The National Cotton Council continues its activities since 2014 to ensure that all interested parties, such as industrialists, tradesman and farmers, with an aim to ensure continuity and global competitiveness of national cotton agriculture, cotton trade and cotton-based industries with the adoption of policies and practices.
UPK Chairman Bertan Balçık said on the subject, “The fact that each of our board members are experts and successful in their field that makes it easier for us to carry out our activities effectively.”
Can you tell us about the activities of the National Cotton Council?
Our council was established in 2007. We have been operating within the framework of the mission we have set for the national agriculture and cotton policies of our country for nearly 14 years. As our routine activities, we prepare the Cotton Sector Report every following year and we determine the cost of mass cotton production in light of the data received from the Chambers of Agriculture, Exchanges and Cooperatives and share them with the public. We provide information to the relevant Ministries about the measures to be taken by closely following the developments at home and abroad. We produce short, medium and long-term solutions for cotton production, costs, support policies, sustainability, quality losses that may occur before and during harvesting, ginning cotton, and also we are redefining standards for inspecting fiber cotton, establishing cotton trade and import-export policies.
‘’We Conduct GMO Free Turkish Cotton Studies”
We are carrying out the works of our GMO (Genetically Modified Organisms) Free Turkish Cotton (Turkish Cotton without GMO) brand, which we have together with İzmir Commodity Exchange and Istanbul Textile Raw Materials Exporters Union. Every two years, we run the National Cotton Summit in different cities majored in cotton in order to both raise awareness and to create solutions with a common sense. In the light of TURKSTAT data, we reveal what cotton raw material brings to our national economy by updating our research it every year with our Cotton Value Chain project. We attend the meetings of the International Cotton Consultative Committee, as far as possible, and inform our interlocutors on our theses and policies.
What conclusions we can draw on the importance of cotton in the textile industry?
Generally speaking, cotton is the most important raw material of the sector and composing almost half of the total fiber demanded by the Turkish textile. On the other hand, the annual cotton consumption in our country before the epidemic was over 1.5 million tons and we could meet only 50 percent of this with domestic cotton production. We import the rest of the cotton from the USA, as well as from Brazil, Greece, Azerbaijan and from the Turkic Republics. Turkey controls a textile and clothing sector such can create value added growth in both domestic cotton and imported cotton. To put it in 2018, domestic and imported cotton raw materials worth of $ 2,740 billion, an increase of $ 30,294 billion, or 11 times more, was achieved. I would also like to point out that we have created a much higher current surplus than imported cotton thanks to domestic cotton. The figure I am talking about here is approximately 1,300 billion dollars.
“Creates Employment Nearly for 1 Million”
On the other hand, it should not be forgotten that cotton agriculture is a source of livelihood for more than 1 million people. However, Textile and Ready-to-Wear industries locally employ around 1 million. The workforce created in Textile and Ready Wear corresponds to 25 percent of our total manufacturing industry. Regardless of which criteria you measure with, cotton and garment in the industry are the sectors that add more value to our country.
“The Lion's Share is Synthetic Fiber”
In terms of world demand, cotton usage rate is only 25% of total fiber consumption, especially due to the rapid population growth and the effect of globalization on consumption trends. Unfortunately, the lion's share here is 63 percent synthetic fibers! The development that is pleasing for cotton is that the general trend is in favor of cotton. Of course, the prominent factors here are sustainability, environment and working conditions. Although there are some critics and manipulation put into news agenda by some circles to consciously create perception against cotton, we think that cotton and cotton blended products are more advantageous than synthetics at this point. Because the researches show that the demand for cotton products increases as the level of awareness and income increases.
What year cotton production in Turkey compared to the situation?
The average cotton cultivation for many years in Turkey 450 - is around 500 thousand hectares. In other words, we produce an average of 800 - 850 thousand tons of fiber cotton. Before 2000s, we had reached 700 thousand hectares of cultivation areas. It is pleasing that, despite the decline in cultivation areas, there was no loss in production amount with the increase in yield.
The knowledge level of our farmer, the investment made in mechanization, the enriching varieties developed in the seed industry, the increasing contribution of our agricultural engineers and machine harvest are the biggest reasons for this yield increase. As a council, our main goal is to produce one million tons of fiber cotton every year. It is possible to achieve this goal together with sustainable policies. In this way, our foreign dependency will lessen and the added value will remain in our country and the bargaining power will increase in the cotton that our industrialists will have to import. In fact, we could achieve this goal in the past year, in 2019. With the rising cotton prices in 2018, cotton cultivation areas increased to 580 thousand hectares in 2019. Unfortunately, as a result of climate conditions lowering cotton yield, we remained at 814 thousand tons. While looking at the point closer we have reached, Turkey unfortunately has experienced a loss in 2020 in terms of cotton production. We observe that cotton cultivation areas have decreased by about 50% from 580 thousand hectares to 350 thousand hectares.
Let me express this right now; this regression has nothing to do with the Covid-19 outbreak. The main reasons are that the trade war between the USA and China, which started last year in May, affected the cotton price negatively with all commodities, the reduction in domestic prices that is lower than the cost of manufacturer in harvesting period, no increase in the subsidies and grants given to cotton, and even two installments payment structure compared to the previous year and the postponement of the münavebe period in spite of requesting it. Our current effort is to restore our production area, which we lost in 2020, in 2021. At this point, our priority will be to take initiatives with the relevant ministries to change the negative view of cotton, the reason of which we cannot understand.
What is the place of Turkish cotton in the world on a numerical basis?
Turkey has a share of about 3.5% ranks sixth in the world in cotton production. We, as the country, have this 3.5% share by using 1.5% of the cotton fields in the world effectively. We are in the fifth place in consumption with 5.5% share. For the last two seasons, world cotton production and consumption have overlapped between 26-27 million tons. In production, India ranks first in the world with 6.4 million tons. India is followed by China with 5.9 million tons, USA with 4.3 million tons, followed by Brazil and Pakistan.
“We are in Second Place in Cotton Yield”
The Turkish farmer gets the highest yield in the marginal unit area. Turkey is the second country in the world after Australia the highest cotton yield in case! However, despite this high yield, our farmers could not make profit due to the increase in costs and the decrease in prices last year. Even without support, our producers would suffer. Besides, our producers with low yields did not sow cotton this year because they have run deficit. We have a strong and integrated textile industry. Therefore, as a country, we should not have a concept that we should not produce cotton in terms of domestic raw materials. However, our place in the world will decrease from sixth to eighth in the production of 2020. In this commercial, nations do trade with Turkey will benefit the most. Our industrialists who have already paid billions of dollars to cotton imports will have to pay more foreign currency this year and next year. Turkey is ranked fourth in the world in terms of cotton imports. We paid 1,351 billion dollars for 761 thousand tons of imports in the last season. This season, we imported almost 745 thousand tons in the first nine months and almost reached the last season.
What are the developments in the market about cotton taking place recently?
As you know, the most important development experienced right now is the negative effects of Covit-19 outbreak. We are trying to manage the situation same as the world. We are going through important days in history. We have never experienced such a period before. Yes, some years were very rare, but there were times when the cotton trade stopped for three or four months, but at least we knew that it was temporary. Now, we do not know whether the outbreak will recur, or when it will recur, whether to bring economies back to the point of closure. The most important issue here is human health, on the other hand, consumer habits and behaviors will not be known until the vaccine is found. Nevertheless, since the economies are gradually opening up, we observe that textile and apparel companies have started to work according to the speed of this recovery. The expansionary policies implemented by the governments are positive to revive consumption. The most unfavorable effect of the epidemic on the cotton product was the cotton trade coming to a halt and the prices dropped by 15%. Although the prices are currently trying to get close to their old levels, the transactions are weak in the Cotton Exchanges due to the limited demand. This situation makes the cotton producers uneasy. If the prices occur below the cost as in the previous year, farmers will not have the strength to bear. Therefore, whatever can be done in favor of the manufacturer, it is necessary to make decisions and implement them as soon as possible.
The views of our Council on things to do are very clear. These;
• As the difference in payment support has remained the same for two years, it should be revealed with the inflation difference for the previous years around 1.50 TL,
• Financing support should be provided for Cotton Unions to purchase cotton externally witout taking into account partners.
• The ginner should not be prevented from selling to the spinner. Because of this, real supply demand cannot occur in stock markets, the producer cannot sell its product at the price it deserves
• In order to balance the possible deterioration in demand, TMO should be given the authority to purchase fiber cotton,
• The use of Licensed Warehousing outside of its real purpose should be prevented,
• Necessary changes should be made for the producer to put his own cotton in the Licensed Warehouse,
• The cotton product should be freed from multi-headedness for all phases and given only to the responsibility of the Ministry of Agriculture and Forestry.
• Extraordinary times require extraordinary decisions!
What is your 2020 cotton target?
Unfortunately, we will remain well below the target for 2020 in terms of cotton production. Despite all the problems, our expectation was to produce 800 thousand tons of fiber cotton in an area of 450 thousand hectares. But as I said, this will not happen! Well, if you ask what happens, we have two different scenarios, optimistic and pessimistic, based on the data from the field. In both of the scenarios, we calculated that climate conditions and average cotton yield would be good. In our optimistic scenario, we anticipate to obtain approximately 600 thousand tons of fiber cotton from 350 thousand hectares.
“We Foresee 510 Thousand Tons of Fiber Cotton”
In our pessimistic scenario, we anticipate to obtain approximately 510 thousand tons of fiber cotton from 300 thousand hectares. Unfortunately, the reason for the bad scenario is that it is not possible to predict exactly how much area of unrecognized cotton seed is sown in our country. Undeclared illegal seed cultivation poses a great threat to our Turkish cotton and GMO Free Turkish Cotton brand. In addition, diseases that nobody can predict, especially the "pink wolf" pest, can cause irreparable wounds to cotton farming. We expect our Ministry of Agriculture and Forestry General Directorate of Plant Production (BÜGEM) to identify those who are operating, except for the companies that produce licensed production, to carry out inspections and to implement the necessary measures.
Is there anything you want to add?
You know, two stereotyped wording came to the fore in the process of COVID-19 and beyond. One of them was “nothing will be the same anymore” and the other was “more importance will be given to agriculture”. As someone who comes from the production of agriculture, I can easily say that neither farmers nor those farmers believed much in the sentence about agriculture. Already a very concrete decision regarding agriculture and producer has not been taken. On the contrary, we went through a period of uncertainties. And I am afraid that we will enter a period in which supply and demand fluctuations will increase and these movements will charge the producers more. Of course, it is an indisputable fact that these movements will bring a decrease in the income of the agricultural sector. We want producers, as well as consumers, fixed income and low income, to reduce inflation and ensure price stability. We are also very complaining about the price increases in agricultural inputs and inflation. And as the agricultural sector, we are ready to do our part on food supply and security and controlling inflation.
What we expect the most is to see how much share will be allocated to agricultural subsidies in the next year's budget and how to make product pattern planning, especially strategic products. At that time, we will also believe that agriculture will be given more importance than before.
