exporter's guide - gbv
TRANSCRIPT
Chapter 1
The world cotton market 3 Overview 3
Production 4 Production trends 5 Africa in perspective 6 Trends in mill use of fibre 7 Expansion of retail cotton use 8 Retail cotton consumption 8 Mill consumption 9 Inter-fibre competition 10 Long-term projections for textile fibre consumption 11 Trade 11 Biotech cotton in world textile trade 14 Government measures 14
The importance of cotton in world trade 16 Cotton prices 17
Cotton prices measured at many levels 17 Influence of time on prices 18
Spot sales and purchases 18 Forward cash sales and purchases 18 On-call sales and purchases 18 Marketing pools 19
Influence of location and quality on prices 19 Cotton and competing crop prices 20 Structural changes leading to lower real world cotton prices 21 Technology 22 Polyester 22 Prices of cotton yarn 23 Retail prices for clothes 24
Xll
Futures markets 24
Relationship between New York futures and the Cotlook A Index 25
Modeling cotton prices 25
Expectations of accuracy 27
The Cotlook Indices 27
A brief description 27
Transition to an Asian (Far Eastern) basis 29
The dual system 30
Cotton in the Doha Development Agenda 31
Chapter 2
Cotton value addition 35
Impact of varieties and production practices on cotton quality 35 Varieties 35 Harvesting 35 Seed cotton storage and handling 36 Cotton ginning machinery 37 Seed cotton unloading 38 Feed control 38 Drying 38 Seed cotton cleaning 39 Gin stands 39 Roller-type gins 40 Lint cleaners 40 Moisture restoration 41 Packaging lint cotton 41 Effect of gin machinery on cotton quality 41
The impact of cotton fibre properties on textile processing performance, quality and costs 42 Micronaire 46 Maturity 47 Fineness 48 Length and length uniformity 48 Strength 49 Elongation 49 Colour 50 Preparation 50 Neps 50 Trash (non-lint) content 51 Wax content 51 Friction 51 Ultra-violet fluorescence 52 Dyeability 52 Stickiness 52 Crimp and bulk 52 Stiffness, elasticity, modulus and work-to-break 53
Neps and short fibres 53 Nature of neps and short fibres 53
Neps 53 Short fibres 54
Xlll
The AF1S® instrument 56
Conclusion 56
Extraneous contamination in cotton 57
What is the acceptable contamination level for the end-user of yarn and cloth? 57
Steps towards minimizing contamination 57
Manual contaminant cleaning at PT Apac, Indonesia 58
What proportions of bales from different origins are contaminated? 59
Fibrous and non-fibrous extraneous contamination in cotton bales 64
Electronic gadgets in the spinning process for removal of contamination 65
Blow room 65
Winding 65
Effect of the initial level of fibrous contamination in bales on residual level in yarn 65
Best solution: Solve the contamination problem at the origin 65
Conclusion 66
Grade standards 67
Preparation 69
Instrument standards 70
Calibration of instruments 71
Harmonization of rapid machine testing of fibre quality 76
Understanding HVI and how to make it serve a global market 76
Implications for national HVI systems 79
Conclusion 80
Bale cover materials 83
Combing 86 Roving 86 Spinning 87
Fabric formation 89 Woven fabric 89 Knitted fabric 90 Nonwovens 91
Chapter 3
Cot ton market ing 92
Contracts 92 The essential value of a well written contract 92 Variations and amendments to the contract 93 In the event of disputes 93 Appointment of an agent 93
Standard contractual terms 94 Quality - terms of valuation 94 Growth and quality 95 Quantity 96 Price and terms 96 Weight basis 96 Payment 97 Shipment 99 Freight - shipments by vessel 100 Insurance 100 Special clauses 101 Reverse side of the contract 'conditions' 101
Main trade (logistical) terms and parties' obligations 101 Documentation 102 Claims 104
Scope and validity of an offer or bid 104 Arbitration 105
General principles and aims of arbitration 105 Disputes addressed by ICA arbitration 106
Physical or mechanical tested characteristics of the cotton fibre 106 Technical arbitration - dealing with the written aspects of the contract 106
The commencement of arbitration and formalities 106 Appointment of arbitrators 107 Conducting the arbitration 107 The arbitration award 107 Appeal against an arbitration award 108 Failure to comply with an award 109
Promotion of good trading practice 109 The European Cotton Rules 109 Documentation ('back office') 110
Letters of credit 110 Payment: credit policy 110 Shipping advice 111 Delayed shipments 111
The bill of lading 112 Title to and endorsement of a bill of lading 113 Dispatching bills of lading 113 Certificates of origin 114
XV
Insurance certificates 114 Other certificates 114 Missing and incorrect documents 114
Electronic paperwork 115 Paperwork - what paperwork? 115 Why do we need this amount of paper? 115 How can electronic paperwork assist me? 116 The electronic revolution 117 How secure is electronic paperwork? 118
Logistics 122 Freight 122
Shipping 122 Shipping in containers 125 Ocean freight rates 126
Controlling 128 Pre-shipment 130
Supervision of loading 130 Post-landed 130 Warehouse inspections 130
Who appoints the controller? 130 Pre-shipment 130 Post-landed 131
ICA Rules and Bylaws 131 Other pre-shipment services 132 Post-landed weighing 132 Bale by bale weighing 132 Weighbridge weighing 133 Taring 133 Arbitration sampling, micronaire sampling and sampling for strength 134
Arbitration sampling 135 Micronaire sampling 135 Sampling for strength 136 General 138 Surveying 139
The role of banks in cotton export finance 140 Transactional finance 141
Principal credit standards 141 Mitigation of the buyer's payment risk 141
Advance payments or export pre-finance 143 Advance payment guarantee 143 Red clause letter of credit , 143
Warehouse receipt systems 144 What are warehouse receipt systems? 144
Unregulated warehouse receipt systems 145 Transaction cycle under an unregulated WRS for cotton 145 The regulated warehouse receipt system 146
Insurance in an uncertain world 149 Risk 149 Indemnity 150 Utmost good faith 150 Types of insurance cover to protect your business 150
Insurance through the stages of the cotton production process 150 Exclusions . 152
When do I become liable? The attachment and termination of risk 152
Other important considerations 152
Available structures for your insurance cover 153
Glossary of basic insurance definitions 153
Risk management - A cotton supply chain manager's perspective 154
Risk 154
Risk measurement 156
Price charts - Cotlook A Index and New York Cotton Futures 157
Stress testing 158
Back testing 158
Counterparty risk 159
Producing countries, trading countries, and consuming countries 160
International, national, state and private sector promotion programmes 161
Generic and branded cotton promotion 1 61
Demand enhancement vs. promotion 162
Export focused promotion and domestic promotion 163
The cost of cotton promotion 164
High cost promotion activities 164
Medium cost promotion activities 164
Low cost promotion activities 164
Promotion strategy 165
Annex - ICA model contract 167
Chapter 4
The changing role of cotton merchants 173
Cotton exports and Internet trading 174
Cotton exports and Internet auctions: a case study 1 75
Internet auctions 175
Strategies and effects 176
Two markets 1 78
Price risk 1 79
Price quality 1 80
Clearing house 1 81 Trading 181 Supervision and regulation 182
The former NYBOT and now ICE Futures U.S. cotton marketplace 182 Cotton forward contracts 182 Futures and options contracts 183 The fundamentals of cotton supply and demand 186 Electronic trading of futures contracts 188
Other futures markets 189 Brazil 189
The recent cotton contract 1 89
China 190 The Zhengzhou Commodity Exchange 190
India 191 The recent cotton contract 191
Trading in futures 193
Overview 193
Floor procedure 193 Delivery 193 Offsetting transactions 193 Futures prices 194 Differences between forward and futures market prices 194 Types of orders 195 Positions 195 Margins 196 Financing margins 196
Technical analysis of futures markets 196 Open interest and volume of operations 197 Volume of operations 1 98 Relationship between open interest, volume and price 198 Charting 199
Hedging and market systems 200 Risk considerations 200
Price risk 200 Basis risk 201 Counterparty risk 201 Currency risk 201 Financial risk 201 Government risk 201
Hedging with futures contracts 201
Hedging with options 204
Call options 204 Put options • 204 Using options 204 Guaranteed minimum price contract 204 Guaranteed maximum price contract 205
Trading physicals at a price to be fixed 206
Guaranteed minimum price contracts 207 The purpose of the guaranteed minimum price contract 207 When to use the guaranteed minimum price contract 207 The advantages of the guaranteed minimum price contract 208 The disadvantages of the guaranteed minimum price contract 208 The workings of a guaranteed minimum price contract 208 How to value insurance premium 208 A practical example 209 Conclusion 209
XVlll
ELS cotton production 215
ELS cotton exports 215
ELS cotton consumption 216
ELS cotton flourishes in niche markets 2 16
Organic cotton: an opportunity for trade 217
Organic cotton 217
Organic and fair trade 221
The organic cotton market 221
The history of organic cotton production 22 1
Trends in the 1990s 221
Trends between 2000 and 2005 222
Organic cotton production 223
Organic cotton consumption 225
Organic cotton processing 227
Pricing and positioning 229
United States of America 231
Switzerland 232
Germany 232
Arguments against expanding organic cotton 236
Opportunities 238
Threats 240
Conclusions 241
Infrastructure of the organic cotton market 243
Opportunities for cotton ginners and exporters 243
Chapter 6
The structure and characteristics of the domestic cotton market 245
Future market developments - demand and supply forecasts 245
Supply and demand in the national market 245
Yarn supply situation and future demand 246
What kind of cotton is supplied from abroad, and from which countries? 246
Imports of cotton into Bangladesh 247
Development of imports in the last five years 247
Prices 248
Specific cotton quality requirements of the domestic textile industry 249
Cotton import procedures in Bangladesh 249
Recommendations for LDC cotton exporters on increasing exports to Bangladesh 250
China 251
The structure and characteristics of the domestic cotton market: a macro view 251
Importance of cotton in Chinese textiles 25 1
Domestic cotton 25 1
Domestic cotton market 252
Supply and demand in the national market 253
Specific cotton quality requirements of the domestic textile industry 253
Import developments 254
Non-tariff requirements in the domestic market 257
Customs procedures 257
Packaging, marketing, labelling and specific domestic business practices 258
Expected market developments 260
Different players in the market 260
Specific cotton contracts 260
Use of e-commerce and ICT for procurement 261
Consumer preference for specific fibre types and blending 261
Shandong Weiqiao Pioneering Group: case study of a large national cotton consumer 261
Possible niche markets and product groups to be targeted 262
Recommendations for LDC cotton exporters for penetrating the Chinese market 262
Detailed rules for quota management of cotton imports in China 263
Chronology of policies and events related to China's cotton import quota 264
India 266
The structure and characteristics of the domestic cotton market 266
Importance of cotton in Indian textiles 266
National cotton production 266
The domestic cotton market 267
Quality of cotton supplied by the domestic industry, and imports 267
Supply and demand in the national market 268
Specific cotton quality requirements of the domestic textile industry 268
Analysis of import tariff structure 269
Non-tariff requirements in the domestic market 269
Cotton import procedure 269
Special import regulations 269
Customs procedures 269 Freight forwarding and transport requirements 270 Packaging, marketing, labelling and specific domestic business practices 270
Expected market developments 270 The domestic market: a micro view 270
Different players in the market 270 Specific cotton contracts used in the market 271 Cotton finance and payment regulations 271 Use of e-commerce and ICT for procurement 272 Consumer preference for specific fibre types and blending 272
Large national cotton consumers 272 Possible niche markets and product groups to be targeted 272 Existing national support schemes 273 Recommendations for LDC cotton exporters on increasing exports to India 273
Indonesia 274 The Indonesian textile industry: a macro view 274 Supply and demand in the national market 274
Domestic cotton production 274 The Indonesian spinning sector 274 Future demand 275
Imports of cotton into Indonesia 275 Cotton import procedures in Indonesia 276 Selling practices 277 Recommendations for LDC cotton exporters on increasing exports to Indonesia 277
Pakistan 279 The structure and characteristics of the domestic cotton market 279
The importance of cotton in Pakistan's economy 279 National production 280 Market size and prices 280 Cotton qualities supplied by the domestic industry and from abroad 281 Supply and demand in the national market 282
An analysis of the tariff structure of imports 282 Non-tariff requirements in the domestic market 283
Customs procedures 283 Specific domestic business practice 284
Expected market developments 284 The domestic market: a micro view 284
The players in the market 284 Cotton procurement practices 285 Specific cotton contracts used in the market 285 Cotton finance and payment requirements 285 Consumer preferences for specific fibre types and blending 285
Preferences of large national cotton consumers 285 Local spinners' recommendations on how best to penetrate the domestic market 286 Organic cotton 286 Recommendations for LDC cotton exporters on increasing exports to Pakistan 286
Thailand 287 The structure and characteristic of the Thai cotton market: a macro view 287
Importance of cotton in Thailand 287 Domestic cotton production 287 Government encouragement 288 Domestic pricing structure 288 Import structure 288
XXI
Tariff and non-tariff requirements in the domestic market 290 Taxation 290 Cotton import requirements 290 Actual import procedure 291
Expected market developments 292 Case studies of large national cotton consumers 292 In-depth interviews on penetrating the Thai cotton market 293
Company A 293 Company B 294 Company C 295
Turkey 295 The structure and characteristics of the domestic cotton market: a macro view 296
Market size and prices 296 Cotton qualities supplied by the domestic industry 297 National production 299 Specific cotton quality requirements of the domestic textile industry 299
Analysis of the tariff structure of imports 299 Non-tariff requirements in the domestic cotton market 299 Expected market developments: demand and supply forecasts and future market prospects 300 The domestic market: a micro view 300
Different players in the market 300 Cotton procurement practices in the market 302 Specific cotton contracts used in the market 302 Cotton finance and payment regulations 302 Consumer preferences for specific fibre types and blending 303
Case studies of large national cotton consumers 303 Company 1: Beyteks 303 Company 2: Menderes Tekstil A.§. 304 Company 3: Iskur A.§. 305 Company 4: Kipas, Holding 306
Possible niche markets and product groups to be targeted 307 Existing national support schemes that could be utilized to assist cotton-exporting LDCs to penetrate the Turkish market " 307 Recommendations to LDC cotton exporters for promoting exports to Turkey 307 Cotton classification parameters in Turkey 308
Annex - Useful addresses 311
Appendices I. International cotton associations 323 II. Conversion factors 328 III. Useful websites 331
Tables 1.1 Share of cotton in product exports from selected African countries 16
2.1 Order of importance of fibre properties for different spinning systems 45 2.2 Extraneous contamination by origin (2006-2007 averages) as experienced
The world cotton market 3 Overview 3
Production 4 Production trends 5 Africa in perspective 6 Trends in mill use of fibre 7 Expansion of retail cotton use 8 Retail cotton consumption 8 Mill consumption 9 Inter-fibre competition 10 Long-term projections for textile fibre consumption 11 Trade 11 Biotech cotton in world textile trade 14 Government measures 14
The importance of cotton in world trade 16 Cotton prices 17
Cotton prices measured at many levels 17 Influence of time on prices 18
Spot sales and purchases 18 Forward cash sales and purchases 18 On-call sales and purchases 18 Marketing pools 19
Influence of location and quality on prices 19 Cotton and competing crop prices 20 Structural changes leading to lower real world cotton prices 21 Technology 22 Polyester 22 Prices of cotton yarn 23 Retail prices for clothes 24
Xll
Futures markets 24
Relationship between New York futures and the Cotlook A Index 25
Modeling cotton prices 25
Expectations of accuracy 27
The Cotlook Indices 27
A brief description 27
Transition to an Asian (Far Eastern) basis 29
The dual system 30
Cotton in the Doha Development Agenda 31
Chapter 2
Cotton value addition 35
Impact of varieties and production practices on cotton quality 35 Varieties 35 Harvesting 35 Seed cotton storage and handling 36 Cotton ginning machinery 37 Seed cotton unloading 38 Feed control 38 Drying 38 Seed cotton cleaning 39 Gin stands 39 Roller-type gins 40 Lint cleaners 40 Moisture restoration 41 Packaging lint cotton 41 Effect of gin machinery on cotton quality 41
The impact of cotton fibre properties on textile processing performance, quality and costs 42 Micronaire 46 Maturity 47 Fineness 48 Length and length uniformity 48 Strength 49 Elongation 49 Colour 50 Preparation 50 Neps 50 Trash (non-lint) content 51 Wax content 51 Friction 51 Ultra-violet fluorescence 52 Dyeability 52 Stickiness 52 Crimp and bulk 52 Stiffness, elasticity, modulus and work-to-break 53
Neps and short fibres 53 Nature of neps and short fibres 53
Neps 53 Short fibres 54
Xlll
The AF1S® instrument 56
Conclusion 56
Extraneous contamination in cotton 57
What is the acceptable contamination level for the end-user of yarn and cloth? 57
Steps towards minimizing contamination 57
Manual contaminant cleaning at PT Apac, Indonesia 58
What proportions of bales from different origins are contaminated? 59
Fibrous and non-fibrous extraneous contamination in cotton bales 64
Electronic gadgets in the spinning process for removal of contamination 65
Blow room 65
Winding 65
Effect of the initial level of fibrous contamination in bales on residual level in yarn 65
Best solution: Solve the contamination problem at the origin 65
Conclusion 66
Grade standards 67
Preparation 69
Instrument standards 70
Calibration of instruments 71
Harmonization of rapid machine testing of fibre quality 76
Understanding HVI and how to make it serve a global market 76
Implications for national HVI systems 79
Conclusion 80
Bale cover materials 83
Combing 86 Roving 86 Spinning 87
Fabric formation 89 Woven fabric 89 Knitted fabric 90 Nonwovens 91
Chapter 3
Cot ton market ing 92
Contracts 92 The essential value of a well written contract 92 Variations and amendments to the contract 93 In the event of disputes 93 Appointment of an agent 93
Standard contractual terms 94 Quality - terms of valuation 94 Growth and quality 95 Quantity 96 Price and terms 96 Weight basis 96 Payment 97 Shipment 99 Freight - shipments by vessel 100 Insurance 100 Special clauses 101 Reverse side of the contract 'conditions' 101
Main trade (logistical) terms and parties' obligations 101 Documentation 102 Claims 104
Scope and validity of an offer or bid 104 Arbitration 105
General principles and aims of arbitration 105 Disputes addressed by ICA arbitration 106
Physical or mechanical tested characteristics of the cotton fibre 106 Technical arbitration - dealing with the written aspects of the contract 106
The commencement of arbitration and formalities 106 Appointment of arbitrators 107 Conducting the arbitration 107 The arbitration award 107 Appeal against an arbitration award 108 Failure to comply with an award 109
Promotion of good trading practice 109 The European Cotton Rules 109 Documentation ('back office') 110
Letters of credit 110 Payment: credit policy 110 Shipping advice 111 Delayed shipments 111
The bill of lading 112 Title to and endorsement of a bill of lading 113 Dispatching bills of lading 113 Certificates of origin 114
XV
Insurance certificates 114 Other certificates 114 Missing and incorrect documents 114
Electronic paperwork 115 Paperwork - what paperwork? 115 Why do we need this amount of paper? 115 How can electronic paperwork assist me? 116 The electronic revolution 117 How secure is electronic paperwork? 118
Logistics 122 Freight 122
Shipping 122 Shipping in containers 125 Ocean freight rates 126
Controlling 128 Pre-shipment 130
Supervision of loading 130 Post-landed 130 Warehouse inspections 130
Who appoints the controller? 130 Pre-shipment 130 Post-landed 131
ICA Rules and Bylaws 131 Other pre-shipment services 132 Post-landed weighing 132 Bale by bale weighing 132 Weighbridge weighing 133 Taring 133 Arbitration sampling, micronaire sampling and sampling for strength 134
Arbitration sampling 135 Micronaire sampling 135 Sampling for strength 136 General 138 Surveying 139
The role of banks in cotton export finance 140 Transactional finance 141
Principal credit standards 141 Mitigation of the buyer's payment risk 141
Advance payments or export pre-finance 143 Advance payment guarantee 143 Red clause letter of credit , 143
Warehouse receipt systems 144 What are warehouse receipt systems? 144
Unregulated warehouse receipt systems 145 Transaction cycle under an unregulated WRS for cotton 145 The regulated warehouse receipt system 146
Insurance in an uncertain world 149 Risk 149 Indemnity 150 Utmost good faith 150 Types of insurance cover to protect your business 150
Insurance through the stages of the cotton production process 150 Exclusions . 152
When do I become liable? The attachment and termination of risk 152
Other important considerations 152
Available structures for your insurance cover 153
Glossary of basic insurance definitions 153
Risk management - A cotton supply chain manager's perspective 154
Risk 154
Risk measurement 156
Price charts - Cotlook A Index and New York Cotton Futures 157
Stress testing 158
Back testing 158
Counterparty risk 159
Producing countries, trading countries, and consuming countries 160
International, national, state and private sector promotion programmes 161
Generic and branded cotton promotion 1 61
Demand enhancement vs. promotion 162
Export focused promotion and domestic promotion 163
The cost of cotton promotion 164
High cost promotion activities 164
Medium cost promotion activities 164
Low cost promotion activities 164
Promotion strategy 165
Annex - ICA model contract 167
Chapter 4
The changing role of cotton merchants 173
Cotton exports and Internet trading 174
Cotton exports and Internet auctions: a case study 1 75
Internet auctions 175
Strategies and effects 176
Two markets 1 78
Price risk 1 79
Price quality 1 80
Clearing house 1 81 Trading 181 Supervision and regulation 182
The former NYBOT and now ICE Futures U.S. cotton marketplace 182 Cotton forward contracts 182 Futures and options contracts 183 The fundamentals of cotton supply and demand 186 Electronic trading of futures contracts 188
Other futures markets 189 Brazil 189
The recent cotton contract 1 89
China 190 The Zhengzhou Commodity Exchange 190
India 191 The recent cotton contract 191
Trading in futures 193
Overview 193
Floor procedure 193 Delivery 193 Offsetting transactions 193 Futures prices 194 Differences between forward and futures market prices 194 Types of orders 195 Positions 195 Margins 196 Financing margins 196
Technical analysis of futures markets 196 Open interest and volume of operations 197 Volume of operations 1 98 Relationship between open interest, volume and price 198 Charting 199
Hedging and market systems 200 Risk considerations 200
Price risk 200 Basis risk 201 Counterparty risk 201 Currency risk 201 Financial risk 201 Government risk 201
Hedging with futures contracts 201
Hedging with options 204
Call options 204 Put options • 204 Using options 204 Guaranteed minimum price contract 204 Guaranteed maximum price contract 205
Trading physicals at a price to be fixed 206
Guaranteed minimum price contracts 207 The purpose of the guaranteed minimum price contract 207 When to use the guaranteed minimum price contract 207 The advantages of the guaranteed minimum price contract 208 The disadvantages of the guaranteed minimum price contract 208 The workings of a guaranteed minimum price contract 208 How to value insurance premium 208 A practical example 209 Conclusion 209
XVlll
ELS cotton production 215
ELS cotton exports 215
ELS cotton consumption 216
ELS cotton flourishes in niche markets 2 16
Organic cotton: an opportunity for trade 217
Organic cotton 217
Organic and fair trade 221
The organic cotton market 221
The history of organic cotton production 22 1
Trends in the 1990s 221
Trends between 2000 and 2005 222
Organic cotton production 223
Organic cotton consumption 225
Organic cotton processing 227
Pricing and positioning 229
United States of America 231
Switzerland 232
Germany 232
Arguments against expanding organic cotton 236
Opportunities 238
Threats 240
Conclusions 241
Infrastructure of the organic cotton market 243
Opportunities for cotton ginners and exporters 243
Chapter 6
The structure and characteristics of the domestic cotton market 245
Future market developments - demand and supply forecasts 245
Supply and demand in the national market 245
Yarn supply situation and future demand 246
What kind of cotton is supplied from abroad, and from which countries? 246
Imports of cotton into Bangladesh 247
Development of imports in the last five years 247
Prices 248
Specific cotton quality requirements of the domestic textile industry 249
Cotton import procedures in Bangladesh 249
Recommendations for LDC cotton exporters on increasing exports to Bangladesh 250
China 251
The structure and characteristics of the domestic cotton market: a macro view 251
Importance of cotton in Chinese textiles 25 1
Domestic cotton 25 1
Domestic cotton market 252
Supply and demand in the national market 253
Specific cotton quality requirements of the domestic textile industry 253
Import developments 254
Non-tariff requirements in the domestic market 257
Customs procedures 257
Packaging, marketing, labelling and specific domestic business practices 258
Expected market developments 260
Different players in the market 260
Specific cotton contracts 260
Use of e-commerce and ICT for procurement 261
Consumer preference for specific fibre types and blending 261
Shandong Weiqiao Pioneering Group: case study of a large national cotton consumer 261
Possible niche markets and product groups to be targeted 262
Recommendations for LDC cotton exporters for penetrating the Chinese market 262
Detailed rules for quota management of cotton imports in China 263
Chronology of policies and events related to China's cotton import quota 264
India 266
The structure and characteristics of the domestic cotton market 266
Importance of cotton in Indian textiles 266
National cotton production 266
The domestic cotton market 267
Quality of cotton supplied by the domestic industry, and imports 267
Supply and demand in the national market 268
Specific cotton quality requirements of the domestic textile industry 268
Analysis of import tariff structure 269
Non-tariff requirements in the domestic market 269
Cotton import procedure 269
Special import regulations 269
Customs procedures 269 Freight forwarding and transport requirements 270 Packaging, marketing, labelling and specific domestic business practices 270
Expected market developments 270 The domestic market: a micro view 270
Different players in the market 270 Specific cotton contracts used in the market 271 Cotton finance and payment regulations 271 Use of e-commerce and ICT for procurement 272 Consumer preference for specific fibre types and blending 272
Large national cotton consumers 272 Possible niche markets and product groups to be targeted 272 Existing national support schemes 273 Recommendations for LDC cotton exporters on increasing exports to India 273
Indonesia 274 The Indonesian textile industry: a macro view 274 Supply and demand in the national market 274
Domestic cotton production 274 The Indonesian spinning sector 274 Future demand 275
Imports of cotton into Indonesia 275 Cotton import procedures in Indonesia 276 Selling practices 277 Recommendations for LDC cotton exporters on increasing exports to Indonesia 277
Pakistan 279 The structure and characteristics of the domestic cotton market 279
The importance of cotton in Pakistan's economy 279 National production 280 Market size and prices 280 Cotton qualities supplied by the domestic industry and from abroad 281 Supply and demand in the national market 282
An analysis of the tariff structure of imports 282 Non-tariff requirements in the domestic market 283
Customs procedures 283 Specific domestic business practice 284
Expected market developments 284 The domestic market: a micro view 284
The players in the market 284 Cotton procurement practices 285 Specific cotton contracts used in the market 285 Cotton finance and payment requirements 285 Consumer preferences for specific fibre types and blending 285
Preferences of large national cotton consumers 285 Local spinners' recommendations on how best to penetrate the domestic market 286 Organic cotton 286 Recommendations for LDC cotton exporters on increasing exports to Pakistan 286
Thailand 287 The structure and characteristic of the Thai cotton market: a macro view 287
Importance of cotton in Thailand 287 Domestic cotton production 287 Government encouragement 288 Domestic pricing structure 288 Import structure 288
XXI
Tariff and non-tariff requirements in the domestic market 290 Taxation 290 Cotton import requirements 290 Actual import procedure 291
Expected market developments 292 Case studies of large national cotton consumers 292 In-depth interviews on penetrating the Thai cotton market 293
Company A 293 Company B 294 Company C 295
Turkey 295 The structure and characteristics of the domestic cotton market: a macro view 296
Market size and prices 296 Cotton qualities supplied by the domestic industry 297 National production 299 Specific cotton quality requirements of the domestic textile industry 299
Analysis of the tariff structure of imports 299 Non-tariff requirements in the domestic cotton market 299 Expected market developments: demand and supply forecasts and future market prospects 300 The domestic market: a micro view 300
Different players in the market 300 Cotton procurement practices in the market 302 Specific cotton contracts used in the market 302 Cotton finance and payment regulations 302 Consumer preferences for specific fibre types and blending 303
Case studies of large national cotton consumers 303 Company 1: Beyteks 303 Company 2: Menderes Tekstil A.§. 304 Company 3: Iskur A.§. 305 Company 4: Kipas, Holding 306
Possible niche markets and product groups to be targeted 307 Existing national support schemes that could be utilized to assist cotton-exporting LDCs to penetrate the Turkish market " 307 Recommendations to LDC cotton exporters for promoting exports to Turkey 307 Cotton classification parameters in Turkey 308
Annex - Useful addresses 311
Appendices I. International cotton associations 323 II. Conversion factors 328 III. Useful websites 331
Tables 1.1 Share of cotton in product exports from selected African countries 16
2.1 Order of importance of fibre properties for different spinning systems 45 2.2 Extraneous contamination by origin (2006-2007 averages) as experienced