Brazilian cotton seeks larger slice of Chinese market
Business and Markets |
The Brazilian Cotton Growers Association has sealed a partnership deal with the China National Cotton Exchange, signaling its willingness to meet the demands of the Chinese industrial sector.
In the last five years, Brazil has increased its cotton exports to the Chinese market by more than fifteen-fold. The aim for the Brazilian Cotton Growers Association (Abrapa) is to maintain the upward trend.
Yesterday (2nd), the organization, which represents 99% of Brazilian cotton growers and 100% of the exporters, signed a memorandum of understanding with the China National Cotton Exchange (CNCE) aimed at intensifying the commercial ties between the two countries.
Founded in 1997 by the central Chinese government, the CNCE runs the largest business platform in China. It houses 4,300 spinning mills responsible for 90% of China’s consumption, as well as 90% of the domestic cotton traders.
Brazil is already the second largest supplier to China and it has become known for both for its quality and its competitiveness. With an increasing presence, its influence in the market is also growing”, pointed out CNCE’s general manager, Sun Juan.
Vice President of the China Federation of Supply and Marketing Cooperatives (ACFSMC), Hou Shunli, anticipated that this cooperation format will be a reference mark in the country. “The memorandum brings together the most influential and important organizations in the sector in each country and serves our long-term interests. We are two complementary nations: on the one hand, the largest global consumer market for agricultural products and, on the other, a nation that is becoming the world’s largest agricultural supplier,” he noted.
This vision is shared by the Brazilian ambassador to Beijing, Paulo Estivallet de Mesquita – who participated in the event. “We want China to see us as a reliable partner, capable of meeting their demands. In the case of cotton, the opening of Abrapa’s operation in Asia in 2020 just reiterates this interest in cooperating with the Chinese”, explained the diplomat.
The document signed yesterday projects the holding of joint events, such as the 2021 Cotton Outlook Forum. Promotional activities for Brazilian cotton in China, part of Abrapa’s Cotton Brazil program, can count support being provided by the CNCE, which in turn has been invited to share information in Brazil on China’s textile industry’s demands. There will also be an exchange of market information with the support of the Beijing Cotton Outlook, a CNCE subsidiary.
“This MoU seeks to clearly set out our intention to make Brazilian cotton the most natural and strategic choice for Chinese manufacturers”, commented Abrapa President, Julio Busato during the signing ceremony.
As the fourth largest global producer of cotton, Brazil has shown that it has the quality, sustainability and the volume to be the world leader in exports. Furthermore, it has one very important differential: the capability of supplying markets throughout 12 months a year.
As well as quality and quantity, Abrapa has shown that the cotton production sector in Brazil is sustainable. “80% of our production is certified and that makes us, today, the largest supplier of the Better Cotton Initiative (BCI) approved product”, said the organization. Another important competitive advantage for Brazilian cotton is its constant investment in transparency. Buyers can now track their shipments on a bale-by-bale basis.
Relations between Abrapa and the CNCE have been strengthened in recent months. In December 2020, a joint event, the 2020 Cotton Outlook Forum, was held in Qindao which had the support of the Brazilian Embassy in China. In March this year, this partnership was repeated for the promotion of the Cotton Brazil Outlook webinar aimed at the Chinese market.
The China Cotton Association
The MoU signed yesterday by Abrapa is its second partnership arrangement to be formalized with the Chinese organization. In April, the Brazilian growers also signed a commitment with the China Cotton Association (CCA) which brings together around 60% of the Chinese textile industry. As the first outcome of this MoU, Abrapa is supporting the China International Cotton Conference, which takes place on June 17th and 18th in Suzhou.