【News】 African countries called for urgent solution for the sharp decline of international cotton prices (Dec. 5, 2014)


Satoko Adachi-Geneva

In the Doha Round (multilateral trade negotiations) of The World Trade Organization (WTO), four cotton-producing countries in West Africa, which have called for solutions for the problem of cotton subsidies, insisted Friday, Nov. 28, on the need for early settlement of the round because the most recent decline of the international cotton prices has severely affected the farmers in those countries.

The problem of cotton subsidies is one of the pending issues among the least developed countries. The four countries, Benin, Burkina Faso, Chad and Mali, claimed that subsidies for cotton farmers in the United States and other countries led to overproduction and international price drop of cotton, and have damaged the farmers in the four countries. The subsidy system of developed countries has been one of the significant issues in the agricultural negotiations in the Doha Round as an example that prevents agricultural export of developing countries. In the trade conflict of WTO in 2005, Brazil sued the Unites States for the damage by cotton subsidies in the United States, and gave an award against the Unites States.

However, it’s been already 11 years since cotton-producing West African countries presented the cotton subsidy problem in the ministerial conference in 2003. The issue of cotton subsidies has been changing because China has replaced the United States as a country providing the largest amount of cotton subsidies, and Brazil renounced to impose retaliation measures against the United States under the condition that Brazil receives 300 million dollars from the Unites States in the trade friction concerning American cotton subsidies.

According to the International Cotton Advisory Committee (ICAC, headquartered in Washington, D.C., the United States), the price drop of cotton was caused mainly by reduced demand in China, the world’s largest clothing-producing country, and by stock buildup. The ICAC estimated the cotton price of fiscal 2014-2015 to be 79 cents per 1 pound (about 0.45 kilograms) at the cotton conference held Friday, Nov. 28 in WTO. They forecast that it will remain around half the price of fiscal 2010-2011 that exceeded 150 cents per pound.  The ICAC also reported that cotton yield per unit area has increased in India, which has become the largest cotton-producing country.

In the meeting that day, China, India and Brazil expressed their willingness to support the need of West African cotton-producing countries. They insisted on the need of early settlement of the round as well as suppression of agricultural subsidies at the time of cotton-price decrease.

However, John Adank, chairperson of the agricultural negotiations, expressed his intent to have a whole meeting of agricultural negotiations on Thursday, Dec. 4. He revealed his plan to resume the discussion concerning the work plan for settlement of agricultural negotiations and how to deal with subsidies for food supply in developing countries based on the arguments repeated before the summer vacation.

(Dec. 5, 2014)


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