World Cotton Price Research Articles

The Influence of Financial Performance and Macroeconomic Factors on the Financial Distress of Textile and Garment Companies Listed on the Stock Exchange: Empirical Studies in Indonesia

This study aims to determine the influence of financial performance factors and macroeconomic factors on financial distress in textile and garment companies in Indonesia. In this study, quantitative methods were used with causality research design. The study population is textile and garment companies listed on the Indonesia Stock Exchange in 2022. The research sample consisted of textile and garment sub-sector companies listed on the IDX for 5 consecutive years (2017-2021) and had audited financial statements. Companies that meet the sample criteria are 16 companies. Descriptive and inferential analyses are performed on the data. In inferential analysis, a panel data regression approach is used. The results showed that of the 9 research variables, there were 3 variables that had a significant influence on financial distress. Liquidity (CR) has a significant negative influence, Leverage (DAR) has a significant positive influence, and Activity (TATO) has a significant negative influence. Other variables such as profitability, sales growth, interest rates (BI 7day repo rate), exchange rates, world cotton prices (cotlook A index) and economic growth (GDP) do not affect financial distress.

Factors Affecting Sesame Seed Exports in Burkina Faso: The Vector Error Correction Approach

The research is financed by Academia Sinica, Taiwan. Grant No. AS-SS-107-02. Abstract Burkina Faso's (BFA) dependence on a single export crop, namely cotton, has so far threatened its economy since the fluctuating and uncontrollable drops in world cotton prices. The diversification of cash crops has become a national priority that is appropriated day by day by actors of rural development, and more particularly by farmers seeking to improve and secure their income. Thus, export crops, such as sesame, appear obvious and essential, not only for farmers’ income security but also for the country by its ability to attract currencies. In the last decade, BFA’s the sesame sector has recorded a tremendous growth both in quantity and value of exports to being the eighth world largest exporter of sesame seed. Considering its unequaled performance in the export of sesame seed, we deemed relevant to identify the key factors affecting that performance and to study their effects on sesame seed export earnings in order to draft appropriated policies aimed to enhance the country’s earnings. This study uses the cointegration approach, and has purposely designed exports value as the independent variable to analyze the country exports performance using time series data for the period of 47 years (1970-2016). One cointegration vector is found between the variables employed; thereby the Vector Error Correction Model has been performed. The empirical results reveal that nominal exchange rate, producer price, world export volume of sesame seed as a proxy of world demand, and world price are key factors affecting significantly the country’s exports performance in the short-run. Moreover, in the long-run nominal exchange rate, production, producer price, and world export price are factors determining significantly export earnings of sesame seed in Burkina Faso. For Burkina Faso to increase its market shares and export earnings, especially in the long-run, it is principally recommended to boost the production by increasing significantly yields and ensure an appropriate transmission of international prices increments to farmers. Keywords: Agricultural Export, Determinants of Agricultural Exports, Sesame Seed, Cointegration, Burkina Faso. DOI: 10.7176/DCS/10-4-03 Publication date: April 30 th 2020

Assessing the impact of China net imports on the world cotton price

China is the first cotton producer and importer in the world. This article investigates the impact its net imports have on the world cotton price. Using annual data from 1976 to 2009, the results show a strong positive and significant impact both in the short and in the long run. These findings are important as it helps policy makers and forecasters to improve the quality of their models. This work could also be extended to other commodity markets as China becomes a major player in the world economy.

Capturing the Margins: World Market Prices and Cotton Farmer Incomes in West Africa

Summary World cotton prices soared to record levels in March 2011, reaching $2.20 a pound in contrast to 40–80¢/pound between 2000 and 2010. The price spike serves as a natural experiment that offers insights into the relationship between world cotton prices and producer prices in West Africa. A comparative study of Burkina Faso and Cote d’Ivoire shows that national and regional level processes such as price setting mechanisms, inequalities in knowledge and power, and the oligopsonistic structure of West Africa’s cotton economies exert a strong influence on the share of world market prices that producers ultimately receive.

US–Brazil Cotton Dispute and the World Cotton Market

AbstractUS policies for its cotton producers depress world cotton prices, adversely affecting exporters such as Brazil, which filed a complaint to the WTO. Despite WTO rulings in Brazil's favour, meting out the right to enact retaliatory countermeasures, the United States continues to subsidise its cotton farmers. After prolonged negotiations, Brazil and the United States reached an agreement which allowed the United States to pay Brazil to refrain from enforcing the countermeasures. To capture the adverse effects of US policies, theoretical analyses are conducted. The theoretical model is extended by constructing an empirical model of the world cotton market. The adverse effects of US policies on Brazil are estimated and compared to the compensation the United States pays Brazil.

Cotton Lint Export Trade in the Midst of Distortion: What are the Competitiveness Statuses of Major Players in the Industry? Case of 12 Selected Countries

The world’s cotton production and export industry has for some time now witnessed protests from various producers and exporters on distortionary measures (notably subsidies) instilled by some major players (including the United States, India and China) and the downward pressure such measures induce on world cotton prices. To complement research efforts made and findings so far following such protests, we sourced assessment of the competitiveness statuses of twelve major players in the industry amidst such distortions. In so doing, we made use of the logarithmic form of the comparative export performance index (ln (CEP)), basing our decisions on newly introduced thresholds founded on seven-year-mean performance indices. In addition, we used mean deviation for the last four of the seven years covered to identify recessions and improvements in export performancefor the respective countries. The results show that, although such distortionary measures (specifically production and export subsidies) are instilled with a purpose of protecting respective local industries, they sometimes turn

On the impact of US subsidies on world cotton prices: A meta-analysis approach

Despite the literature dealing with the impact of subsidies on world cotton prices, there is no consensus regarding the quantification of these effects. The aim of this article is to contribute to this literature through the implementation of a meta-regression analysis. This methodology allows us to: (i) identify the main sources of heterogeneity between the primary studies, (ii) give some tracks to improve the modeling, (iii) provide a reliable effect of the removal of subsidies on world cotton prices. Relying on the estimation of various models to derive robust results, our findings show that a withdrawal of US subsidies would increase the world cotton price by around 11% on average.

The impact of the United States subsidies on world cotton price: evidence from ARDL bounds tests

This article investigates the impact of the United States subsidies on world cotton price in a structural framework. It starts with a simultaneous equations model of world cotton market, and then, it focuses on the reduced form. Using the Autoregressive Distributed Lag (ARDL) bounds tests of Pesaran et al. (2001), no evidence of cointegration is found between the underlying variables. This contrasts with results found in the classical framework, which highlight a strong evidence of a negative impact of subsidies on cotton price, either in the short or long run.

ANALISIS DAMPAK KEBIJAKAN MAKROEKONOMI TERHADAP PERKEMBANGAN INDUSTRI TEKSTIL DAN PRODUK TEKSTIL INDONESIA

Textile and textile’s product play an important role in the Indonesian economy. During the last five years, however, share of these industries and commodities to gross domestic product tend to decrease. The objectives of this study are to analyze factors affecting Indonesian textile and textile’s product, and the prospect of Indonesian textile and textile’s product in the future. Results of the study show that domestic textile production was affected by world cotton price and wage rate, while the domestic garment production was affected by wage rate in the garment sector. Indonesia’s textile export to world market was influenced by domestic textile price, and Indonesia’s export garment was influenced by exchange rate (Rp/US$). Indonesian textile demand was affected by wage rate and domestic garment demand was affected by income per capita of Indonesia. In general, the prospect of Indonesian textile and textile’s product seems not too good. In fact, Indonesian textile and textile’s product had depended on high import cotton, investment, and exchange rate. So why, economy policies are still needed to accelerate Indonesian textile and textile’s product development.JEL Classification: C53, E60, F43, and F4.Keywords: export, open economy, forecasting, simulation, textile and textile’s product.

ANALYSIS OF THE IMPACT OF MACROECONOMIC POLICIES ON TEXTILE INDUSTRY AND ITS PRODUCTS IN INDONESIA

Textile and textile’s product play an important role in the Indonesian economy. During the last five years, however, share of these industries and commodities to gross domestic product tend to decrease. The objectives of this study are to analyze factors affecting Indonesian textile and textile’s product, and the prospect of Indonesian textile and textile’s product in the future. Results of the study show that domestic textile production was affected by world cotton price and wage rate, while the domestic garment production was affected by wage rate in the garment sector. Indonesia’s textile export to world market was influenced by domestic textile price, and Indonesia’s export garment was influenced by exchange rate (Rp/US$). Indonesian textile demand was affected by wage rate and domestic garment demand was affected by income per capita of Indonesia. In general, the prospect of Indonesian textile and textile’s product seems not too good. In fact, Indonesian textile and textile’s product had depended on high import cotton, investment, and exchange rate. So why, economy policies are still needed to accelerate Indonesian textile and textile’s product developmentJEL Classification: C53, E60, F43, and F4.Keywords: export, open economy, forecasting, simulation, textile and textile’s product.

Increasing incomes of Malian cotton farmers: Is elimination of US subsidies the only solution?

In a WTO battle and the press the argument is often made that eliminating US cotton subsidies would have a large effect on the incomes and competitive position of farmers in developing countries. In Francophone West Africa cotton productivity has stagnated after rapid gains in the first two decades following independence (1960–1980). A farm model was constructed based on farmers’ definition of their decision-making framework which they use to respond to income and weather risks. With this model the effects on farmers of eliminating US subsidies are compared with various productivity increasing measures for cotton and sorghum in Dioila, Mali. Dioila is located in a representative cotton region producing 16% of the cotton in Mali. We include sorghum due to its importance for consumption and the observation of Malian farmers substituting cereals (sorghum and maize) for cotton as the returns to cotton have fallen in the 21st Century. In the farm model, the elasticity of transmission of a change in the world cotton price to the farm gate price is taken into account. The gains from eliminating US subsides are small. In contrast, the various technological alternatives including Bt cotton introduction, the use of higher fertilization levels for cotton, and the introduction of improved sorghum cultivars and moderate fertilization along with a marketing package all have substantially higher returns Even with substantial improvement in the mechanisms enabling farmers to benefit from the higher prices resulting from elimination of US subsidies, there are still much higher returns resulting from the various types of productivity increases.

Une méta-analyse de l’impact des subventions sur le prix mondial du coton

Malgré le nombre important d’études sur les impacts des subventions sur le prix mondial du coton, il n’existe pas de consensus concernant la quantification de ces effets. L’objectif de cet article est de réaliser une méta-analyse capable d’expliquer la source de l’hétérogénéité des résultats, de donner des indications quant aux variables indispensables à la modélisation, mais aussi de présenter un chiffrage des effets des subventions. Nous montrons que les valeurs des élasticités, les montants des subventions et l'incorporation de certains facteurs-clés sont les sources principales des variations inter-études. Une modélisation appropriée requiert ainsi une estimation précise des élasticités et l’intégration de certains facteurs constitutifs du prix mondial du coton tels que les niveaux de stocks ou le prix du polyester.

Pamuk ürününün en uygun satıs zamanının oyun teorisi yöntemiyle saptanması

<!-- /* Font Definitions */ @font-face {font-family:"Cambria Math"; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:162; mso-generic-font-family:roman; mso-font-pitch:variable; mso-font-signature:-1610611985 1107304683 0 0 159 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:""; margin:0cm; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman","serif"; mso-fareast-font-family:"Times New Roman";} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; font-size:10.0pt; mso-ansi-font-size:10.0pt; mso-bidi-font-size:10.0pt;} @page Section1 {size:612.0pt 792.0pt; margin:70.85pt 70.85pt 70.85pt 70.85pt; mso-header-margin:35.4pt; mso-footer-margin:35.4pt; mso-paper-source:0;} div.Section1 {page:Section1;} --> Bu çalışmanın amacı Aydın İlinde pamuk üretimine yönelik tarım işletmelerinin hasat sonrası pamuk ürünü için satış zamanının Oyun Teorisi Yöntemi ile saptanmasıdır. Bu bakımdan çalışmanın materyalini yörede pamuk üretiminde bulunan üreticilerin yoğun olarak gerçekleştiren köylerden tabakalı tesadüfi örnekleme yöntemi ile seçilen 93 adet işletmeden anket yoluyla toplanan veriler oluşturmaktadır. Oyun Teorisi Modelinde kullanılmak üzere, 1998–2007 yılları arasındaki İzmir Ticaret Borsasından alınan 10 yıl için aylık pamuk fiyatları geriye dönük olarak 1994 yılı reel fiyatlarına (1994=100) çevrilmiştir. En iyi satış dönemini belirlemek amacıyla iki ayrı model kurularak hesaplama yapılmıştır. Birinci modelde cari fırsat maliyeti dikkate alınarak hesaplama yapılmıştır. İkinci modelde ise nispi fırsat maliyeti kullanılmıştır. Birinci model için üreticilerin ürün satışı için en uygun ay olarak %50 ile Mart ayı tespit edilmiştir. 2. Modelde ise, satış zamanı Ekim ayı (hasat ayı) %83.83 ile tespit edilmiştir. Her iki modelden elde edilen sonuçlar 2006–2007 üretim dönemine uygulandığında, 1.Modele göre satış yapılması durumunda üreticilerin %7.64’luk bir fiyat avantajı sağlayacakları tespit edilmiştir. Nispi olarak banka faiz oranı eklenerek hesaplanan 2. Modele göre ise bu oran % 0.60 olarak bulunmuştur.

Estimating the supply response of cotton and cereal crops in smallholder production systems: recent evidence from Mali

AbstractCotton is one of the most important crops in West Africa and is a major catalyst of economic development in rural areas, but the sector has suffered from a decline in the world cotton price after 1999. This article exploits an unusual data set following 82 farmers over 14 years, from 1994 through 2007, to estimate a Nerlovian supply response model for cotton, maize, sorghum, and millet in long‐term rotation. The resulting system of equations is estimated with two‐stage least squares (2SLS), showing that this sample of Malian cotton producers have responded to prices in a relatively inelastic manner, with supply elasticities only about one‐half of those estimated for producers in developed countries. Policy reforms could help producers respond more easily to prices changes, as well as to raise average productivity levels.

The effects of MFA quota elimination on Indian fibre markets

This article examines the effects of multi-fibre arrangement (MFA) quota elimination on Indian fibre market. The partial equilibrium Indian fibre model was developed using a theoretically consistent framework and incorporated regional supply response, substitutability between cotton and man-made fibres, and appropriate linkage between cotton and textile sectors. Baseline projections were developed for supply, demand and prices of cotton, man-made fibres and textiles under a set of exogenous assumptions. The effects of MFA textile quota eliminations were introduced into the model by conducting three scenarios, i.e. increasing textile exports by 10, 20 and 30% from the baseline level. The results suggest that on an average, cotton imports rise by 4–8% annually, while the man-made fibre exports from India decline with the opening of textile markets in the developed countries. The higher domestic cotton prices encourage acreage expansion in cotton in all the three regions in India, but not enough to meet rising mill demand under the scenarios of higher textile exports. The rise in cotton imports from India has little effect on world cotton prices.

Doha development agenda: implications for the US and world cotton markets

This study analyzed two scenarios that considered a reduction of the US aggregate measure of supports (AMS) payments by 60% over a five-year period. In the first scenario, which considered a unilateral action by the US, the targeted AMS payments reduction would require a 12% cut in the US target price and an 8% cut in the loan rate. This would lead to a 3% decline in US cotton production, a 3% rise in world cotton price, and a 26% decline in US cotton net farm income at the end of the implementation period. The second scenario analyzed the case in which the US AMS payments reduction is concomitant with multilateral tariff and subsidy eliminations from the rest of the world. Under this scenario, fewer cuts in the US loan rate and target price (i.e. 9 and 4%) were required to achieve the 60% AMS reduction because of market liberalization from the from the rest of the world. However, US cotton producers' net farm income still declined by 18%.

Distortions of Sino‐US and Sino‐EU Safeguard Agreements: Effects on World Textile Markets

AbstractThe effects of Sino‐US and Sino‐EU safeguard agreements on US, Chinese and world cotton and textile sectors are investigated using a partial equilibrium model. The effects are compared to a free trade scenario under the provisions of the Agreement on Textiles and Clothing. The two safeguard agreements capping Chinese textile exports would decrease China's textile and apparel exports, production, and domestic consumption by an average 1.57, 0.63 and 0.32 percent, respectively. The safeguard agreements cause an increase in the US cotton textile price index and a slight decrease in US net textile imports and textile consumption. The agreements cause a decrease in the world cotton price and the quantity of cotton traded, but these trends reverse at safeguard expiration. The results generally support the view that the safeguard agreements forestall the effects of free trade in textiles and apparel rather than creating long lasting shifts in the textile trade.

U.S. Cotton Subsidies: Drawing a Fine Line on the Degree of Decoupling

The impact of the U.S. cotton policy depends on several interrelated factors: how input subsidies interact with producer price supports, producer price expectations, and the extent to which price supports are decoupled from production. Cotton subsidies have a direct impact on world cotton prices, depending on the extent to which price supports are coupled to production. At one extreme, there is a price impact of 12.4% when producers make decisions at the loan rate, but the average price impact is 20.9% when producers make decisions based on the target price. Results are presented for intermediate cases of decoupling.

Six-year comparison between organic, IPM and conventional cotton production systems in the Northern San Joaquin Valley, California

AbstractThree different cotton production strategies [certified organic, conventionally grown, and reduced insecticide input/integrated pest management (IPM)] were compared in field-sized replicates in the Northern San Joaquin Valley (NSJV), California, from 1996 to 2001. We measured arthropod abundance, plant development, plant density, pesticide use, cost of production, lint quality and yields in the three treatments. Overall pest abundance was low, and a key cotton fruit pest,Lygus hesperusKnight, known as the western tarnished plant bug (WTPB), did not exceed action thresholds in any treatment. Organic fields had significantly more generalist insect predators than conventional fields during at least one seasonal interval in all but one year. While there were no significant differences in plant development, plant densities at harvest were lower in organic than conventional and IPM fields. Some measures of lint quality (color grade and bale leaf rating) were also lower in the organic treatment than in either the IPM or the conventional treatments. Synthetic insecticides, not allowed for use in organic production, were also used in significantly lower quantities in the IPM fields than in the conventional fields. Over the 6-year period of the study, IPM fields averaged 0.63 kg of active ingredient (AI) insecticide per hectare, as opposed to 1.02 kg AI ha−1for conventional fields, a reduction of 38%. Costs of production per bale were on average 37% higher for organic than for conventional cotton. This cost differential was primarily due to greater hand-weeding costs and significantly lower yields in organic cotton, compared with either IPM or conventional cotton. Average 6-year yields were 4.4, 5.4 and 6.7 bales ha−1for organic, IPM and conventional treatments, respectively. Low world cotton prices and the lack of premium prices for organic cotton are the primary obstacles for continued production in the NSJV.

EFFECTS OF CHINESE CURRENCY REVALUATION ON WORLD FIBER MARKETS

A partial equilibrium model is used to analyze effects of Chinese currency revaluation on world fiber markets. Unique characteristics of this model include incorporation of a regional supply response of cotton, substitutability between cotton and manmade fibers, and linkage between raw fiber and textile sectors. Simulation results show renminbi revaluation is likely to increase China’s fiber imports and lower domestic cotton prices. Internationally, the world cotton price, polyester price, and cotton trade are expected to increase. A scenario modeling currency devaluation in China is run to test the stability of the model and ascertain its accordance with economic theory. (JEL F17, F42, F47, O2) With a view to establish and improve the socialist market economic system in China, enable the market to fully play its role in resource allocation as well as to put in place and further strengthen the managed floating exchange rate regime based on market supply and demand, the People’s Bank of China, with authorization of the State Council, is hereby making the following announcements regarding reforming the RMB exchange rate regime: Starting from July 21, 2005, China will reform theexchangerateregimebymovingintoamanaged floating exchange rate regime based on market supply and demand with reference to a basket of currencies. RMB will no longer be pegged to the U.S. dollar and the RMB exchange rate regime will be improved with greater flexibility.