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HOME ARCHIVE ABOUT US CALENDAR LINKS SUBSCRIBE ADVERTISE CLASSIFIEDS COTTON GINNERS MARKETPLACE
In This Issue
Staying Focused
What Customers Want
Jimmy Dodson To Lead NCC in 2013
New NCC Leaders Elected for 2012
Texas Gins' Goal? Avoid Contamination
Texas Producers Proactive On Weed, Water Issues
On-Farm Innovation Transforms Agriculture
Cotton Incorporated Adds New Online Program
Precision Management Key To Success
Water Crisis Looms In California
Ginning Marketplace
Editor's Note
Cotton's Agenda
Specialists Speaking
Cotton Consultants Corner
Web Poll
My Turn
TCGA Schedule of Events
Message from Tony Williams
President's Report – Dan Jackson
Ginner Of The Year — Prentice Fred
Incoming President — Danny Moses
TCGA Scholarship Program – A Commitment To Agriculture
Q&A: Jimmy Roppolo – Man On The Move
Cotton Farming, TCGA Continue Special Alliance
Overton Hotel Will Again Serve As TCGA Headquarters
Exhibitors & Booth Numbers
Timely Topics Slated For Gin Schools
Don't Forget To Go Outside
PCG To Deal With Big Issues At Its Annual Meeting
Plenty To Do At TCGA Show
TCGA Staff
Trust Makes Preparation For 20th Season
TCGA Officers and Directors
Want To Do Some Sightseeing? You'll Find It In Lubbock
Findley, Roppolo Receive Special Awards
ARCHIVES

 

It’s All About Timing For The Merchant

By Antonio Esteve
President/CEO ECOM Group
Past President, Intl. Cotton Association
Sao Paulo, Brazil
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Antonio EsteveMerchant – An Important Link

The function of the cotton merchant and his business is to act as the link between the producer and consumer by taking the trading risks inherent to the merchandising of cotton that neither of them are willing or prepared to take.

Whereas producers may be selling their crops forward to guarantee their profit margins against costs of production, spinning mills may be buying only in the spot market on a hand-tomouth basis to match purchases as much as possible with their yarn sales.

These contrasting interests make it quite remote that producers and spinning mills are capable of dealing with each other directly on a consistent basis. A merchant has to be prepared to buy when the producer wants to sell, and sell when a spinning mill wants to buy. In the interim, he absorbs the price risk management involved to get the job done.

As well, the merchant has the issues of distribution: Delivering the right cotton at the right time. Cotton is a product of nature and invariably suffers from variations in quality specifications – from crop to crop, region to region and supplier to supplier. As an example, some mills are tolerant of low micronaire, while others may be more tolerant of high micronaire, and others may have no tolerance whatsoever. While a producer has his hands tied to his own production in order to perform a sales contract, the merchant can be selective and has a book of business whereby he can apply the right cotton to the right customer.

Finding The Customer

With the advance of sustainability and the growing demand for verification of production practices, such as the BCI* global program, the merchant has the additional job of finding this cotton and getting it to the right customers.

The success of the merchant is directly proportional to his willingness, experience, knowledge, capacity and ability in taking risks and matching these requirements. Meanwhile, the customers want to source from those merchants who can do the best job at competitive pricing.

* BCI stands for Better Cotton Initiative: www.bettercotton.org

From Fiber To Fabric

 

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