As the Swiss Better Cotton Development Association (BCI) quietly withdrew its statement on “banning Xinjiang cotton”, the storm seemed to end with “the boycotters exiting in despair”; but in fact, there is not much behind this debate. It is just a sudden move by industry organizations and foreign brands to blindly follow the trend, but it is the story of China’s cotton industry turning against the wind and rising strongly.
41 million VS 3.3 million! China’s cotton daily trading volume “crushes” the United States
In the past century, cotton and cotton textiles have been the world’s largest traded goods, and even played a role in the rise of the United Kingdom and the United States. Crucial role. As early as the 1980s, the United States was the world’s largest cotton producer. Not only did it produce large amounts of cotton, it also controlled the pricing power of global cotton. Among them, the New York Futures Exchange (now renamed Intercontinental Exchange, or ICE) played a key role. Key role.
In 1870, the New York Cotton Exchange came into being, and cotton futures trading was launched in the same year. In the following more than 130 years, 14 other commodity exchanges were born and carried out around the world. Cotton futures trading, but in the end only the New York Futures Exchange “survived”, and this is also an important reason why the United States can control global cotton pricing power.
But in recent years, the United States seems to have vaguely felt the challenge. On June 1, 2004, Zhengzhou Commodity Exchange listed cotton futures varieties. It has been in operation for 17 years and its influence in the global cotton market has gradually increased. In April 2016, cotton futures on Zhengzhou Commodity Exchange hit a single-day record of 4100. Astonishing trading volume of 10,000 bales, the trading volume of US cotton on the same day was only 3.3 million bales. It can be said that the daily trading volume of Chinese cotton has undoubtedly “crushed” the United States.
Behind this is the fact that U.S. cotton production has been rapidly overtaken and China has become one of the countries with the greatest influence on the world’s cotton market. Reality. In 2020, China’s cotton output was 5.95 million tons, and Xinjiang alone contributed 5.2 million tons, accounting for 87% of the country and 1/5 of the world. In addition, as the world’s largest textile producer, China’s self-produced cotton is basically consumed domestically, and there is still a large demand gap every year. In contrast, in the United States, its textile industry has basically been transferred to Asia; therefore, 82% of U.S. cotton Production is exported, and the largest market is China.
Cotton companies call on China to build its own standards: The United States is accelerating action!
Chinese cotton is constantly entering the world market, and many American media have also recognized the fact that it is really difficult not to use Xinjiang cotton. The American Consumer News and Business Channel analyzed “Why boycotting Xinjiang cotton is easier said than done” in a report on April 16. The reason is that China’s cotton production ranks second in the world (after India), and At the same time, China also exports cotton to 14 countries including Thailand, Vietnam, India, Pakistan and Bangladesh, and exports yarn to 190 countries.
The US media “New York Times” also pointed out in a report at the beginning of this month that the global textile industry supply chain is very long, and the middle Many steps may be carried out in different countries or regions such as China. Even if BCI member brands do not cooperate with Chinese factories, there is no guarantee that their partners will not purchase Xinjiang cotton. Therefore, it is actually difficult for the world to completely abandon Xinjiang cotton.
The importance of Xinjiang cotton is self-evident, and for domestic cotton companies, it is even more important to establish their own standards as soon as possible. You know, BCI, as one of the sustainable cotton standard initiative organizations, connects all links of the upstream and downstream of the global cotton industry, and the turmoil caused by the organization has also affected the business of domestic cotton companies to a greater or lesser extent; more Importantly, as early as July 2020, the United States launched the U.S. Cotton Trust Agreement in an attempt to establish its own standards.
Some domestic cotton companies pointed out that if the United States really gains actual control over this agreement, it will inevitably require countries to use the American version of “certification standards” and “supply chain traceability systems”; Coupled with the original control of the United States in the field of international sales, the development of China’s textile industry will become even more passive.
Fortunately, our country has also stepped up its pace and plans to launch the Chinese version of the “Better Cotton Development Institute” (BCI) – “South China Morning Post” reported on April 15 that cotton Zhongnong Guoji, a vertical service provider, established the “Future Cotton” plan two years ago. According to insiders, the uncertainty caused by the Xinjiang cotton turmoil pushed the plan to make greater progress in January this year. The implementation of this plan will be around the corner. </p
