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WORLD AND U.S.
COTTON PRODUCTION,
SUPPLY AND DEMAND,
U.S. SUSTAINABILITY
PROTOCOL
2019
1
U.S. COTTON ORGANIZATIONS EXPLAINED
2
COTTON
INCORPORATED
NATIONAL COTTON
COUNCIL
SUPIMA COTTON COUNCIL
INTERNATIONAL
ESTABLISHED 1972 1938 1954 1956
HEADQUARTERS Cary, NC Memphis, TN Phoenix, AZ Washington, D.C.
MISSION Increase global cotton
consumption through
promotion and
research
Ensure the ability of all
U.S. cotton industry
segments to compete
effectively and profitably
in the raw cotton, oilseed
and U.S.-manufactured
product markets at home
and abroad
Increase the
consumption of
American Pima and
awareness of the
premium quality of
SUPIMA® branded
cotton products
Funded by the U.S.
government and the U.S.
cotton industry with the
mission of driving U.S. cotton
exports globally
o We have 60 people
located in 15 offices
around the world with the
majority in Asia covering
approximately 50
countries.
o And, we have 5 technical
consultants located in 4
countries.
CCI TODAY: WHO WE ARE
3
GLOBAL COTTON SUPPLY CHAIN
4
Raw
Cotton
Spinning Mill
Turns it into
Yarn
Fabric Manufacturing for
Knits, Wovens, Home
Textiles
Dyeing &
FinishingCut & Sew Brands/Retailers
WORLD FIBER MILL USE
5
0
10
20
30
40
50
60
70
03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19F
MIL
LIO
N M
ET
RIC
TO
NS
Cotton Polyester
WORLD COTTON PRODUCTION
6
0
5
10
15
20
25
30
0
5
10
15
20
25
30
02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19f
MIL
LIO
N M
ET
RIC
TO
NS
WORLD SUPPLY AND DEMAND
MILLION METRIC TONS
7
2018/19e 2019/20f Change
Production 25.9 27.2 +1.3
Mill Use 26.2 26.5 +0.3
Trade 9.0 9.4 +0.5
Stocks 17.6 18.2 +0.6
China 7.8 7.4 -0.4
All Others 9.8 10.9 +1.1
WORLD COTTON ENDING STOCKS
8
0
5
10
15
20
25
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18e 19f
MIL
LIO
N M
ET
RIC
TO
NS
U.S. ROW China
o After years of destocking, China’s
reserves have reached a normal level.
o With a 12 million metric ton difference
between production and mill use,
China is projected to increase imports
in order to meet the needs of their
textile industry.
o USDA projects Chinese imports will
increase to 2.2 million metric tons in
the 2019/20 marketing year.
AS CHINA’S STOCKS FALL, IMPORTS ARE SET TO
INCREASE
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17/18 18/19 19/20f
Production 6.0 6.1 6.1
Mill Use 8.9 8.6 8.6
Imports 1.2 2.1 2.2
Stocks 8.3 7.8 7.4
Stocks/Use 93% 90% 86%
MILLION METRIC TONS
COTTON PRICES & CHINA TRADE POLICY
10
11
CHINA
where to get all that cotton?
China grows less cotton than its mills consume (on average 35% less) gov’t
stocks
at end of
2013/14
were over
one and a
half years
of mill-use
Sources: Cotlook, USDA, 2018/19 forecast by Cotton Incorporated
Stabilization of reserves requires imports to equal China’s production deficit
Government reserves been filling the gap, but stocks drawn down
11.5 mil
tons >2 mil tons
gov’t
stocks
at end of
2018/19
sales will
be
less than
three
months of
mill-use
- recent imports as low as 1 million tons
- recent deficit near 3 million tons
- Chinese imports need to triple
o U.S. forecast to export near record 3.6 mil. tons in 2019/20
o Brazil forecast to export 1.9 mil. tons, cotton price will influence
acreage
o W. Africa forecast to export 1.1 mil. tons, steady at 2018/19
levels
o India forecast to export 0.9 mil. tons, weather & pest questions
o Australia forecast to export 0.4 mil. tons, drought affecting
planting
WORLD’S COTTON EXPORTERS OUTLOOK
FOR 2019/20
12
U.S. BALANCE SHEET
13
17/18 18/19 19/20 Change
Production 4.6 4.0 4.8 +0.8
Mill Use 0.7 0.7 0.7 0
Exports 3.5 3.2 3.6 +0.4
Stocks 0.9 1.0 1.6 +0.5
Stocks/Use 22% 29% 33% +4%
MILLION METRIC TONS
September 2019 USDA WASDE Estimates
THE U.S. COTTON BELT
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Southeast
Mid-South
Southwest
West
U.S. DROUGHT MONITOR
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September 4, 2018 September 3, 2019
U.S. COTTON EXPORTS
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0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
4,51
99
0
199
1
199
2
199
3
199
4
199
5
1996
199
7
199
8
199
9
200
0
200
1
2002
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
2019
MILLION METRIC TONS
17
COTTON USA SUSTAINABILITY TASK FORCE
SETS NATIONAL GOALS
18
35 YEARS OF REDUCED ENVIRONMENTAL IMPACT
19
Land Use WaterSoil Loss Energy GHG
31% 44% 82% 38% 30%
Source: Field to Market 2016 Environmental and Socioeconomic
Indicators Report. Available at: www.fieldtomarket.org.
2025 GOAL –ADDITIONAL IMPACTS
20
Land Use WaterSoil Loss Energy GHG
13% 50% 18% 15% 39%
U.S. COTTON NATIONAL GOALS FOR CONTINUED IMPROVEMENT
30%
Carbon
ACHIEVING 10-YEAR GOALS WOULD
DEMONSTRATE IMPROVEMENT IN KEY METRICS
Land
Water
SoilEnergy
GHG
1981-85
1991-95
2001-05
2011-15
21
ACHIEVING 10-YEAR GOALS WOULD
DEMONSTRATE IMPROVEMENT IN KEY METRICS
Land
Water
SoilEnergy
GHG
1981-85
1991-95
2001-05
2011-15
10 year goal
22
o New technologies
o Producer-funded research
o A continuous improvement program through the
U.S. Cotton Trust Protocol ®
HOW WILL U.S. COTTON ACHIEVE THESE GOALS?
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o Voluntary
o Supports 10-year goals
o Phase one in 2019 crop
o Implementation in 2020 crop
24
KEY PRINCIPLES:
Standards
Measurement
Verification
Data provided to the supply chain
25
o Checklist of practices
o FieldPrint data tool
o Continuous
improvement plan
REQUIREMENTS FOR GROWERS
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5) Harvest
6) Biodiversity & Wildlife
7) Fiber Quality & Traceability
8) Farm Worker Fairness
9) Healthy Farmstead
1) Soil Health
2) Plant Nutrition
3) Water
4) Plant Protection
27
CHECKLIST
BEST MANAGEMENT PRACTICES (9 CATEGORIES -120 QUESTIONS)
o Permanent Bale
Identification
o USDA Classification
PROTOCOL FIBER QUALITY AND TRACEABILITY
REQUIREMENTS
28
o Fair wages
o Fair treatment
o Safe working environment
o No forced labor
o Training
PROTOCOL FARM WORKER FAIRNESS
REQUIREMENTS
29
30
oAnnual
quantitative
measurement
sustainability
metrics
PROTOCOL MEASUREMENT REQUIREMENT
30
o Second party assurance
o Third party on-farm visit
VERIFICATION
31
BEST MANAGEMENT PRACTICES HELP ACHIEVE INDUSTRY GOALS
32
Industry’s 10-Year Goals For Environmental Metrics
Reduce
Land Use
by 13%
Increase
Irrigation
Efficiency
by 18%
Reduce
GHG by
39%
Reduce
Energy
Use by
15%
Reduce
Soil Loss
by 50%
Increase
Soil
Carbon by
30%
Best
Ma
na
ge
men
t P
racti
ces
En
vir
on
men
tal
Soil Health
Nutrient Management
Water Management
Crop Protection
Harvest Preparation
Wildlife/Biodiversity
So
cia
l
Worker Relations Provide a safe work place for all employees, assure fair treatment and compensation.
Farm ManagementMaintain household and farmstead operations which assure safety for family, workers, farm animals and the
environment.
Fiber
Quality/TraceabilityWork to assure fiber quality is maximized by selecting appropriate varieties, managing for fiber quality
consistent with yield goals and preserving quality during harvest and ginning.
ENVIRONMENTAL CONCERN
MICROFIBERS
33
UNINTENDED CONSEQUENCES OF LAUNDERING
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MICROFIBERS IN THE NEWS
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POLYESTER & MICROPLASTICS POLLUTION
“BE PART OF THE SOLUTION” MICROFIBER
VIDEO
37
ETHICAL SUSTAINABILITY
o We are supporters of the Partnership for
Sustainable Textiles.
o We encourage our customers to join
us to achieve social, ecological and
economic improvements alongside
the entire textile supply chain.
38
o Brands around the globe are committed to sourcing from only sustainable raw materials.
These brands are creating lists of approved sources for cotton. And, while U.S. cotton is
widely considered sustainable, many brands have not put U.S. cotton on their lists
because of no independent verification.
o The new U.S. Cotton Trust Protocol addresses this issue and adds real quantifiable goals
and data to back up any claims. In a pilot phase now, it will roll out in early 2020.
SUSTAINABILITY AND TRACEABILITY
39
o While they have their list of sustainable cotton, brands and
retailers are still struggling to prove the origin of the raw
materials in their products. They need to prove that their raw
materials are being produced sustainably, without forced labor
and under fair working conditions.
o In order to prove raw material origin, brands are looking for
solutions that will mitigate risk to their corporate claims around
their CSR goals and commitments.
SUSTAINABILITY AND TRACEABILITY
40
YOUR TRUSTED PARTNER IN SCIENTIFIC TRACEABILITY
August 21st 2018
Rupert Hodges & Benjamin Tomkins
Executive Committee Board Meeting
Oritain, formed in 2008, uses forensic science to determine the origin of products.
Founded out of the University of Otago, by Professor Russel Frew, who is a world-leading expert and advisor to the UN.
Our goal is to be the world’s most trusted company at scientifically verifying origin.
Offices in London, Sao Paulo, Sydney, Dunedin and Switzerland.
Oritain Global
2. Samples of thegenuine product are collected and analysed to identify the originfingerprint.
3. We store thefingerprint in the Oritain database.
4. Samples from themarket can be collected for testing.
5. Products from the market are tested to verify theclaimed origin of the product.
6. On-pack certification and marketing opportunities can be leveraged for consumers
How it works.
We create unique profiles for our clients’ products and once this has been completed,
we can audit their product at any stage in the supply chain.
Li Al Pb Cs Rb Sr
1. The product naturally absorbs different levels of chemical elements and isotopes. This gives the product its unique origin fingerprint.
13C 2H
CD
1168
V3
Database
Proprietary and Confidential
Testing Results
o Pilot study conducted with Oritain in 2019. Cotton from 2 US
states and 3 other countries were spun into yarn and dyed fabric
and 15 blind samples were sent to Oritain.
o The country of origin for every one of the 15 samples was
correctly identified!
o Supima cotton fields have been fully mapped and offer 100%
traceability.
o U.S. Upland cotton will be mapped by the end of 2019.
ORITAIN
46
KEY PRINCIPLES:
• Standards
• Measurement
• Verification
• Data provided to the supply chain
• Fully traceable
47
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