The International Cotton Advisory Committee, the international intergovernmental forum for discussion of matters related to cotton, met in Manila, Republic of the Philippines, from October 23 to 27, 1995, in its 54th Plenary Meeting since the Committee was established in 1939. Thirty-four member countries were represented. Representatives of three non-member countries and six international organizations participated as observers. The Committee approved the following statement:

1. Slow growth in the world average cotton yield and increased imports by cotton producing countries have helped to boost world cotton prices since 1993. Because of diseases and pests affecting cotton, combined with difficulties in supplying inputs to farmers in many countries, cotton prices during the next five seasons may be higher on average than was the case during the 1980s and early 1990s.

2. World cotton production is estimated by the Secretariat at 19 million tons in 1995/96, an increase of only 2% over the previous season, despite an increase of 34% in the average world price of cotton during 1994/95. Extra-fine and fine cotton will account for one-sixth of the world cotton supply in 1995/96, up from one-eighth five seasons earlier. High-medium and medium types of cotton will account for nearly half of the world cotton supply this season, somewhat less than in 1990/91. Cotton for coarse count yarns will account for one-third of the world supply, unchanged from 1990/91.

3. Estimates by the Secretariat indicate that world cotton consumption is rising this season and is likely to continue upward at an average rate of 2% per year. However, world consumption of non-cotton textile fibers at the end-use level has risen at a faster rate, and cotton is losing market share. Between 1990 and 1994, cotton's share of the world textile fiber market fell almost 3 percentage points to 46%, the lowest share on record.

4. World trade in cotton reached a record 6.7 million tons in 1994/95 but could be lower this season. Trade in cotton was boosted in 1994/95 by imports by cotton producing countries in which consumption exceeded production or which sought to build stocks. Since cotton consumption continues to grow the fastest in producing countries, increases in cotton use during the rest of the 1990s may not necessarily translate into increases in cotton trade.

5. The Committee's attention was drawn to the importance of the sanctity of contracts in the cotton trade.

6. The need for cotton free of contamination from foreign matter and honeydew was recognized. The efforts of several producing countries to reduce contamination were noted. Non-cotton bale wrapping is a recognized source of contamination. Producing countries were urged to consider the advantages of cotton bale wrapping in order to reduce cotton contamination.

7. There is a need for continued monitoring of government policies in the post Uruguay Round period. The Secretariat was instructed to continue to report on policy changes and their effects on the world cotton industry.

8. International efforts to promote cotton consumption ended in 1994. The Committee took note of the decline in cotton's share of the textile fiber market and placed priority on addressing actions which the Committee could take to preserve the place of cotton in the world economy.

9. The Committee heard reports on efforts to improve commodity market performance through the development of the basis for the legal contracts, quality control and warehousing systems necessary for the operation of local, national and regional markets; the use of New York futures and options; and further development of futures markets outside of New York. It was proposed that the Committee invite representatives of the international cotton trade to demonstrate how they could assist small producers particularly in developing countries in minimizing risk.

10. Regarding the agrochemical survey presented by the Secretariat, producing country members supported the need to identify world best practices in the development of ecologically and economically sustainable cotton production systems and to report progress on developments.

11. The Committee heard reports on the way cooperatives assist producers in financing input supplies and providing marketing services and their new role in an increasingly privatized cotton marketing system. Countries undergoing these changes requested the assistance of other member countries in learning how to deal with liberalized systems. It was suggested that the Committee examine the consequences of privatization in all its aspects in the developing countries and the exposure of these countries to fluctuating prices.

12. The importance of the Committee's work in technical information was affirmed, as well as its role as a vehicle for cotton development funding under the Common Fund for Commodities. Proposals were made for the increased sharing of germplasm and new technologies in the field of pest control. A technical seminar was held on the topic New Sources of Genetic Resistance to Cotton Pests." The Committee received and supported an invitation to hold a second World Cotton Research Conference in Greece in 1998, under the joint sponsorship of Greece, the ICAC and other international organizations. It was decided to hold the technical seminar in 1996 on the topic Short Season Cotton: How Far Can It Go." It was also agreed that there would be opportunities at the technical seminar for discussions of research priorities and the progress being made in Common Fund financed commodity development projects.

13. The 55th Plenary Meeting of the Committee will be held in Tashkent, Uzbekistan, the week of October 7-11, 1996, at the invitation of the Government of Uzbekistan. The Government of Paraguay reaffirmed its intention to host the 56th Meeting in 1997. Invitations were received and accepted from Bolivia and Sudan to hold plenary meetings in years 1998 and 1999.