Taking a Stand against Dwindling Morality
February 9, 2011 The past 12 months have seen a sharp reduction in the estimates for the size of the 2009/10 harvest, together with an increase in consumption of over 1.5 million tonnes. The total stock carried over has fallen to around 10 million tonnes, the lowest level in 14 years.
As far as the 2010/11 harvest is concerned, the limitation or even continued prohibition of Indian cotton exports, news of the floods in Pakistan, the sharp revision downward of certain East African harvests, and worries relating to the Chinese harvest are sustaining a strong upward trend. The Cotlook Index rose from $0.65 per pound on September 23rd, 2009 to $1.10 per pound on September 23rd, 2010, a 70 percent increase. Over the same period, the price of spun yarns rose by 50 percent.
The broad trends we are observing in world agriculture–improving living standards for growing populations, increased meat consumption and the expansion of bio fuels–lead me to believe that agricultural products may be emerging from decades of chronic overproduction. Under these circumstances, it would seem clear that Sub-Saharan Africa, with its arable land and heavy rainfall, will remain a favored area for cotton growing.
An industry under duress
One merely has to read the list of defaulting operators to realize that the general level of morality in the cotton trade is tending downward, unless it is the increasingly volatile state of the market that is putting certain organizations in a position where they are unable to fulfill their commitments. These days, one of the most serious problems affecting the cotton trade is the failure to implement arbitration rulings. We must improve this situation, and AFCOT will play its part in this process.
AFCOT is not an arbitration body but it has produced for its members a guide to arbitration, setting out the steps to be taken should they become involved in such proceedings. With regard to the issue of fibre quality, AFCOT intervenes by producing quality estimates and updating price differentials to take account of developments in the market. The AFCOT website provides all of the information gathered by the organization on a continual basis, and so enables users to gain an up-to-date overview of the world cotton situation. One of AFCOT’s main objectives is to play its part in promoting good commercial practices. Its contribution entails actively participating at the main meetings of the world’s cotton associations.
Finally, for historical reasons, AFCOT has close connections with the French-speaking world’s producers, and uses every opportunity it has to promote the cotton produced in this region–and above all to defend its producers and their special qualities.
I hope this brief and incomplete account of the tasks taken on by AFCOT will reveal that, even as a 120-year-old, the venerable lady is still young at heart, open and in tune with our constantly changing world.
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