New Year’s Restitution

By Anna Mullins|February 3, 2009

As 2008 comes to a close, many in the international cotton market are shaking their heads at what has been a tumultuous and trying year. But only so much time can be spent bemoaning the losses and reliving the difficulties of a single season; now is a time to look forward to new strategies and seek the opportunities that always arise from a down market.

When asked why growers should choose to plant cotton in 2009, U.S merchant Ernie Schroeder very simply said, “Because no one else is.” The editorial staff at Cotton International found this intriguing as a straightforward, yet vitally important, truth. “There were forecasts for lower ending stocks in each of the last few previous seasons, only to see record crops, found bales and reduced demand keep stocks unchanged worldwide. Now, it is clear that in 2009 world acreage will be sharply lower,” Schroeder says.

The point is, looking on to 2009, prices will be forced to respond to this decline in supply. While it is easy to linger in the disappoints and turmoil of 2008, there are characteristics of the current situation that promise opportunity in the coming season. In this issue, you will find information about the sustainability of cotton, a continuing positive reality of our product. Sustainability is going to be a lasting trend in the apparel industry; this is not a transient fad. New innovations are being developed around the world to make growing cotton more efficient, more sustainable and more profitable.

This month’s report from China reveals prospects for the global market, as well. While demand from the U.S. and western Europe has been in decline, demand for fiber in quickly developing countries will remain strong. Increased urbanization and a booming middle class in world giants such as India and China will undoubtedly mean substantial increase in cotton demand once the global economies go through a consumer-confidence correction.

The future is also looking continually brighter for those seeking more security in trading contracts, as associations in nations across the world are developing standardized rules to assure contract sanctity. As merchant Damir Makhumunov reports on page 16, the volatility and uncertainty that marked the last year should result in traders and participating organizations being more willing to compromise and come to innovative solutions to revealed problems.