New cooperation between NCC and CNTAC

By Zhao Zihan

National Cotton Council （NCC） - Cotton Council International （CCI） 2016 China Leadership Exchange Delegation visited China National Textile and Apparel Council （CNTAC） on June 27th， 2016 for a better communication of the status quo of textile industry in both countries as well as cooperation in cotton industry. During the meeting， NCC and China Cotton Textile Association （CCTA） signed a “Letter of Intent to Foster Enhanced Communications between the National Cotton Council of America and the China Cotton Textile Association”.

It is learned that NCC and CNTAC have maintained long-term friendly communication and exchanges. After ITMF 2015， NCC President Gary Adams had another meeting with Wang Tiankai， President of CNTAC during his visit to Beijing this March， during which the two sides talked about the supply-front reform of Chinas textile industry and the U.S. cotton industry， reaching a preliminary cooperation intention.

Status quo exchanges

During this meeting， NCC was presented with more detailed information about the 13th Five-Year Program on Chinas Textile Industry， while introducing the U.S. cotton industry and quality control .

Wang Tiankai pointed out that during the 13th Five-Year Program period， China should take the great opportunity to sprint to be a textile power with gradually increasing capacities in the aspects of science & technology， brands， sustainable development and talents. In addition， he also briefed the performance of Chinas textile and apparel industry in the first four months this year.

Zhu Beina， President of CCTA， introduced the use of cotton in China to the Delegation， saying that “The use of cotton in China was totaled 6.75 million tons in 2015， 78% of which was domestic cotton， while the domestic proportion was only 50% in 2013.”

In terms of the price differences between domestic and overseas cotton， Zhu Beina stated that the differences are being narrowed down； however， the growing prices of domestic cotton are unfavorable to the downstream enterprises for rising raw material costs. She believed that it was attributed to the release of State Reserve Cotton which had been intended to release 30，000 - 50，000 tons/day but presented an actual release of 27，000 tons/day in the last two months， an illusion of lack of cotton in the market.

According to Zhu Beina， from January to May this year， Chinas total imported cotton decreased by 53%， of which the import from the U.S. plummeted more than 70%， while that from Australia skyrocketed by 500%. As for yarn imports， the yarn imports fell by 20% during the first five months， and the largest decline was from Pakistan， while Vietnam enjoyed a pretty high proportion.

“China has always been the largest market for U.S. Cotton.” Shane Stephens， Chairman of NCC and Head of the Delegation， said， “A few years ago， about 50% of U.S. cotton were exported to China.” However， at present， Chinese market accounts for only 10% of U.S. cotton exports， ranked the fourth one. This is also due to the quota restrictions caused by the State Reserve Cotton policy， affecting the foreign cotton imports. Although some U.S. cotton has been exported to Vietnam， Indonesia and other countries， most went to the textile factories that Chinese enterprises have established in those countries. Therefore， U.S. cotton is still indirectly serving the Chinese textile industry. “The U.S. cotton industry will be ready to respond to the market demand in China.” Shane stressed.

Karin Malmstrom， Director， China and Northeast Asia Area， CCI， added that she had repeatedly visited the cotton belt in Xinjiang Uygur Autonomous Region for in-depth understanding of local needs and exploration of more cooperation possibilities.

Letter of Intent for win-win cooperation

The U.S. cotton and the Chinese textile industries have maintained a good relationship for over a decade through the joint efforts made by NCC and CCTA. Based on this long-standing interaction and cooperation， the two parties have established a profound relationship through various means of communication.

The leaders of both parties agreed to actively enhance and elevate the current relationship through proactive win-win cooperation and mutual understanding. Therefore， by recognizing the significance of the relationship， they signed the “Letter of Intent to Foster Enhanced Communications between the National Cotton Council of America and the China Cotton Textile Association” during the meeting.

The session with CCTA concluded with such an agreement between the NCC and CCTA to foster enhanced communication between the two parties. With a focus on quality， the two groups will explore opportunities to jointly promote both U.S. raw cotton and U.S.-manufactured yarn， as well as Chinese cotton， in an effort to combat the growing competition from synthetic fibers.