Global Cotton Scenario

Vs
Africa : With Special focus on
Ethiopia

February 14-16 2020, Addis Ababa, Ethiopia

Dr. Venkatakrishnan, Cotton Expert

Texcoms Textile Solutions, Singapore

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 2

Contents

1.0 Intoduction 4.0 Suggestions

• Importance • System and Procedures needed
• High Competition for Acreage Among Agricultural Crops • Creation of Marketing Platform & Classing centres in
• Highlights different regions of Ethiopia
• Forecast: 2020 – 2024 • Overview of Cotton Classification Process at the classing
centre
• Grading Data Dissemination
2.0 Global Cotton Scenario
• Production of cotton lint : 2018-19 (in ‘000 Metric tons) 5.0 Need of the Hour: Ethiopia
• Cotton Cultivation : 2018-19 (in ‘000 Hectares ) • Importance of Cotton Grading & Classification: Ethiopia
• Cotton Lint Yield: 2018-19 (kg/Hectare)
• Cotton lint Consumption: 2018-19 ( 000 Metric ton )
• Export of cotton lint : 2018-19 ( ‘000 Metric ton )
• Import of Cotton Lint : 2018-19 ( ‘000 Metric ton )
• Ratio of Ending Stocks to use: 2018-19

3.0 Cotton Grading Model & Practices

• Importance of Grading
• Cotton Grading: Model & Practices
• Cotton Grading: Model & Practices : Ethiopia
Cotton

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Importance

• The most important and widely produced agricultural and industrial crops in the world.
• Grown in more than 80 countries on about 2% of the world’s arable land,
• Heavily traded agricultural commodity, with over 100 countries involved in exports or imports of cotton.
• More than 100 million family units are engaged directly in cotton production
• Provides employment to millions in allied industries such as agricultural inputs, machinery and equipment, cottonseed
crushing and textile manufacturing
• Cotton cultivation contributes to food security and improved life expectancy in rural areas of developing countries in
Africa, Asia and Latin America.
• Cotton played an important role in industrial development starting in the 17 th century and continues to play an
important role today as a major source of revenue.
• The value of world cotton production is estimated at more than $30 billion.

Source: Spend Edge:Global Cotton Market - Procurement Intelligence Report, December, 2019
 5

High Competition for Acreage Among Agricultural Crops

• Crops such as rice, wheat, soybeans, and corn deliver consistently higher returns to farmers compared to
cotton crops.
• Increasing demand for such staple foods will encourage the farmer to plant food crops instead of cotton
crops.
• The report on the global cotton market – procurement market intelligence report from SpendEdge
estimates that growth in demand for these crops can lead to a potential decline in acreage for cotton and
could affect the supply globally
 6

Highlights
2018/19
• The year started with rising prices and ended with falling prices
• Global area decreased by 1% to 32.6 million hectares (ha) and yield declined 2% to 790 kg/ha
• World production slipped 3% to 25.7 million tonnes
• More than half of global stocks (52%) are now being held outside of China
• After a few years of relative calm, world agricultural markets face policy uncertainty and trade tensions

2019/20
• India leads the world in production despite low yields
• With production expected to grow by 1 million tonnes, and consumption projected to remain flat, prices will
be under heavy pressure throughout the year

Source: Spend Edge:Global Cotton Market - Procurement

Intelligence Report, December, 2019
 7

Production of cotton lint : 2018-19 (in ‘000 Metric tons)

Position World 25694 % Contribution
1 China 6040 23.5
2 India 5350 20.8
3 USA 3999 15.6
4 Brazil 2726 10.6
13 Benin 295 1.1
14 Mali 276 1.1
16 Ivory Coast 202 0.8
18 Burkina Faso 183 0.7
20 Cameroon 132 0.5
21 Egypt 111 0.4
22 Sudan 104 0.4
30 Ethiopia 57 0.2
 8

Cotton Cultivation : 2018-19 (in ‘000 Hectares )

Position World 32647 % Contribution
1 India 12250 37.5
2 USA 4130 12.7
3 China 3367 10.3
4 Pakistan 2325 7.1
8 Mali 698 2.1
9 Benin 656 2.0
10 Burkina Faso 646 2.0
16 Ivory 392 1.2
19 Cameroon 250 0.8
26 Sudan 180 0.6
29 Egypt 141 0.4
34 Ethiopia 78 0.2
 9

Cotton Lint Yield: 2018-19 (kg/Hectare)

Position Country Yield (kg/Hectare)
1 Israel 2009
2 Turkey 1878
3 China 1794
4 Russian Federation 1750
5 Mexico 1692
6 Brazil 1685
7 Australia 1414
8 Greece 1268
9 South Africa 1103
10 USA 968
17 Egypt 787
20 Ethiopia 737
40 India 437
42 Mali 395
 10

Cotton lint Consumption: 2018-19 ( 000 Metric ton )

Position World 26126 % Contribution
1 China 8250 31.6
2 India 5400 20.7
3 Pakistan 2358 9.0
4 Bangladesh 1579 6.0
5 Turkey 1555 6.0
6 Vietnam 1506 5.8
8 Brazil 730 2.8
9 USA 712 2.7
18 Egypt 167 0.6
25 Ethiopia 52 0.2
37 Sudan 18 0.1
48 Burkina Faso 3 0.0
58 Cameroon 2 0.0
62 Benin 1 0.0
 11

Export of cotton lint : 2018-19 ( ‘000 Metric ton )

Position Country In ‘000 Metric ton
1 USA 3214
2 Brazil 1446
3 India 800
4 Australia 795
5 Mali 300
6 Greece 298
7 Benin 292
8 Burkina Faso 200
9 Cote D Ivory 195
16 Sudan 86
18 Egypt 75
21 Azerbaijan 66
31 China 38
39 Ethiopia 7
 12

Import of Cotton Lint : 2018-19 ( ‘000 Metric ton )

Position Country In ‘000 Metric ton

1 China 9208
2 Bangladesh 2100
3 Vietnam 1510
5 Turkey 762
6 Indonesia 685
7 Pakistan 668
8 India 340
13 Egypt 131
25 South Africa 15
31 Ethiopia 6
40 USA 1
 13

Ratio of Ending Stocks to use: 2018-19

Position Country Ratio
1 Hong Kong 51.93
2 Argentina 1.14
3 China 1.07
4 South Africa 1.05
5 Brazil 0.99
16 Burkina Faso 0.57
19 Cameroon 0.52
28 Ethiopia 0.37
31 Egypt 0.35
42 USA 0.26
43 India 0.24
57 Sudan 0.15
62 Mali 0.13
 14

Forecast: 2020 - 2024

• Consumer's preference shift towards fashion that has variety, value, and is sustainable is popularizing the
concept of refurbished fashion.

• This will create a substantial demand for cotton fabrics that befit the concept of refurbished fashion.

• These factors will have cumulative impacts on spend growth in the cotton market during the forecast
period
Ethiopia’s Cotton Scenario

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Ethiopian Scenario

Cotton Quality Issues: Merits

• Mainly Heavy contaminant in seed cotton beyond • Scope for Increasing the cotton cultivation area &
acceptable level. ( 10 to 15 % ) production, three million hectare land available
• 60 % of contaminants comes from farm • Scope for Skill improvement
• Obsolete Ginning Machinery • very high Inherent fibre quality
• Erratic Power Supply
( strength & length uniformity)
• Low Productivity of Labour
No admixture of verities, due to few varieties
• Manual picking similar to India
• Fast Growth of New Spinning mills & Garment
• Wages for picking are based on weight, hence,
stem, petals, dried leaves etc are picked by
Industry

labours to get more quantity. • Scope for Value addition : Objective method of
• There is no reference price for farmers cotton grading & classification
• Most of the Ginning factories don’t pre clean the • Proximity to major cotton consuming countries
seed cotton before ginning. • Good Scope for Export market
• Ginned lint contains heavy trash beyond
acceptable level (8 to 15 %).
Suggestions

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System and Procedures needed

The pricing should be based on grade

Farmers should be educated about clean cotton picking by conducting on farm demonstration in their fields.

Ginners should avoid mixing of different grades and process only similar grades.

Use pre cleaners , post cleaners and dryers

Maintain required moisture in the seed cotton and lint

Keep seed cotton in a separate roofed platform

Ginned bales should be fully covered with cotton cloth.

Keep seed and bales in a separate place

 19

Creation of Marketing Platform & Classing centres in different regions of Ethiopia

Government should provide marketing platform and regulated market

infrastructure for the sale of primary agriculture produce particularly
cotton through the creation of cotton Market committee (CMC) in
different major cotton growing areas of Ethiopia.

The main functions of these markets or ‘mantis’ are to regulate market

practices such as weighing, process of sale, method of grading and
payment process.

Creation of cotton classing centres at major cotton growing clusters of

Ethiopia.
 20

Overview of Cotton Classification Process at the classing centre

• Samples received at the classing centre(Seed cotton / lint)

• Seed cotton and Lint labelled with codes

• Samples are conditioned to get required moisture

• High Volume Instrument Classification

• Manual Classification

• Grade Estimation based on individual property score (Seed cotton / lint)

• Data Stored in Classing’s facility database

• Data Stored in ETIDI database

 21

Grading Data Dissemination

Seed
Seed cotton
cotton grade
grade details
details as
as well
well as
as lint
lint cotton
cotton grade
grade and
and classification
classification details
details obtained
obtained at
at the
the
respective
respective zone
zone classing
classing centre
centre be
be sent
sent to
to aa common
common server,
server, and
and be
be maintained
maintained by
by ETIDI.
ETIDI.

Once
Once classification
classification is
is complete,
complete, the
the fibre
fibre measurement
measurement results
results are
are immediately
immediately available
available to
to the
the customer
customer
from
from the
the classing
classing facility’s
facility’s database.
database.

Providing
Providing cotton
cotton quality
quality results
results quickly
quickly gives
gives producers
producers and
and buyers
buyers access
access to
to crucial
crucial information
information at
at the
the time
time
of
of sale.
sale.

Seed
Seed cotton
cotton grade
grade and
and quality
quality particulars
particulars of
of cotton
cotton classed
classed lot
lot wise
wise at
at different
different areas
areas of
of aa particular
particular
zone
zone on
on daily
daily basis
basis are
are uploaded
uploaded inin the
the data
data base
base of
of ETIDI
ETIDI and
and transferred
transferred to to ECX
ECX database
database andand can
can
be
be assessed
assessed byby authorized
authorized users
users and
and they
they can
can offer
offer their
their bid
bid price
price to
to aa particular
particular lot
lot based
based onon grade
grade
and
and quality.
quality. Seller
Seller can
can accept
accept the
the highest
highest bid
bid or
or reject
reject the
the bid
bid offer
offer as
as per
per his
his wish.
wish.
 22

Importance of Grading

Grading plays an important role in the marketing process of cotton and it is a

prerequisite for Marketing.

• Helps the producer and seller to determine the price.

• Reduces the cost of marketing

• Helps the consumers to get standard cotton at fair price.

• Facilitates the scope to widen the avenue for cotton export.

• Has a direct influence on utilization point of view.

 23

Cotton Grading: Model & Practices

• US Model => Globally accepted model by Grading Lint ( followed by China, Israel, etc)

• Pakistan Model => Grading of both seed & lint Grading (Priced on seed cotton & lint grade)

• Indian Model => Minimum support price (MSP) for seed cotton of fair and average quality based
on length and micronaire.
=> Traders and Ginners procure seed cotton from farmers either directly or through
the Agricultural produce market committee (auction).
• Support system => If the Market price goes below MSP, then Government of India, through Cotton
Corporation of India, procure cotton from farmers based on MSP.
 24

Cotton Grading: Model & Practices

Indian Model
Cotton Association of India fixes(CAI) daily spot rate (Rupees per candy) for basic grade cotton lint, based on

1. Upper half mean length,

2. Micronaire
3. Strength for domestic sales.
Cotton lint will be traded mostly close to this daily spot rate fixed by the CAI for all staple categories.
Picking by manual Avoids stem, hull, broken leaf
Segregation of infested and immature seed cotton at farm itself.
Trash % in lint will be less than 3%.

USA Model
No manual picking & totally machine picked
Excess Trash in the seed cotton is completely removed.
The trash content in cotton lint will be around 2-3% using pre cleaners before ginning
 25

Need of the Hour: Africa

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ETIDI - Cotton Grading
Model

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Seed Cotton Grade classification

Score Seed cotton grade

Parameters to be assessed for arriving seed cotton
78.1 - 100 Excellent grade

Extraneous matter
60 - 78.0 Outstanding
colour grade
40 - 59.9 Very Good (Base grade)
Leaf grade
20 - 39.9 Good
Ginning Percentage ( GP % )
10 - 19.9 Average

≤ 9.9 Poor
 28

Cotton lint Grade classification

Score cotton lint grade • Extraneous matter

• Preparation (Smoothness or roughness and nepiness of
78.1 - 100 Excellent ginned lint)
• Bark (Long bark, stem )
60 - 78.0 Outstanding • Grass
• Seed coat fragments
Very Good (Base • Oil level
40 - 59.9
grade)
• Spindle twist
20 - 39.9 Good • Other Non plant based contaminants
• Plastic (polypropylene fibres, plastic strings)
• Honey dew
10 - 19.9 Average
• Colour grade ( Rd, +b & CG)
• Leaf grade
≤ 9.9 Poor
• Fibre Properties ( UHML, UI, MIC & Strength)
 29

Ethiopian cotton Colour Grade at different regions

Frequently graded colour grade

Afar- Afar- Afar-

Year South Afar Afar-Lucy Tigray Benshangul Gambela Amhara
Gelsita amibara awash

2014 41 ( 70 % ) 41 ( 50 % ) 51 ( 60% ) 41 ( 50 % ) 41 ( 50 % )

2015 51 ( 50 % ) 21 (67 % ) 21 ( 50 % )

2016 21 ( 60 % ) 21 ( 40 % )

2017 31 ( 50 % ) 21 ( 25 % ) 22 ( 38 % ) 41 ( 25 % ) 52 ( 38 % ) 42 ( 38 % )

2018 33 ( 30 % ) 21 (80 % )
 30

Overall Grade
Overall Grade Percentage at Different Regions Overall Grade Percentage at Different Regions Tigray
2014 2015 Overall Grade Percentage at Different Regions Afar
2016
100
90 70
Tigra 60
80 60 y
south 50
70 50 Afar
60 Afar-Gelsita
40 40
south
50 Afar- 30

%
30
%

%
amibara
40
Afar-Awash 20 20
30
20 Afar-Lucy 10 10
10 0 0
0 EXC OS VG G AVG Poor EXC OS VG G AVG Poor
EXC OS VG G AVG POOR Grade Category
Grade Category
Grade Category

Overall Grade Percentage at Different Regions Overall Grade Percentage at Different Regions
2017 2018

90 90
80 80
70 70
Benshangul
60 60
Gambela
50 50 Afar
Afar
40 Tigray
%

%
Amhara 40
30 Tigray 30
20 20
10 10
0 0
EXC OS VG G AVG Poor
EXC OS VG G AVG Poor
Grade Category
Grade Category
 31
Model ETIDI Classing Data Particulars for Seed Cotton

Zone III
Classing
Zone I Afar (Awash area) Zone II Gambella Amhara(Gonder/
Particulars Metema )
Afar SNNP Somali Gambella Benshangul Oromiya Amhaa Tigray
Number of
lots classed 250 320 125 350 150 180 220 120
(Seed cotton)
Two most VG G EXC G Poor VG OS G AV OS VG OS EXC G VG G
frequent seed
cotton grade
classed ( % ) 25 40 30 25 35 20 30 20 25 35 40 25 25 35 40 20

Two most
frequent
Varieties DP-90 Akala - SJ DP-90
Planted
 32
Model ETIDI Classing Data Particulars for Cotton lint

Zone III
Classing
Zone I Afar (Awash area) Zone II Gambella Amhara(Gonder/
Particulars
Metema)
Afar SNNP Somali Gambella Benshangul Oromiya Amhaa Tigray

Number of
bales classed ( 850 1250 400 250 650 1400 340 550
lint )
Two most VG G EXC G Poor VG OS G AV OS VG OS EXC G VG G
frequent Lint
grade classed 15 20 35 25 45 30 35 10 30 20 40 35 45 25 30 20
(%)
Average HVI 28.4
26.0 25.0 27.0 25.5 28.1 27.5 27.0
Strength
UHML (mm) 29.0 28.2 27.0 28.5 27.4 28.7 29.0 27.8

Average MIC 3.8 4.1 3.5 4.2 3.7 4.0 4.2 3.9
 33
Model Seed & Lint cotton Standards
Conclusion 34

• The inherent qualities of Ethiopian cotton are of very high grade and also we find very
less variations in different quality parameters among regions.

• Grading and classification of Ethiopian cotton will help large commercial farms and
small farm holder to promote Ethiopian cotton globally and also to get a high
acceptance among the countries similar to Ethiopian coffee.
Thank you

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