Global executives explore factors affecting cotton sector

 

A candid presentation by Dr. John Cheh, vice chairman and CEO of Esquel Group, a leading Chinese textile company, conjectured that the origins of the cotton price disruptions began with the end of quotas ten years ago, and not with the run-up in pricing of two years ago. Cheh stated further that other distortions, including those caused by China’s cotton reserve policy, continue to complicate stable pricing. 

Cotton Council International (CCI) and Cotton Incorporated, in cooperation with USDA, jointly presented the seventh biennial Sourcing USA Summit in #

 

Rounding out the economic perspectives was Ron Insana, senior analyst for CNBC and a financial expert. Insana provided an optimistic outlook for the U.S. and global economies.

 

The industry, however, is still nursing the hangover of the run-up, most notably in the area of fiber substitutions made to help the downstream end of the chain maintain margins when cotton prices were high, and the difficulties of some companies to honor cotton contracts. 

 

Addressing the former concern, Cotton Incorporated president and CEO J. Berrye Worsham urged attendees to stick with cotton, citing currently price stabilization and additional cost-savings that could be attained through efficiency opportunities in the chain’s manufacturing segments. Worsham shared top line results conducted by his company that concluded mills and weavers could achieve a 6 to 15 percent savings potential using current machinery and existing technologies. 

 

During a panel discussion, Antonio Esteve, representing the International Cotton Association, explained how his organization is exploring disciplinary options to address contract sanctity issues, including downstream contracting.

 

Chris Callieri, principal for the consumer and retail practice of A.T. Kearney; and Marshal Cohen, chief industry analyst for the NPD Group, Inc., each addressed consumer-related opportunities for cotton in separate presentations. Callieri identified consumer markets on the rise, including Peru, Mongolia and the Mid-East, in addition to the BRIC countries: Brazil, Russia, India and China. Callieri also suggested that there were immediate and significant opportunities for collaboration and cooperation across the textile supply chain.