Interview - Mr Nick Earlam , Chairman, Plexus Cotton Ltd
fibre2fashion:
You are right. In fact, acreages figures are going down day by day everywhere. Can we request you some supportive stats on this to have exact info?
Mr Nick Earlam
ICAC have stats that show global base acreage for cotton has declined by about 3 percent on account of price and more profitable crops. However if prices stay where they are or increase further it is our strong belief that this acreage can be regained and the new seed varieties will also help yield increases. There is an old saying that low prices cure low prices and high prices cure high prices. We have been in a low price environment for a long time relative to other crops and I sense this might be changing in the short term.
fibre2fashion:
Well that definitely would sound music to the ears of industry world over!
So, how do you foresee global market of conventional cotton to organic cotton in years to come?
Mr Nick Earlam
If it is related to income I don’t really understand how organic cotton can increase if farmers achieve the yields they should be achieving with conventionally grown cotton. There is the potential for conventionally grown cotton to out yield organic cotton by a factor sometimes as much as six times so even a 40 percent increase in price for organic cotton does not cover this differential.
The only place where organic cotton works properly is in those areas where yields are so low on conventional cotton that organic cotton becomes an alternative and in time this situation should change.
I do however see any cotton grown in a better sustainable and environmental manner increasing its market share going forward.
fibre2fashion:
And, how do you visualize prospects of sourcing of cotton from emerging countries? Please help us understand it in terms of percent constituted?
Mr Nick Earlam
I think that there is a big potential with properly provided genetically modified seed of Pakistan substantially increasing its crop one day. I also see a lot of prospects on increasing production in certain parts of Africa if we can get it right on yields and Brazil should have a large part to play. The biggest players in terms of both production and consumption of raw cotton will be China and India and in both countries I see it as a matter of National security to ensure sufficient enough access to raw cotton and man made fibre. These two countries alone consume more than 60 percent of the world’s consumption of cotton and produce more than 50 percent of the world’s production.
fibre2fashion:
Interesting! So geographically, excluding China, India & US, which countries you find have potential to queue up as a major cotton exporter?
Mr Nick Earlam
Uzbekistan, Australia, African continent, Brazil
fibre2fashion:
And lastly, we would also request you to share some trends forecast for the market in near future.
Mr Nick Earlam
I don’t believe that cotton will ever go out of style – at least not in my lifetime but as consumption increases as a result of population growth cottons relative share of the fibre market will slowly decline in relation to overall fibre consumption as food security will eventually take precedence over what farmers choose to plant on their acreage.
fibre2fashion:
Well, that was very informative and fabulous talk, Mr Earlam! We are grateful for your time and opportunity.
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