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December 1 , 2006
An already healthy cotton trade between the United States and China could become even healthier with an agreement signed between industry groups representing the two countries.
The National Cotton Council of America (NCC) and the China Cotton Association (CCA) signed a "Memorandum of Understanding" Nov. 3 that promises cooperation between the countries' cotton industries.
"This memorandum signals a spirit of cooperation and good will," NCC Chairman Allen Helms said. "We look forward to a successful future of mutually beneficial trade and increased cooperation among the U.S. and Chinese cotton industries."
As the dominant factor in the global cotton and textile markets, China is the world's largest cotton importer, largest raw cotton consumer (mill level) and the largest cotton producer. After recently being admitted to the World Trade Organization (WTO), China is rapidly merging into the world economy.
"Cotton trade with China is very healthy today as the United States exported 8.6 million bales or about 36 percent of its crop to China in the past 12 months," said Helms. "This MOU is significant for the U.S. cotton industry as it seeks to build not only on that current momentum, but on its long-time relationship with China."
Helms said working through the NCC, the U.S. cotton industry has made substantial strides in fortifying its infrastructure to accommodate the current extraordinary volume of U.S. raw cotton export trade.
"The industry also has renewed its commitment to protect and enhance U.S. cotton's reputation for producing high quality cotton, delivering it in a timely manner and honoring contracts," he said. "We must follow through on that commitment to remain competitive in the Chinese and other global markets."
Joining Helms at the MOU signing was Cotton Council International (CCI) Chairman Gary Taylor, a Memphis, Tenn., merchant. They were joined by staffers from NCC and from NCC's export promotion arm, CCI. CCA Secretary General Madam Gao Fang, who signed for China, was accompanied on her trip by Madam Li Lin, CCA's director of Public Affairs.
Helms said Cotton Council International will continue to play a key role in expanding export demand for U.S. cotton in the coming year, including even greater activity in China than in 2006.
Among CCI's major endeavors in China this past year were:
•Established a CCI office in Shanghai.
•Launched, with help from U.S. exporters, the China Cotton Schools, which helped representatives from 145 Chinese cotton importing companies get a better grasp of the international cotton market's complexities.
•Teamed up with Cotton Incorporated to conduct "Cotton—Beyond Your Imagination," a major promotion initiative targeting consumers in China's major urban areas.
•Hosted, along with Cotton Incorporated, the 10th annual Cotton Days, which highlighted the inherent value of cotton through COTTON USA consumer events in China and other key Asian markets.
In addition, Helms led a high level U.S. cotton industry delegation to China in October as part of the China Leadership Exchange Program established by the NCC along with the CCA. The objective of that cross-country tour was to familiarize the U.S. delegation with the market demands and China's views by experiencing that country's development firsthand—from farm to mill.
"While we were there, the NCC and CCA agreed to have further industry leadership exchanges and dialogue on future issues," Helms said.
He said one of those issues is the global threat from synthetic fibers.
"Man-made fibers still represent the greatest challenge to cotton's profitability worldwide," Helms said, "and enhanced, basic consumer preference for cotton products in developing economies, such as China, represents the largest opportunity for demand growth."
