Pima acres down with price; gains set for trademark

Although the past few seasons haven't been that great for returns from Pima cotton, the last year has been active with expanded promotion through the Supima trademark, an asset for the future.

Extra-long-staple cotton around the world is going through a transition period, said Matt Laughlin, executive vice president of the Supima Association of America, at a meeting of growers near Coalinga, Calif. Meetings were also held in Phoenix, Bakersfield, and El Paso.

U.S. Pima average prices peaked in 1995-96 at a few cents above $1.20 a pound but slid to less than 85 cents as the current marketing year began with ending stocks of nearly 250,000 bales. As those stocks work down, USDA predictions are for the average price to move close to $1.

The big 1999 U.S. Pima crop of 674,000 bales contrasts to the 400,000 to 450,000 bales expected this year from an estimated 202,000 acres (170,000 in California, 20,000 in Texas, and 6,000 each in Arizona and New Mexico), down 30 percent from last year.

"That's a big drop, but we're bringing in almost 250,000 bales this year, and that will make our second largest supply in 11 years, so it's not as if we'll have a shortage," Laughlin said.

The export share of Pima consumed rose to 76 percent in the 1999-00 marketing year, vs. 71 percent the year before, partly because Egypt, despite its large stocks, began to run out of exportable quality cotton.

A late-season push of sales in 1999 brought U.S. Pima to 587,000 bales for the highest off-take ever. Southeast Asian countries have increased their purchases, and Laughlin said exports so far this year are 70,000 bales ahead of last year.

Evaluating the 2000 growing season, Laughlin said Egypt, our chief competitor for ELS cotton, has sold relatively little cotton the last four months. Egypt must cope with a three-part problem: using its stocks domestically - one of its lowest acreages in decades - and a new crop off to a late start.

Laughlin said he expected announcement of Egyptian prices for the new crop soon. "Giza 75, traditionally 15 to 20 cents higher than our Pima, was only 4 to 6 cents higher this last season. Giza 86 and 89 will probably be a little under our prices."

Laughlin said Step 2 of the ELS Competitiveness Payment Program to head-off unfair price competition activated in August, and U.S. growers at one point got payments of $9 per bale. The support later flattened when Egyptian prices declined.

He said the three-year assistance package, which set aside $10 million to keep ELS cotton in the marketplace, of which only $500,000 has been used, is not needed at the moment, but "we may need it again sometime in the next three years."

`Wait and see' Could the American Pima industry move 600,000 bales next year, as USDA predicts? "It's possible," said Laughlin. "Exports could reach 470,000 bales, but we'll have to wait and see."

At any rate, he said the U.S. industry is in good position to seize opportunities because of the large percentage of high-quality Pima in its 250,000-bale carryover.

Jesse Curlee, president of the association, said the reputation of the Supima trademark has grown significantly in the last year.

"Our licensing program is important for two reasons, the first of which is the quality image and added value it creates for textile products that use the Supima name," he said.

The second reason, he added, is a manufacturer seeking to display the trademark must buy the goods or yarn from a source that uses only American Pima cotton. Other extra-long staple cottons from other sources cannot be used in products bearing the logo.

Eleven domestic brands, including Eddie Bauer sportswear, J.C. Penney Co. towels, and Ralph Lauren, have been added to the users of the trademark.

Fifteen foreign manufacturers were signed as new licensees, and in the month of May alone, 20 requests, mostly from Asian apparel manufacturers or knitters, for licenses were received. In June and July another 20 requests were received.

Licenses to use the trademark are granted only after a thorough investigation, including checking for any product names similar to Supima or unapproved use of the trademark. A newly established charge of $1,000 per year for each license offsets the costs of the process.

"We are slowly granting these licenses, but I must say we do not automatically approve a request to use the Supima name," Curlee said. "We make certain they make a quality product and are using 100 percent Supima cotton. We've had more requests in the last six months than we've had in the last six years."

Curlee could not explain why the many requests have come in, but he did say, "Everyone is trying to make their product different from someone else's, and the standards we set are very important."

Fieldcrest, Cannon and Lands' End have heavily promoted Supima cotton. Fieldcrest's Charisma Select line of towels and sheets with all Supima in both the loops and rounds of the cloth. The line also includes a 360-count sheeting, for smoother texture, in place of the regular 310-count.

A recent Lands' End catalog devoted its first 13 pages to Supima goods.

Among other promotions is an annual fashion show in Tokyo funded by Cotton Council International. Several Japanese licensees provide fabric for apparel designs, and major manufacturers and retailers attend the popular show.

Curlee said Supima continues to visit each of its top customers, both domestic and foreign, at least once a year.

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