All of the stars are aligned for a huge year of U.S. cotton exports. The only question is whether trucking companies, shipping lines and equipment providers will be up to the task.
“Equipment and space may hold us back,” said Ed Zaninelli, vice president of trans-Pacific westbound at Orient Overseas Container Line.
The situation can be just as dire inland, where the trucking industry will struggle to move cotton from the productive growing region of west Texas to Dallas, where cotton is stuffed into marine containers for export, said Don Lake, vice president of international operations at Centrix, a Memphis forwarder and cargo consolidator.
Strong demand from cotton mills in China, India, Pakistan and other countries in Asia will send cotton shipments soaring to that region. The National Cotton Council of America projects U.S. cotton exports for the marketing year that began on Aug. 1, 2010, will exceed 15 million bales. That is up substantially from 12 million bales in the recessionary 2009-2010 marketing year and the 13 million bales that have been the norm in recent years.
The industry group Cotton Inc. said the marketing season began with a bang in August with weekly export sales totaling about 500,000 bales.
Equipment availability in regions usually starved for marine containers, such as the U.S. interior and the Pacific Northwest, depends on the level of imports of consumer goods from Asia. Cotton is shipped from the mills in rural areas of the South, and from the nation’s largest growing region in west Texas, to distribution hubs such as Dallas and Memphis. If those inland hubs receive large volumes of containerized merchandise from Asia, there will be enough empty containers to carry the cotton exports. The logistics of the trans-Pacific trade run counter to the needs of cotton exporters, however, because most containerized imports occur in the fall, while the winter is the busiest time of the year for cotton exports.
Cotton shippers this year will also have to compete for vessel space with exporters of myriad agricultural and scrap commodities. U.S. exports of all types are booming because of crop problems in other exporting nations, and the weak dollar that makes U.S. goods more competitive overseas.
A similar scenario could arrive in the 2011-2012 cotton export season that will begin next Aug. 1. Carryover stocks this past year were very low around the world. If China this year rebuilds its stocks, it will soak up much of the excess production, and that will leave carryover stocks low once again, prompting another strong cotton export season later this year in the U.S.
Contact Bill Mongelluzzo at firstname.lastname@example.org.