COTTON'S steady price rise continues to gain momentum, and for a while now cotton has dominated a variety of media outlets – for there are few whose lives aren’t shaped by this staple fibre in some way or another.
Last week, Rural Press’ sheep and wool writer Terry Sim examined wool to cotton price ratios and what the fortunes of one raw fibre meant for the other. Elsewhere Bloomberg warned that global demand from textile mills would continue to outpace supplies.
But you’re just as likely to read about cotton’s price spike in a women’s magazine examining affordable children’s clothing, or in a retailer’s forecast for hard times ahead as the expense of cotton pressures the escalating price of clothing and manchester.
Since early last year, cotton prices have accelerated from the realms of US55-80 cents a pound, to hit an all-time high of $US2.127 a pound on ICE Futures US in New York two days ago. As we enter an era of unprecedented cotton prices, will it continue to be the world’s fibre of choice?
It was not always the case. In 1750, the British textile industry was using about 60 million tonnes of raw wool compared with just 2.5 million tonnes of raw cotton a year. But in a mere century, the tables were well and truly turned, in favour of 790 million tonnes of raw cotton versus 215 million tonnes of raw wool by 1850. Today, it also competes with synthetic and cellulosic fibres to claim its 38 per cent market share, but it is because of its natural qualities that cotton will always have a particular resonance with consumers.
Thanks to the rising cotton price, overseas producers in developing nations are enjoying a remarkable boon. Ghana has revamped and revived its ailing industry, launching its campaign, “Cotton - White Gold” in February, aiming to inspire a turnaround in an industry which Ghana’s own ministers described as having suffered at the hands of inconsistent funding among other factors.
According to the FAO, in Central and West Africa, more than 10 million people depend on cotton production to earn enough cash to pay for the food they eat.
So it’s no surprise that Ghana’s government is now squarely behind ‘White Gold’. It also has the backing of three commodity marketing giants, as Olam Ghana, ARMAJARO and WEINCO, each reach into their pockets to the tune of about $US10 million for the production and marketing of the fibre.
Developing nations now also battle for the cotton-producing crown. It was in the early 1980s that China usurped the USA as the world’s largest cotton producer, but there is speculation that India will soon seize that title. With the advantage of hybrid seed and high expectations for continued innovation in GM characteristics, India’s production could overtake China by 2015.
But what of those cotton fields back home? Floods may have decimated many producers this year, but have in turn created a positive outlook for next season. It seems it will depend as always on the weather, but equally as much on legislation, regulations and policies, which are still in the making.
Growers in the Murray Darling Basin, for example, must feel like rejoicing at prices on the one hand and weeping at the uncertainty of future water allocations on the other.
You only have to look at the vigour with which Cotton Australia has taken the fight to the Murray Darling Basin Plan to understand just what’s at stake for any regions heavily involved in annual broadacre activities. Rice and cotton operations are looking squarely down the barrel of redundancy if the MDBA’s minimum 3000 gigalitre return of flows to environmental water goes ahead.
As water becomes subject to higher pricing and government diverts flows from farming operations, what do the options seem to be? Will hard-hit producers simply have to walk away from white gold, turn their back on its prices, and grow something else?
In the current climate, it must be fear of the unknown which plagues all cotton growers in irrigation zones. Will Australia’s cotton industry be out-legislated? Will the fibre’s climbing prices be primarily enjoyed, with abandon, by laissez-faire African and Asian nations, who may not in all cases be cropping cotton sustainably, but for now at least have governments who ensure that white gold never goes thirsty? The answers, it would seem, rest with Craig Knowles and the MDBA.
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