Regional OCRT 2019, China

Regional OCRT 2019, China 1

When & Where

As the second largest producer and the largest consumer of cotton in the world, China has a huge potential to influence growth of the organic cotton sector globally. With its inherent sustainable water management and socio-economic benefits to farmers, organic cotton represents an important opportunity for China.

Textile Exchange and CottonConnect would like to sincerely thank all those who joined us for the first co-organized regional Organic Cotton Round Table (rOCRT) in China on the March 14, 2019.

Responding to industry demand, CottonConnect and Textile Exchange brought together leading industry professionals during the Intertextile Shanghai Apparel and Fabrics Exhibition for an event specifically focused on organic cotton demand and supply in China.

The event was organized as a platform to share knowledge to support participants’ strategies to grow organic cotton in China, and as a launching pad for the community to take action. With active engagement of over 45 participants from government, initiatives, farmers, suppliers and (local and international) brands alike, we believe that this inaugural rOCRT China was a success in cross sector pollination of challenges and opportunities.

Please find below links to the rOCRT-China discussion summary and presentations shown on the day:

rOCRT-China 2019 Discussion Summary

Wenxiang Liu | CottonConnect – Growing Organic Cotton in China – Challenges on The Field

DongHeLin | CCRI – Access with Non-GMO Seeds

WangJianJun – A Farmers Tale

Aarony Xu | C&A Sourcing – Sourcing Organic Cotton in China

Guo Shun | Simply Simple – Organic Cotton Retail in China

Man Yick Chung | Esquel – Connecting Demand and Supply

Much was discussed during the rOCRT-China, and the following action points were identified:

  • Address the local challenges on non-GMO seed.
  • Raise awareness organic cotton in China (via supply chain, consumer and education)
  • Improve market linkages through innovative business models
  • Develop rOCRT-China as an annual event

We will endeavour to work with the sector to take some of these action forward. If you have an interest in joining us in this journey, please contact Evonne@TextileExchange.org.

2018 GLOBAL OCRT GENERAL ASSEMBLY: HIGHLIGHTS FROM CHINA

Graphic-recording-OCRT-2018-China
  • Majority of the cotton is grown in Xinjiang province where soil conditions are poor and water scarce. Methods of improving soil and conserving water is a key to sustaining livelihood for the contract farmers relying on seasonal work in the cotton fields.

  • There is potential for growing the production of organic cotton in China. However key challenges in market linkages, minimum quantity and pricing remains. Some solutions are being explored, including expanding supply of ELS, producing quality organic cotton blends with other sustainable fibers and promoting in-transition programs that are tied to carbon insetting and soil improvements. 

  • Call to action: demand coalition for smaller brands to overcome minimum quantity

2017 GLOBAL OCRT: HIGHLIGHTS FROM CHINA STRATEGY MEETING

OBJECTIVES:

To provide background and explore the challenges and opportunities of the Chinese organic cotton market.

HIGHLIGHTS:

  • Hu Kehua, of China National Textile and Apparel Council (CNTAC), shared (via video) CNTAC’s plans for organic cotton, including: (i) setting up a “China Organic Textile Alliance”, (ii) establishing a group standard and (iii) engaging local policymakers.

  • Felicia Shi, of GOTS China, explained how all local activities relating to organic product must be administrated by the Chinese-NOP, and that organic products certified to GOTS and OCS must therefore either be exported or recertified and relabeled. Felicia shared concerns about the adoption of a group standard as double certification is required.

  • Alison Ward, of CottonConnect, gave an update on their projects in Shandong and Xinjiang.

  • Veronica Yow, of Rare, gave an update on Rare’s efforts to transition 300 acres to organic in Hubei and Xinjiang, and also shared highlights from recent brand visits.

  • The group was interested in China both as a supply source and a potential market, but agreed that they needed to better understand the market.

  • Due to its high quality and longer staple length (and premium), there is market potential for Extra Long Staple (ELS) organic cotton.

  • Local brands have indicated interest in transitioning their cotton to organic but are facing difficulty with the minimum required quantity, and international brands have no visibility of the downstream supply chain except through manufacturers – both issues relate to the need for market linkages.
  • Comparatively, the organic market in China is quite small, with only 11 producer groups and 269 GOTS certified facilities. This makes efforts to understand and map the supply chain a manageable task.

  • It was also agreed that government engagement is key in China and that this needs to happen at multiple levels.

  • The group discussed the challenges and opportunities facing the organic cotton market in China:
    • Challenges: high premium (10-20%) compared to India; access and availability of non-GM seeds; the need for support during the three year in-conversion period; lack of incentive to grow organic cotton compared to fruits and vegetables that fetch higher prices; stringent requirements of Chinese-NOP; non recognition of GOTS/OCS; and market access/linkages.
    • Opportunities: China is a major sourcing country for brands and retailers with an estimated 60% of cotton passing through the Chinese textile supply chain. The country is also the fourth largest organic market with a growing GDP per capita and middle income earners.


OUTCOMES & NEXT STEPS:

  • The group concluded that a multi-stakeholder approach is key to creating market linkages and engaging government

  • Next steps include: to better understand the supply chain, create a multi-stakeholder platform, develop market linkages and engage government.
Regional OCRT 2019, China 2
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Contact Us

For more information, don’t hesitate to contact the team at: OCRT@textileexchange.org