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Why US cotton can be the best choice for Bangladeshi spinners

At present, US cotton holds a 15% share in the Bangladesh market. It is predicted that in a few years, Bangladesh’s spinning industry will grow by 15% to 20%. Bangladeshi spinners buy cotton from various countries. This report has portrayed an overall scenario of the cotton spinners buying from the USA.

Cotton-Council-International-COTTON-USA-best-choice-Bangladeshi-spinners

In a recent dialogue with Textile Today below six cotton leaders discussed CCI’s global activities, reasons behind the high price of COTTON USA™, challenges and prospects in the Bangladesh cotton market and many more relevant issues.

William-R-Bettendorf-Cotton-Council-International
Figure 1: William R. Bettendorf, Regional Director, Supply Chain Marketing, South & Southeast Asia, Cotton Council International (CCI).

CCI’s current activities

Ali Arsalan: We have been very lucky with the CCI activities in Bangladesh. Back in March, we had a technical seminar with 130 guests and in October arranged another technical seminar with 170 guests. The COTTON USA™ has hosted a virtual cotton day seminar recently.

At the moment we are going ahead with our field services – which is part of COTTON USA™ solutions –for mills who are COTTON USA™ licensees and members of the U.S. Cotton Trust Protocol. It is a complimentary service from our team of consultants who has a combined experience of more than 200 years in the spinning industry.

Ali-Arsalan-Bangladesh-COTTON-USA
Figure 2: Ali Arsalan, Bangladesh Country Representative at COTTON USA™.

In the field service, our team visits mills to deal with any issues the spinning mills are facing i.e. efficiency or processing, etc. We want COTTON USA™ mill users to be more profitable.

In a nutshell, apart from the promotional and marketing activities, in the next, we are going to focus on one-to-one mill consults.

Besides, we will roll out the Mill Mastery® courses – A new cotton consultancy, created to take spinners’ business to the next level of success. For greater profitability, improved productivity and the latest techniques, look to COTTON USA SOLUTIONS™ – regarding that we have hosted a training session to train and educate the young generation of spinners on how to buy US cotton.

Moreover, we have a plan to arrange some more Mill Mastery® courses sessions on profitability and training models on how to process US cotton.  This is the COTTON USA™ roadmap for the next couple of months.

William R. Bettendorf: Cotton Council International (CCI) conducts multiple activities globally. I would say, our primary activity right now is our focus on U.S. Cotton Trust Protocol. This is the sustainability cotton program specifically for US cotton.

Additional programs include the COTTON USA SOLUTIONS™ technical servicing program. This is also focused on our key export markets of US cotton.

This week we have a team in Bangladesh, who are calling on mills to help provide those services. In every two years, we have an activity we call the COTTON USA™ sourcing summit. Typically, from Bangladesh, we have a very good delegation team coming to the US to attend the global conference.

Joerg-Bauersachs-Cotton-Council-International
Figure 3: Joerg Bauersachs, Head of CCI Technical Services.

This is great because the conference brings so many global experts from all over the world where they talk about their experience of common challenges.

Bangladesh cotton market scenario and CCI

Ali Arsalan: Regarding the Bangladesh cotton market, I have always had a keen interest in the cotton market. What are the import amount, in the 2021 calendar year – from January to September – so far, an average of 170000 tons of cotton are imported per month.

Although October witnessed a big drop in cotton imports, only importing 1.18 lac tons. It implies that mills are a little short of cotton – because in the spinning sector the consumption has not dropped, the demand is very good, the yarn price also continues to grow up every week. So, I think in the last few weeks, the rising prices of cotton have determined that.

COTTON Price

William R. Bettendorf: Price is always an important subject for spinners globally. As a nonprofit association, we do not buy or sell anything. But what we like to do is to create opportunities to bring the buyers and sellers together.

E-Hope-Brooks-Staplcotn
Figure 4: E. Hope Brooks, Director of Export Sales, Staplcotn.

For our key customers of COTTON USA™, we have also launched the COTTON USA SOLUTIONS™ program. One of the components of the program is the Mill Mastery® course, which is like an education module –one of the chapters of the module is ‘how to buy US cotton.’

As for the cotton price, well it is driven by the global cotton market what we cannot control. But what we can control is helping our customers understand the US cotton and understand the market. We like to educate our customers about the tools we have to buy COTTON USA™. One of the tools is hedging, though in recent days hedging is not very popular in Bangladesh.

Joe Van Boening: Globally the demand for US cotton is very good – especially for the Pima Cotton. But Bangladesh is not into Pima Cotton that much due to its higher price – as in Bangladesh a pound of Pima Cotton will cost $3.30. Pima Cotton’s price hiked due to massive drought in the USA. And the supply of Pima Cotton dropped around 50% in recent times.

The challenges and prospects in the Bangladesh cotton market

Wesley-Rent-Olam-cotton
Figure 5: Wesley Rentz, Senior Director, Southeast Cotton Operations, Olam cotton

Wesley Rentz: We had several meetings with Bangladeshi cotton stakeholders, and to me, we have identified two major challenges. One is the long lead-time for US cotton. And many challenging issues are hindering behind the scene – which we need to address collectively. The fumigation issue has been raised many times. Which is a unique requirement for US cotton.

The second challenge we face here, how the USA can provide sustainable/traceable cotton in the Bangladesh market? The CCI is ensuring with the U.S. Cotton Trust Protocol program. That is one of the reasons for us to be here to promote that.

E. Hope Brooks: The USA is the largest cotton exporter. While Bangladesh is one of the largest cotton importers. So, it is natural that the world’s largest exporter and importer’s relation needs to be nurtured.

The biggest challenge is the distance between these two countries. At the same time, Chattogram Port’s capacity/efficiency needs to be improved to handle the import and export in a better way.

Joe Van Boening: I see that there are a lot of prospects for high-end Pima Cotton. But the biggest problem we are facing are distance and logistics. In addition, there are some banking issues like opening an LC is hard. If these things are eased out, it will resolve some of the main challenges.

Lead time issue

William R. Bettendorf: As a trade association representative, CCI work with the govt. to facilitate programs to help the flow of US cotton from farms to the port and then to textile mills. Govt. knows very well that logistics is not operating properly. Besides, there is a lot of pressure on the govt. to help relieve the congestion on the ports, which will ultimately benefit Bangladesh, as spinners here will be benefited by getting their cotton faster.

Joe-Van-Boening-Jess-Smith-&-Sons-Cotton-LLC
Figure 6: Joe Van Boening, a Sales Coordinator in Jess Smith & Sons Cotton, LLC.

But if I am being honest, Bangladesh also needs to improve the infrastructure as the Chattogram Port congestion is a big problem. As of right now, the country does not have a deep-sea port causing a lot of delay as ships have to go to bigger ports like Singapore – then goods are offloaded into smaller vessels that carry back to Chattogram Port. So, if Bangladesh can create a deep-water port, then it will save a lot of time.

Concluding messages

Joerg Bauersachs: In my perspective, globally spinning mills face similar types of challenges – quality, productivity, achieving the waste level they want, etc. But I do not see Bangladeshi spinners are facing any unique issue.

To deal with these issues, we provide a service called 1:1 Mill Consults. This service comes under the umbrella of COTTON USA SOLUTIONS™. 1:1 Mill Consult brings one of our Mill Experts directly to the mill. Either virtually, or on-site, our experts will be in the mill for one-to-four-day, in-depth mill examination.

William R. Bettendorf: My closing message for the Bangladeshi spinners is that the US cotton industry wants to be your partner. We are bringing exclusive services to the Bangladeshi spinners. Especially the COTTON USA SOLUTIONS™ team, we have made 8 professionals available to the local industry to consult and troubleshoot with the mills. No other cotton-producing country does this. It is a pretty serious commitment, as maintaining such a team is quite expensive.

To avail this expert service, mills have to be a COTTON USA™ licensee and a member of the U.S. Cotton Trust Protocol. I encourage Bangladeshi spinners to take the advantage of these services.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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