Aiming to provide a blueprint for companies sourcing organic cotton, and incorporating it into their supply chains, Keringand Textile Exchange published two comprehensive guides on the organic cotton trade this week.
The guides offer detailed best practices and sourcing models for a more responsible trade. Overall, the guides aim to make it easier to source organic cotton by alleviating many of the challenges in the trade, and hopefully increasing the uptake in organic cotton. Ultimately, this effort will create more sustainable cotton supply chains for farmers and for the good of the environment, Kering and TE said.
During Textile Exchange’s conference in Washington last month, Kering’s sustainable sourcing specialist, Christine Goulay, said, “As businesses, we all need to have a real understanding of our dependence and impact on the raw materials we use. Kering was motivated to develop these guides to support the scaling up of organic cotton, which we believe will positively impact the trade overall. We hope the guides will be useful for our peers in identifying sources for organic cotton and in structuring their supply chains in a more environmentally and socially sustainable way.”
Organic agriculture can be a “force for good” and is considered the gold standard mode of production, with regenerative capabilities to address soil health, stabilize climate and significantly contribute to the United Nations’ Sustainable Development Goals, the organization said in “A World Beyond Certification: A Best Practices Guide for Organic Cotton Trading Models.”
However, an open conversation about the price and trade of organic cotton is urgently needed, they said, and the report offers a starting point that can lead to tangible recommendations for progressing more responsible pricing and trade.
When considering organic cotton, there is the expectation that the market would be willing to pay a differential for the added value of organic agriculture. However, because of the way commodity markets operate, this is not working, and organic cotton is failing to be the market driven solution it was intended to be, the report noted.
“There are a number of serious issues and challenges that must be addressed in this industry, and the conventional pricing and trading models that still dominate the organic market are increasingly seen as not fit for purpose,” according to the report.
The top concern is the lack of transparency across the supply chain.
The generally accepted practice of anonymous trade can create a disconnect between buyers and sellers and can allow participants to pursue their economic rationality with little awareness of the personal or moral consequences. The lack of transparency as to what the farmer gets paid creates opacity as to the cost of production, and when commodity prices are driven down, the market is rewarding and incentivizing practices that can keep people in poverty and compromises the environment. There are various ways to address these issues, and for organic cotton to deliver on its promise as a “force for good,” it is key that price and trade need a serious rethink, the report said.
One of the paths to developing a more responsible and ethical trade is to add a requirement–improving the procurement approach to ensure transparency and fair distribution of profits along the supply chain. Brands need to ensure they are creating a market-driven solution when they choose and procure organic cotton. Trading responsibly and paying a fair price must be part of that solution, otherwise, all efforts to improve the situation will be undone by the poverty of the people at its heart, the report noted.
“Responsible trade is built on trust and recognition of the interdependence within the network,” the report noted.
Five years of data from the top five organic cotton producing countries is provided, showing that the market is not always supporting organic cotton farmers financially.
Kering and the Textile Exchange said they hope that the guide will serve as a blueprint for those organizations aiming to make significant and positive changes to their current and future organic cotton supply chain model.
“The accompanying “Organic Cotton: A Fiber Classification Guide” is an easy-to-use tool to support organizations, from mass market to luxury products, looking to source organic cotton.
Since the organic cotton market is quite fragmented and only makes up roughly 0.5% of the total cotton supply, it is often difficult for companies to find what they need in terms of organic cotton sourcing, the guide notes. It addresses these challenges and offers practical knowledge to companies so that they are able to source their organic cotton in a more efficient and informed way by locating organic cotton fiber around the world and classifying it in terms of its fiber characteristics and end-product suitability.
A key point is that organic cotton has the same physical properties and characteristics as conventional cotton. There are no differences in the use, hand or in any of the ways cotton can be processed or used. However, significant differences can lie in the sustainability benefits and impacts associated with organic agriculture and its production systems.
The guide includes a fiber classification global map indicating fiber lengths and average yarn count produced by each organic cotton producing country. It also has a detailed classification table providing further information on the supply volume, product suitability, yarn type and other characteristics, and a special focus on India, which accounts for around 70 percent of the global organic cotton supply.
The guide also includes a supplier directory, with contact details of growers and suppliers of long and extra long staple organic cotton suitable for the luxury end of the market.