Cotton growers look to regain lost market share
Cotton Inc. CEO J. Berrye Worsham says cotton growers are working to regain market share
Cotton growers are hoping to regain market share after volatile prices over the past year led apparel manufacturers to switch to man-made fibres.
The spike in cotton prices caused the industry to lose a "bit of market share in the last six-to-eight months," J Berrye Worsham, the CEO of Cotton Inc told just-style. But now that cotton prices have fallen and are seeing more stablility, the industry body expects to see some recovery of those losses.
Largely, he says, because in the US, there's "still a strong preference from consumers for cotton".
Worsham described the "confluence of a number of events" that led to the rise in cotton prices, including the weak US dollar and poor crops in China and India -which meant the "market was looking for cotton, at a time when no one really had a lot to offer", creating a market "frenzy".
However, "one of the things that cures high prices in the commodities market, is high prices," said Worsham.
Factors that have brought down the price of cotton include more farmers planting cotton, so that globally, the industry is producing more than it is consuming. This also means the industry is working to rebuild inventories.
Cotton's reputation as a sustainable natural fibre has been tarnished in recent years by claims that it accounts for 25% of all agricultural pesticides in the US, as well as being a very water intensive crop.
But Worsham was quick to play down these claims, emphasising that it only accounts for 6.2% of global pesticide use, and that "active sustainability" has been embedded into all aspects of the supply chain over the last five-to-ten years.
Worsham highlights how the industry is working to become more sustainable through the use of things like satellite imagery to ensure that the right fields are getting the right inputs, and this is set to become even more targeted in the future.
He also noted the industry has gone from a farm strategy, to a field strategy and that in coming years it will become a "section" strategy, with growers only putting inputs on the parts of the fields that need them.
One of Cotton Inc's aims is to double the yield of cotton by 2050 in order to service the emerging middle class around the world. The group is working on a number of projects, including breeding programmes and biotechnology schemes, that will help the cotton plants reach their yield potential through attacks from insects, weeds and droughts.
"I think there's a lot of little things that add up to a much bigger one. It's a challenge, but that's one of the goals that has been set by some of the technology companies," said Worsham.
The industry is also working to remove the toxin gossypol from cotton in order to make it edible for humans. This has been an ongoing project for 20 years, but without the toxin, cotton is much more susceptible to insect attack. Studies are now focused on removing gossypol from the seed, but leaving it in the plant material.
Worsham said that there have been five field trials of this new crop at Texas A&M University. "Maybe in 10 years from now cotton will play a role in food as well," he added.
Speaking about the economic environment in the US, Worsham blamed a combination of low consumer confidence and overcapacity in retail as some of the factors for the sluggish performance the sector has seen over the last couple of years.
"There was a tremendous amount of store expansion that took place in the 1980s and 1990s, so we have too much capacity to sell. What happens when you have too much? You compete on price, so there's not a lot of profit in that system and some of that will have to be worked down," he emphasised.
However, Worsham is optimistic for the future growth and success of the cotton sector, saying that rising incomes in emerging markets are going to be a major driver. "The world is going to need more of everything, and cotton is just one of those things."
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