Bruce Atherley The US cotton exporters have been trying to make a sizeable entry into Bangladesh textile market. There has been some progress in recent years, but not the way that wanted it to be. In an online interview with the Financial Express recently, Executive director of the Cotton Council International, Mr. Bruce Atherley, explained the global cotton market situation in the context of Covid-19 pandemic. Following are the excerpts:
Question (Q): Last time when some of you visited Bangladesh, you were optimistic about raising the US cotton's market share in Bangladesh to at least 33 per cent over a period of five years. Could you make any progress in that direction?
Answer (A): Bangladesh is an emerging market and continues to become a larger importer of U.S. cotton. U.S. cotton market share in Bangladesh has more than quadrupled over the last five years, going from about 3.5% in 2015 to 15% in 2019, including an approximate 3% increase in the last year. COTTON USA™ events in Bangladesh, such as the recent virtual Cotton Day, have brought together the Bangladeshi industry to get updates on U.S. cotton and learn how it can help boost business.
Q: The Covid-19 pandemic has hit the global trade hard. How is US cotton export affected?
A: The COVID-19 pandemic has caused unprecedented disruptions to the supply chains and markets for the U.S. and world cotton and textile industries.
The global outbreak resulted in disruptions in all U.S. cotton export markets, with forced closures for many factories and/or drastic reductions in orders and cancellations for others. In addition to the sharp drop in demand and resulting price pressure, each segment of the U.S. cotton industry has faced business disruptions as a result of efforts to contain the pandemic.
U.S. exports for the 2019/20 crop year were lower than pre-COVID projections resulting in a higher level of ending stocks. U.S. merchants were faced with weak demand and export cancellations as a result of the COVID-19 pandemic. The Phase I trade agreement with China was expected to increase exports of U.S. cotton in 2020. However, the timing and quantity of additional Chinese purchases is highly uncertain given the market disruptions created by the COVID-19 outbreak.
Q: If and when victory comes over Covid-19, how do you plan to recoup the US cotton market losses? Will there be any special focus on the Bangladesh market then?
A: The Bangladesh market will continue to be an important focus for COTTON USA. COTTON USA is committed to creating programs, networking opportunities and educational forums that benefit mills, manufacturers, brands and retailers. It's all a part of the premium value that U.S. cotton brings to the entire supply chain. Many of COTTON USA's offerings have also gone virtual, illustrating our dedication to evolving the resources that we provide to our global supply chain partners in support of their growing business needs and demands.
CCI has just launched COTTON USA SOLUTIONS™, the industry's first-of-its-kind technical consultancy program that helps mills and manufacturers achieve greater productivity, process efficiency and ultimately profit for their businesses. Offerings include a mix of partner-specific and standardized options, and will be available virtually, in addition to in-person. The program is launching with five unique, data-informed offerings:
1.Mill Studies - six studies, with more in development, based on controlled on-site testing by independent third party companies to identify best practices in spinning cotton;
Mills and manufacturers, including COTTON USA licensees, must qualify for the program. Upon qualification, licensees will have complimentary access, and non-licensees can access for a nominal fee.
Q: Last time while visiting Bangladesh, Cotton Council International officials and US Cotton exporters expressed their opposition to the fumigation procedure done at the Bangladesh ports. Has there been any change of mind among the Bangladesh officials on this issue?
A: There is ongoing discussion between both governments, and we are hopeful that the issue will be resolved.
Q: US cotton is expensive for a number of reasons. Have you done anything to make the item attractive, in terms of prices, to the Bangladeshi buyers?
A: Mills and manufacturers trust U.S. cotton because of its quality, sustainability, transparency, innovation and premium value. Every bale is tested, quality is guaranteed, and our cotton provides a better spinning consistency.
Ongoing COTTON USA technical servicing in Bangladesh to help mills understand how to fully utilize U.S. cotton in their mills has led to greater understanding and appreciation of the net value of U.S. cotton. A recent study at a fully integrated manufacturer in Bangladesh shows the superior performance of U.S. cotton compared to cotton from India and Uzbekistan. U.S. cotton outperformed the other cottons at every step of the process, turning an initial cost disadvantage into a cost advantage. According to the research, after knitting, dyeing and finishing, U.S. cotton was actually the least expensive alternative.
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