Global Summit Shows The Way Forward
August 22, 2013 When a process has been followed faithfully for hundreds of years and been successful on a consistent basis, it’s very difficult to move away from it.
But nothing lasts forever, and when the rules of the game change, the players must change along with them. From the keynote speech through the final networking session, that message was reinforced at the 2013 Cotton International Global Summit, which was held in Singapore from 20-22 March.
The opening session proved, in no uncertain terms, that cotton faces some very serious threats, and the presenter finished by calling on cotton’s leaders to step forward and accept the challenge of leading the industry through this period of change.
Two days later, the Summit came to a close with a session in which three experts from cotton’s supporting industries shared their thoughts and insights on ways the industry can improve.
In short, the Global Summit served as a kind of roadmap for the way forward: It began with a stark assessment of the challenges our industry faces today, and ended with professionals from different links of the supply chain working together to overcome them.
Around the World in 72 Hours
The Keynote Presentation was delivered by Terry Townsend, executive director of the International Cotton Advisory Committee, and it was so compelling that two pages of this issue were dedicated to it (see pgs. 22-23). Townsend will also be the featured speaker in Cotton International’s first-ever live Webinar, which is scheduled for 27 May, at 7:00 a.m., U.S. Eastern Daylight Time (GMT -4 hours).
Before the four Plenary Sessions began, Xi Jin of the China National Cotton Information Center (CNCIC) delivered a China Market Overview – a highly anticipated event, especially since China shifted much of its purchasing from raw cotton to cotton yarn. While Jin said there were rumors that Chinese officials might eventually impose a tariff on yarn imports (which are currently duty-free, unlike raw cotton), they are only rumors. He added that China will continue to emphasize yarn imports regardless to help offset rising production costs.
In the first Plenary Session, Steven Chen of Tah Tong textile and Madam Zhu Beina of the China Cotton Textile Association shared their insights on the Critical Southeast Asia Market. They advised keeping an eye on several of the region’s rapidly growing markets (Indonesia, Vietnam, Cambodia and Myanmar in particular) and pointed out that China is struggling a bit with overcapacity in its textile industry, largely as a result of rapid development after it joined the World Trade Organization a decade ago.
For cotton to reverse the slide it’s been going through in recent years, it will need to improve in consumers’ eyes. The need for Strategies to Improve Cotton’s Impact and Image was the topic of the second Plenary Session, which featured Allan Williams of the Cotton Research and Development Corporation; Leon Picon of Orta Anadolu; and Kater Hake of Cotton Incorporated. The takeaways from the session included the need to increase the available supply of Better Cotton Initiative fiber to meet growing demand, as well as the need to reassure consumers that cotton is produced in a responsible and environmentally conscious way – and to provide that reassurance in a science-based format that people trust.
The final day of the Summit began with a session discussing Shifts in Major Markets, particularly Brazil (Adrian Moguel y Anza, CEO of Libero), Australia (Cliff White, general manager of Omnicotton Australia) and Africa (Rajeev Arora, executive director of the Africa Cotton and Textile Industries Federation).
Due to a much smaller crop this year, there is likely to be fierce competition between the domestic and export markets in Brazil, with concerns about exporting too much and leaving domestic mills without adequate stocks. The opposite is true in Australia, which consumes no cotton domestically. But its exports should remain strong because the quality of recent crops has been high, and yields are rising, with 4.5 to 5 bales per acre as the norm. Finally, the discussion of Africa focused on its untapped potential (it produces only 5% of global cotton production), including details of ACTIF’s “Origin Africa” program.
The final session, United for a Better Trade, focused on several ancillary industries that are crucial to cotton’s success: controlling (Peter Wakefield, managing director, Wakefield Inspection Services), the cotton yarn trade (Prem Malik, deputy chairman, Confederation of the Indian Textile Industry), and risk management (Syed Abdul Azeez, senior vice president, Olam International). One major takeaway from the controlling discussion is that the timelines for inspection services to be performed are specifically outlined within the rules of the International Cotton Association, and that failure to adhere to those timelines can cause costly disruptions to the trade.
Meanwhile, although many attendees might have been aware that there was growth in the yarn trade, few realized it was as dramatic as it was, with the top 10 cotton yarn exporters achieving a 23% increase during in the 2011/12 marketing year. Finally, attendees were advised to reevaluate their risk management strategies. Too many only take financial considerations into account, without considering how other, non-financial risks from all parts of the supply chain can impact a business.
Throughout the three-day event, cotton and textile professionals networked, shared ideas and conducted business within the stunning environment provided by the Marina Bay Sands Hotel & Casino. Cotton International is already in the planning stages for the 2014 Global Summit; to make suggestions about its location, session topics or featured speakers, please contact Mike McCue, program chair, at mmccue@meistermedia.com.
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