The Hindu Business Line : Global cotton body moots uniform trade rules

THE International Cotton Advisory Committee (ICAC) has affirmed that the world cotton trading system could function more efficiently with standardised quality evaluation systems and trade rules. It has taken note of the concerns of developing countries about the cost of testing instruments and the need to implement the testing systems gradually.

Officials in the Textile Ministry, who took part in the ICAC's annual meeting held at Liverpool, UK, during September 25-29, told Business Line that at one of the open sessions, Mr Jan Wellmann, Executive Director of the Breman Cotton Exchange, reported that there were currently seven cotton associations in Europe with individual trading regulations based on national laws.

As such, he said, global cotton trade would be eased by a worldwide standardised contract, while additional contract-compatible rules must be developed for instrument classing. Representatives from 45 Governments, including India, and eight international organisations participated in the meeting.

The sources said at the ICAC meeting, the Committee received a report from its Task Force on Commercial Standardisation of Instrument Testing of Cotton (CSITC). The Task Force reported that it was fostering a system of evaluating the performance of cotton testing centres around the world through CSITC Round Trials. The Committee directed the CSITC to consider ways to reduce costs. It also encouraged the universal adoption of a common set of trade rules and contract terms that reflect the customs and usage of the international trade in cotton. This would benefit both buyers and sellers by promoting a sound cotton economy through efficiency in trade and equitable resolution of contract disputes.

In one of the open sessions, the President of Staplcotn and Chairman of the National Cotton Council of the US, Mr Woods Eastland, himself a cotton grower, said supporting the promotion of cotton was no longer an option but a vital necessity. Buffeted by the sustained campaign, between the 1950s and 1970s, by the synthetic segment that captured the imagination of consumers in the US with polyester and nylon advertised as fibres of the modern space age, US growers funded consumer promotion of cotton and the result was the creation of Cotton Incorporated. This led to a reversal of the declining market share and there was an additional 12 million bales of annual cotton demand.

Mr Eastland also mentioned the US programme in conjunction with the Indian cotton industry, called the Cotton Gold Alliance (CGA), a programme that is in the final months of a three-year pact. The CGA programme, in its brief span, had already showed a distinct increase in the consumption of cotton per capita in India, representing three lakh bales a year.

It is against this success of the promotion campaign that Mr Eastland appealed to countries and cotton-related organisations to join the International Forum for Cotton Promotion (IFCP), so that the goal to find 26 million bales of lost cotton demand was reached by 2010.

At the ICAC meeting, representatives of IFCP reviewed their work and a new programme christened CottonSponsor that enables the private sector to bolster IFCP was introduced.

At the first plenary, Mr Sudripta Roy, Joint Secretary, Ministry of Textiles, and leader of the Indian delegation, highlighted the success of India in achieving production, productivity and quality of cotton with the joint efforts of farmers, research institutes, private sector participation, state governments and the Government of India.

The ICAC Secretariat estimates that world cotton production will reach 25 million tonnes in 2005-06, 5 per cent less than last season but still the second highest on record. Demand is likely to increase by 3 per cent to 24 million tonnes and as a result, world trade in cotton is likely to rise to a record of 8 million tonnes. World carryover stocks are projected to climb to 11 million tonnes at the end of 2005-06, the highest since 1985-86. The average cotton price is likely to rise in 2005-06 because of the increases in consumption and trade.

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