devote an entire mill to U.S. upland and Pima cotton.
A Cotton USA and Engineered Fiber Selection System Symposium in Belek Antalya, Turkey, led to sales of 204,000 bales of U.S. cotton valued at $55.4 million. The week prior to the EFS Symposium, U.S. merchants sold an additional 110,000 bales of U.S. cotton valued at $29.9 million.
The sales increased Turkish purchases of U.S. cotton to 2 million bales, valued at $543.4 million, and put Turkey on track to be the second largest importer of U.S. cotton behind China.
Cotton USA Sourcing Programs have also been held in Columbia, Costa Rica, Guatemala, the Andean countries in South America, Paris, Hong Kong, Tokyo and Germany.
But China remains a leading target for U.S. efforts to make cotton the “fabric of their lives.”
The Chinese textile industry is expected to consumer 41 million bales of cotton this year. “Of those, they might use 13 million bales for their domestic market,” Terhaar notes. “Our challenge is to get them to use more in their country.”