Report of a Conference Call between Members of the
Task Force on Competitive Challenges
April 24, 2013
8:00 AM Washington, DC Time
 
A. B. Joshi, Sebahattin Gazanfer, Kevin Latner, Andrew Macdonald, Malgorzata Zimniewska, Khawaja and M. Zubair participated in the call.
Members and observers who were not available: Bruna Angel, Andreas Engelhard, Peter Johnson, Mark Messura and
Andrei Guitchounts served as Secretariat.
 
Next Meeting:
The next conference call will be held on May 14, 2013 at the same time: 8:00 AM in Washington, DC.
 
Report of the Meeting
Discussion of issues:
Members of the Task Force adopted the minutes of the 3rd conference call of April 8.
 
Members reviewed a report of the Chair on the ICAC seminar held on April 18, 2013 on Meeting Cotton’s Competitive Challenges. The report was circulated among members. Among strategies proposed for the ICAC at the seminar were:
  • Raise awareness of the social and economic benefits of world cotton production;
  • Educate the public about the environmental impacts of cotton production;
  • Work with producer organizations to provide positive information about cotton to consumers,
            governments and NGOs.
  • Identify influential organizations in countries and work with those organizations to advocate for
            cotton.
  • Be a more vocal advocate for the cotton industry.
  • Educate government officials on the impacts of interventions on the cotton value chain.
  • Facilitate standardization of instrument testing of cotton;
 
Members reviewed Dr. Zimniewska’ report on technical benefits of cotton in comparison to viscose and polyester fibers. Major conclusions of the study indicate that cotton is considerably more abrasion and wear resistant compared with man-made viscose. It was also reported that cotton has a positive effect on human body compared with polyester. It was decided to use these findings on benefits of cotton more actively in promoting cotton against man made fibers and to share these studies with other cotton bodies for promotional purposes.
 
Members reviewed Bruna Angel’s presentation on economics of fiber competition. The report indicated that in China cotton prices are rising, while polyester has excessive capacity and declining prices. That makes it very hard for cotton to compete and cotton could continue to loose market share. The report provides an example of Lenzing that has addressed an issue of sustainability very successfully. Cotton should address the issue of sustainable production and should find a good message on it.
 
Members revisited the discussion of volatility and agreed that it was a significant problem.  There was some discussion about how much speculation promotes liquidity or causes excess volatility.  Research results apparently are inconclusive.  Key issues included of transparency in the implementation of government programs, constraints by some countries on investing in international markets and limited delivery points.  Members agreed that where regulatory oversight is appropriate, programs should be implemented transparently.  Members also discussed a world cotton contract, noted that the International Cotton Association has a task force responsible looking into such a vehicle and agreed that such a vehicle is within the purview of the private sector and, where regulated, should be regulated transparently.
                                   
Next Step:
Task Force members will contribute their suggestions for the outline and content of the report All members are invited to send their additional thoughts to Kevin Latner at klatner@cotton.org, and Andrei Guitchounts at Andrei@ICAC.org for compilation and distribution prior to the next conference call on May 14.
 
The conference call was adjourned at 9:00 AM Washington time.
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