· Although more than 100 countries plant cotton, both production and trade are relatively concentrated in a few countries.
· World cotton production increased by 62 percent since 1970 for three major reasons: the emergence of new producers, expansion by existing producers, and increase in yields.
· Some major producers such as Australia emerged since 1970.
· Others such as China, India and Brazil saw their yield nearly double.
· In 2001/02, two major producers, the United States and China accounted for 43 percent of total output in the world.
· Nearly 90 percent of world production was from 9 countries.
· Adoption of transgenic cotton and significant extension of the area under cotton in Brazil and Turkey may have significant effect on world production in future.
· The adoption of biotech cotton reached 16 percent of world total production area in 2001 and production costs in some of these new areas are believed to be lower than the current world market price.
· World cotton exports currently about 6 million tonnes, 30 percent of world production.
· The United States, Former USSR, Australia and EC account for nearly 65 percent of world exports.
· EC, China, Indonesia, Mexico, Former USSR, Turkey, Thailand and Korean Republic account for 62 percent of world imports.
· Trade in textiles is the major force driving cotton imports and exports.
· Developed countries are the major cotton exporters.
· Countries in Asia accounted for more than one-third of world imports in 2001/02.
Production, exports and food security
· Cotton production generates cash income for millions of rural households.
· More than 20 million rural households in China and 10 million in India and Pakistan produce cotton.
· Cotton textiles contribute to employment, food imports and trade balance in many developing countries.
Trade restrictions, domestic supports and world prices
· There are no significant restrictions in trade in raw cotton.
· Domestic support and export subsidies in major producing and exporting countries affect production and trade, and contributed to the lower world price over recent years.
· In 2000, world cotton prices dropped to a record low of about US$0.45 per pound (A Index).
· Domestic support policies, advances in technology including bio-tech cotton, weak demand, emergence of low cost producers and competition from man-made fibres, are responsible for the low prices.
Deflated Cotton Prices Indices 1970-2001
Cotton Exports Quantity by Major Exporters
Cotton Production by Major Producers
Cotton Exports Values by Major Exporters
Cotton Consumption by Major Consumers
· Developing countries are major producers and exporters while developed countries are importers.
· Production is highly concentrated in a very few countries.
· Production is labour intensive.
· Production has grown steadily from around 3 million tonnes in early 1970s to 7 million tonnes in 2001.
· Six countries account for nearly 84 percent of world output.
· The growth in world average yield was less than 50 percent during past 30 years but some countries saw their yield rising very substantially.
· Production has shifted to the low cost producing countries.
· Emerging new producers include Thailand, Vietnam and some African countries.
· Malaysia, the worlds largest producing country in 1970s and 1980s, now produces one third of former level.
· World trade accounts for more than 70 percent of global production.
· Thailand, Indonesia, Vietnam and Malaysia account for 80 percent of exports.
· A large proportion of natural rubber is used for tyres.
· Demand for vehicles induced by economic growth is major driving force for imports.
· Sixty-nine percent of imports go to the United States, China, Japan, Korea Republic, Germany, and France.
Exports and food security
· Export revenue from natural rubber contributes significantly to total agricultural export revenue in producing countries.
· As a result, revenue from rubber exports were the important source of cash income for millions of rural household in these countries.
· In 1999, the share of rubber in total agricultural export revenue was 93 percent in Liberia 77 percent in Cambodia, 17 percent in Indonesia, 16 percent in Thailand, 8 percent in Malaysia, 10 percent in Vietnam and 16 percent in Nigeria.
Trade restrictions, domestic supports and world prices
· There are no significant trade restrictions on rubber.
· However, tariffs on automobiles have indirect effects on rubber trade.
· The International Natural Rubber Organisation supported stable and higher prices to exporting countries using a buffer stock.
· The agreement collapsed in 2000 in the face of changes in comparative advantage among producing countries, exchange rate fluctuations and sharp decline in world prices.
· Over the past few decades, the world price of rubber has weakened.
· Countries with higher production costs have reduced their production and shifted to other cash crops.
· To combat the low prices, several major producing countries, including Thailand, Indonesia and Malaysia, recently agreed to control both production and export.
Deflated Natural Rubber Prices 1970-2001. London RSS1 cif
Rubber Consumption by Major Consumers
Exports Value of Natural Rubber by Major Exporters
Production of Natural Rubber by Major Producers
Exports Quantity of Natural Rubber by Major Exporters
· Jute ranks next to cotton as the most important renewable natural fibre in terms of volume of production.
· The commonest item manufactured is the gunny bag.
· Jute in the form of closely woven hessian is made into deck covers, hammocks, tarpaulins, and upholstery fabric, and is used as underlay of linoleum and carpets.
· Uses are being diversified in making varieties of products like fashionable carrier bags, kit bags, rucksacks and hand bags. Jute laminated or mixed with plastic is being used to produce products as substitutes for wood. It can also be used to produce paper pulp.
Pattern of production
· World raw jute production averaged 3.4 million tonnes a year during the 1970 to 2000 period. it is produced mainly in the Asian region with Bangladesh and India accounting for over 95 percent.
· In the major producing countries jute remains a major cash crop and it is grown by 10 to 12 million small and marginal, providing employment to hundreds of thousands of other people in the processing, manufacturing, trading and transportation of jute and jute products.
· Jute-based agriculture is highly labour intensive.
Pattern of consumption and trade
· World consumption of jute averaged approximately 3.4 million tonnes during the period 1970 to 2000.
· Over the last 30 years, the growth in jute consumption slowed substantially because of the introduction of bulk handling of goods in transportation and storage and the development of synthetic substitutes.
· Trade in both fibre and products contracted sharply over the last 30 years following concentration of consumption in the major producing countries.
· Exports of jute in the form of fibres and products have fallen to about 1.1 million tonnes at present against about 2.0 million tonnes in early 1970s.
· Only about 35 percent of the world production of jute now enters the world trade which generates some US$500 000 per year.
· Main export market for raw jute is Pakistan and that of products is the European Union followed by the Near East countries.
Economic and institutional structure
· Use of jute has been mandatory for some uses in some producing countries.
· Some countries allow price support for its production.
· Jute and hard fibres and products are covered under the Agreement on Textiles and Clothing, not under the AoA.
Production of Jute - '000 tonnes
JUTE - Deflated Price (US$ = 1990)
Year 2000 - Jute: Export Value (Million US $)
Jute Apparent Consumption - '000 tonnes
· Hides and skins are produced as by-products of the meat industry.
· Value is secondary to meat, and the income accrues more to processors than to farmers.
· Considerable employment is generated in processing and manufacturing.
· Their output is virtually totally inelastic to changes in demand.
· This commodity group is characterized by its extreme heterogeneity.
· Further magnified by the existence of numerous intermediate processing stages.
· Raw and processed hides and skins enter international trade in a variety of forms from air dried pelts to finished leather.
Production and trade patterns
· In past two decades, world output of bovine hides and skins rose by about 1 percent per annum.
· Output of raw hides has grown strongly in developing countries, while it contracted in most developed regions..
· Developing countries account for more than 50 percent of the world production of bovine hides.
· The four largest producers account for more than 40 percent of the world total.
· The Far East now produces more than any other region.
· Developing countries became net importers of raw bovine hides and skins in the early seventies, having previously been net exporter, their tanning and leather manufacturing expanded.
· Some major producers of hides and skins, such as India, Pakistan and Thailand, also import considerable volumes of raw hides to produce leather.
· Developed countries in aggregate changed from net importer to net exporter of cattlehides in 1970s.
· International prices of most types of hides and skins reached a low in 1999 as a result of weakened demand, recovered in 2000 and 2001 as demand for leather and leather products strengthened in major consuming countries.
· A major trade issue is the existence of export restrictions in many countries seeking to protect domestic tanning industries.
· Thus supply to potential importing/processing countries is reduced.
· Tanning industry can be highly polluting.
· The cost of meeting environmental standards is one reason for shift of activity from developed to developing countries.
· Discussion of a proposal for an industry-wide international ecolabelling scheme has not borne fruit.
· These products and leather are covered under the general provisions of the GATT.
· AoA has indirect implications for the sector through its implications for meat and dairy policies.
· No import tariffs are applied to raw hides and skins.
· Tariff escalation is an issue for leather and leather products - finished leather, leather bags, leather shoes etc. carry high tariffs in some countries.
· Trade-weighted average tariffs in developed countries are around 5 percent for leather and around 8 percent for leather products, although in some cases tariffs on footwear have been as high as 80 percent.
· Direct export subsidies/refunds are little used in the sector.
· Export prohibitions and taxes are used in a number of developing countries.
· Restrictions on export of raw hides and skin, wet blue and crust, are typically imposed in order to protect domestic industries, but reduce the incentive to supply good quality raw material.
Real Price Indices 1992-2001. Hides and Skins
Hides and Skins Exports Values by Major Exporters Average 1997-99
Bovine Hides and Skins Production by Major Producers
Bovine Hides and Skins Availability by Major Consumers
Sheepskins Production by Major Producers
Sheepskins Availability by Major Consumers
Goatskins Production by Major Producers
Goatskins Availability by Major Consumers
· There are three major hard fibres - sisal and henequen, abaca, coir - and a number of minor hard fibres.
· Sisal is used primarily for harvest twine, but other uses are becoming relatively more important.
· Abacas main market is for specialty papers.
· Coir is used for floor coverings, rubberized pads for upholstery, car seats, etc, and mattresses.
· African countries account for 30 percent of the world's sisal production, essentially on single crop estates.
· In Brazil farmers produce sisal as part of a mixed agricultural system.
· Abaca is grown largely in the Philippines as a secondary crop.
· Coir is produced by processors as a by-product of oil, copra, desiccated coconut, etc.
· These fibres provide significant economic support to the population in certain impoverished and least-developed areas of a number of producing countries, and exports provide income vital for food purchases by people who, in many cases, are among the poorest.
Production and trade patterns
· Total export values of fibre and products in 2000 amounted to US$310 million,
· of which sisal amounted to US$108 million, abaca US$96 million, and coir US$105 million;
· Exports, excluding re-exports, are entirely from developing countries, and largely to developed countries.
· Major exporters are:
Sisal: Brazil, Kenya, Tanzania
Abaca: Philippines, Ecuador
Coir: Sri Lanka, India
· Hard fibres are generally traded through networks of private and some governmental traders. None is sold in a centralised market.
· Trade in fibres is generally unhindered by trade policy, and any tariffs on manufactured goods are low.
· The Intergovernmental Group on Hard Fibres is the only relevant international body.
· Hard fibres and products are covered under the Agreement on Textiles and Clothing, not under the Agreement on Agriculture. Other general provisions of the GATT apply to these products.
· Fibres are generally traded freely, but some countries apply tariffs on processed fibre products.
· There are generally no export restrictions.
· Fibre producers and processors have suffered from reduced levels of employment and incomes as a result of the weakening of the market for hard fibres in recent decades. In response industries are seeking alternative new outlets for fibres.
· Sisal and coir, still largely dependant on traditional applications, are moving towards use in geotextiles, in pulping applications, and in use in various composite materials used particularly in automobile manufacturing.
· Abaca, once used almost entirely for cordage, now has a strong market for pulping for various speciality papers.
Production of Sisal/Henequen - 000 tonnes
Production of Abaca - 000 tonnes
Production of Coir - 000 tonnes
Year 2000 - Sisal: Export Value
Year 2000 - Abaca: Export Value
Year 2000 - Coir: Export Value
SISAL - Deflated Prices (US$ = 1990)
ABACA - Deflated Prices (US$ = 1990)
Imports of Sisal - Year 2000
Imports of Abaca - Year 2000
Imports of Coir - Year 2000