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May 2013 Cotton Leader

May 1st, 2013

SEQUENCING COTTON'S GENOME
In early 2010, the Cotton Research & Promotion Program placed sequencing the Upland cotton genome as a top priority. The cotton genome is composed of 1.5 billion "base pair", or rungs, on the DNA ladder. In comparison, the soybean genome has .95 billion and the corn genome has 2.3 billion. Sequencing the cotton genome can generate results similar to sequencing the human genome. For example, it was recently discovered that a certain 2,000 "base pair" causes a specific type of cancer in humans. Recognizing this early enough in a person's life could allow for proper preventative treatment. Likewise for cotton, similar use of "sequences" may help identify resistance to a certain cotton pest – like nematodes. The cotton science infrastructure will be enriched by the coalescence of diverse data around these genomes, allowing them to make fundamental improvements in plant photosynthesis, fiber biochemistry and production sustainability.


COTTON INCORPORATED RELEASES 2012 ANNUAL REPORT
Cotton Incorporated's 2012 Annual Report, themed "Collaborating for Change," is now available online. To view the report, visit http://annualreport.cottoninc.com. The report offers letters from both Jay Hardwick, Louisiana cotton producer and Chairman of Cotton Incorporated's 2012 Board of Directors, and J. Berrye Worsham, Cotton Incorporated's President and CEO. In Hardwick's letter he says "Over the past year Cotton Incorporated continued its forty-plus year tradition of networking knowledge and expertise to support global cotton businesses, and the cotton industry as a whole." He continues by saying, "Cotton Incorporated meets challenges head-on with a range of innovative promotion and research strategies all designed to help improve the demand for and the profitability of cotton for our stakeholders." The report features 2012 budget/financial information as well as highlights from each of Cotton Incorporated's divisions. Also, a listing of Cotton Incorporated's Board Officers, Directors and Alternates is included. This marks the fourth year Cotton Incorporated has prepared a paperless annual report. Going electronic was done in an effort to save both money and paper. However, if you would prefer to receive a copy of the report in paper or DVD format, please contact Emily Thompson at ethompson@ cottoninc.com, or 212.413.8316.


RESEARCHERS AT TEXAS TECH FIND ENVIRONMENTAL APPLICATION FOR LOW-MIC COTTON
Research conducted at the Nonwovens and Advanced Materials Laboratory at Texas Tech's Institute of Environmental and Human Health (TIEHH) shows low-micronaire cotton is highly effective at absorbing crude oil spills. The study, published in the most recent issue of the American Chemical Society journal Industrial& Engineering Chemistry Research, reveals that one pound of low-micronaire cotton can absorb more than 30 pounds of dense crude oil. In addition, the natural waxiness of raw, unprocessed cotton fiber keeps water out, making cotton an efficient and effective material for addressing ocean-based oil spills, like the 2010 Deepwater Horizon disaster in Gulf. The study was supported in part by Cotton Incorporated and includes some of the first scientific data on unprocessed cotton's use as a crude oil sorbent. Dr. Seshadri Ramkumar, lead author of the study and manager of the Nonwovens and Advanced Materials Laboratory at Texas Tech's TIEHH said he and his colleagues found that low-micronaire cotton – one of the lowest-quality types of cotton – is highly effective at picking up oil. "About 10 percent of the cotton grown in West Texas is low micronaire," Ramkumar said. "It doesn't take up dye well, so it has little value as a textile fiber. However, because it is less mature, more of it can be packed into a given area. We show through sophisticated testing that low-micronaire cotton is much finer and can pick up more crude oil. In contrast to synthetic sorbents, raw unprocessed cotton with its high crude oil sorption capacity and positive environmental footprint make it an ecologically-friendly sorbent for oil spill cleanups."


"PASS THROUGH" PODCAST SERIES ADRESSES COTTON PRICES AND THE SUPPLY CHAIN
During the 2010/11 crop year, cotton prices experienced unprecedented volatility and raised many questions about the effect of cotton prices downstream in supply chains. Based on data that have become available since that time, it is possible to examine how the changes in cotton prices were passed through the supply chain. So, Cotton Incorporated recently developed a series of podcasts to describe these changes in prices that occurred and to discuss ways of thinking about fiber prices that could answer questions related to the effects of fiber prices in future periods of volatility. This "Pass Through" series consists of three separate podcasts. The first, "Observed Changes," describes the size and timing of response in supply chain prices to fiber prices. The second podcast, "Role of Non-Fiber Costs," explores how non-fiber costs can influence the effect of fiber prices downstream. Finally, "Thinking about Cotton Content" helps viewers learn how various cotton products are affected differently by cotton prices. This series of podcasts can be found by visiting www.cottoninc.com and looking under the "market data" section of the "corporate" tab.

ECONOMIC UPDATE
Despite some volatility, recent values for New York futures and the A Index are nearly even with those a month ago. After losing nearly five cents and dropping below 85 cents/lb, the July New York futures contract bounced back to levels near 87 cents/lb. The A Index also lost approximately five cents/lb and approached values near 90 cents/lb before climbing back to 95 cents/lb. The USDA's May report is the first to feature a complete set of estimates for an upcoming crop year. As was the case in the partial set of preliminary estimates released in February, expectations are that 2013/14 will be the fourth consecutive crop year where world production will exceed world consumption and result in an increase in global ending stocks. In 2013/14, world stocks are forecast to increase 8.0 million bales and to reach a record 92.7 million bales. The stocks-to-use ratio is expected to climb to a record 83.9%. Due to lower cotton prices relative to those for crops that compete for cotton acreage, planted acres and production are expected to decline slightly in the upcoming crop year. The forecast for 2013/14 world production is 117.8 million bales, 2.6% lower than in 2012/13 but 15.7 million bales higher than the recent low of 102.2 million bales experienced in 2008/09. With expectations for slow global economic growth, 2013/14 world consumption is forecast to be 110.4 million bales, which is 2.1% higher than in 2012/13 but about 10% lower than the levels near 120 million bales experienced prior to the 2008/09 recession and the 2010/11 spike in fiber prices. As has been the case the past couple crop years, 2013/14 price direction could be expected to center on Chinese cotton policy - specifically what proportion of Chinese mill-use will come from releases from Chinese reserves versus imports. The current USDA forecast is that Chinese imports would be 12.0 million bales in 2013/14, which is 34% lower than in 2012/13 crop year. If Chinese imports prove to be stronger than current estimates, stocks outside China would be pulled lower and world prices could move higher.

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