29,993 research outputs found
Valuing Transgenic Cotton Technologies Using a Risk/Return Framework
No full textStochastic Efficiency with Respect to a Function (SERF) is used to rank transgenic cotton technology groups and place an upper and lower bound on their value. Yield and production data from replicated plot experiments are used to build cumulative distribution functions of returns for nontransgenic, Roundup Ready, Bollgard, and stacked gene cotton cultivars. Analysis of Arkansas data indicated that the stacked gene and Roundup Ready technologies would be preferred by a large number of risk neutral and risk averse producers as long as the costs of the technology and seed are below the lower bounds calculated in this manuscript.cotton, financial risk, market value, SERF, transgenic, Agribusiness, Crop Production/Industries, Risk and Uncertainty, Q12, Q16,
Portrait of Joyce Cotton [picture] /
No full textTitle from inscription l.l.; Reproduced on p. 31 of Olive Cotton, photographer.; P1650/E; Exhibited: Mirror with a Memory, NPG, 2000; P1650/E
The use of New York cotton futures contracts to hedge cotton price risk in developing countries
No full textCotton exports account for a significant share of commodity exports for some developing countries, especially in West Africa and Central Asia. In these countries, dependency on cotton for export revenues has increased in the past 20 years. These countries therefore have a high exposure to cotton price volatility. Cotton-producing developing countries and economies in transition make little use of hedging mechanisms to reduce risk from the volatility of cotton export revenues. Countries in Francophone West Africa use forward sales to hedge but only for a small share of the crop. These countries could use cotton futures and options contracts to hedge against short- to medium-term price volatility, making cotton export revenues more predictable. Cotton futures and options contracts could also make cotton-related commercial transactions more flexible. (Futures could be sold when there are no buyers in the physical market, for example.) In West Africa, futures and options could complement the existing system of forward sales. The authors examine the feasibility of using New York cotton futures and options contracts as hedging instruments. They base their analysis on a portfolio selection problem in which the hedger selects the optimal proportions of unhedged and hedged output to minimize risk. The results suggest that despite the existence of relatively high basis risk (that is, a relatively low correlation between spot and future prices), hedging reduces cotton price volatility by 30 to 70 percent. Moreover, for all varieties of cotton examined, the hedge ratio (the percentage of exports hedged) was below one. Using a hedge ratio of one (naive hedge), at times, increases rather than decreases risk. The results also show that hedging, while reducing risk, also reduces expected returns. Attitudes toward risk that is, the degree of risk aversion - determine how much of this risk-return tradeoff is acceptable. For a risk-averse agent, the main benefit of hedging lies in risk reduction rather than in the potential for increased returns.Insurance&Risk Mitigation,Environmental Economics&Policies,Non Bank Financial Institutions,Financial Intermediation,Insurance Law
Prospects for Significant Change in Global Cotton Markets
No full textLong-range cotton export patterns from major exporting countries are evaluated, cotton production and implications for change in the U.S cotton export position are presented. Long-run patterns in textile trade and implications for raw cotton trade are also examined
Risk management prospects for Egyptian cotton
No full textThe authors examine risk management options for Egyptian cottons, the export prices for which are volatile. They use regression analysis to establish whether Egyptian cotton's prices can be effectively hedged by using existing futures contracts on the New York Cotton Exchange. They find no relationship between the movements in prices of Egyptian long and extra-long cottons and prices for the base quality of U.S. medium staple cotton traded on the New York futures market. (Probably because Egyptian cotton prices are government-determined, U.S. medium staple cotton prices are influenced by price support policies unrelated to the longer staple markets, and the fiber of the cottons analyzed have different physical characteristics.) So, the New York cotton futures market's No. 2 contract is not an appropriate mechanism for hedging the price risk facing Egyptian cotton under present procedures for determining prices - and probably not under market-determined prices. If the cotton market in Egypt is liberalized, cotton prices there may correlate more with prices elsewhere - especially for the longer staple cottons. The authors extend their regression analysis to the prices of other medium staple cottons - Australian, Central Asian, Mexican, Pakistani, and Turkish - to determine how they behave relative to U.S. medium staple cotton prices. None of these prices had short-term movements closely related to U.S. cotton prices, indicating mainly the influence of domestic policies on the U.S. market. Again, the New York futures No. 2 contract does not provide a satisfactory hedge for these cottons. The cotton futures contract recently introduced in New York (world cotton contract) - based on the Cotlook A Index - may prove useful for hedging the price risk for some cottons (especially Australian, Central Asian, and Pakistani) but apparently not Egyptian cotton. The authors recommend (together with privatizing the industry) establishing a domestic spot market to give transparency to the price-forming process. When the spot market is functioning well, establishing a foward market could provide a hedging instrument for Egyptian cotton.Markets and Market Access,Crops&Crop Management Systems,Agricultural Research,Textiles, Apparel&Leather Industry,Access to Markets
Cotton : Market setting, trade policies, and issues
No full textThe value of world cotton production in 2000-01 has been estimated at about 35 billion in 1996-97 when cotton prices were 50 percent higher. Although cotton's share in world merchandise trade is insignificant (about 0.12 percent), it is very important to a number of developing countries. Cotton accounts for approximately 40 percent of total merchandise export earnings in Benin and Burkina Faso, and 30 percent in Chad, Mali, and Uzbekistan. Its contribution to GDP in these and other developing countries is substantial, ranging between 5 and 10 percent. Cotton supports the livelihoods of millions in developing countries (at least 10 million in West and Central Africa) where it is a typical, and often dominant, smallholder cash crop. The cotton market also has been subject to considerable market intervention-subsidization in the European Union and the United States, and taxation in Africa and Central Asia. During the past three seasons, annual direct support averaged $4.5 billion. The author reviews the market setting and policy issues and gives recommendations on how industrial and developing cotton-producing countries can improve the policy environment.Textiles, Apparel&Leather Industry,Agricultural Research,Economic Theory&Research,Crops&Crop Management Systems,Environmental Economics&Policies,Crops&Crop Management Systems,Textiles, Apparel&Leather Industry,Agricultural Research,Environmental Economics&Policies,Livestock&Animal Husbandry
Cotton-textile-apparel sectors of India:
No full text"Cotton, textiles, and apparel are critical agricultural and industrial sectors in India. This study provides descriptions of these sectors and examines the key developments emerging domestically and internationally that affect the challenges and opportunities the sectors face. More than four million farm households produce cotton in India, and about one-quarter of output is produced by marginal and small farms. Although production has expanded—most recently with the introduction of Bt (Bacillus thuringiensis) cotton—domestic prices dropped sharply in the late 1990s, in parallel to world cotton prices. Using partial equilibrium simulations, we estimate that a price movement of the magnitude that occurred has a significant effect on levels of poverty among cotton-producing households. The fiber-to-fabric production chain, from cotton processing through apparel, employs more than 12 million workers in India and provides 16 percent of export earnings. Except for the spinning industry, these sectors are dominated by small, fragmented, and nonintegrated units, which adversely affect their competitiveness. Recent policy reforms have induced some technological improvements. In terms of future prospects for the Indian processing, textile, and apparel industries, our analysis emphasizes three dimensions of reform—the need for further investments in human resource development to improve industry productivity and reduce poverty among workers in these sectors, the emergence of modern domestic retail marketing chains, and the potentially vibrant prospects for the industry that arise from a growing domestic fabric demand and new opportunities in world markets if appropriate policies and investments are undertaken." from authors' abstractCotton, textiles, Apparel, Rural poverty, subsidies, Industry policy, World markets,
Cotton, biotechnology, and economic development
No full textDuring the past decade, cotton prices remained considerably below other agricultural prices (although they recovered toward the end of 2010). Yet, between 2000-04 and 2005-09 world cotton production increased 13 percent. This paper conjectures that biotechnology-induced productivity improvements increased supplies by China and India, which, in addition to keeping cotton prices low, aided these countries to cap-ture market share from (and cause losses to) non-users of biotechnology. By contrast, with a single exception, Africa has not adopted biotechnology and, not coincidentally, its cotton output declined by more than 20 percent between the first and second half of the past decade. The paper concludes that the development implications of biotechnology go beyond cotton and Africa. High energy prices have been an important driver of the recent commodity price boom. Therefore, investment and policy strategy responses to a cost-driven boom should be consistent with cost-saving alternatives. Biotechnology clearly meets this challenge.Crops&Crop Management Systems,Markets and Market Access,E-Business,Emerging Markets,Economic Theory&Research
DIFFUSION OF BT COTTON AND INSECTICIDE USE
No full textThis study estimated a dynamic logistic model to explain the diffusion Bt cotton in the United States. Regional differences in the speed and extent of Bt cotton adoption were explained by differences in availability of Bt seed adapted to local conditions, potential seed supplier profits, and economic variables affecting grower gains from adoption. The study also estimated the impact of Bt cotton on insecticide use, controlling for differences in pest infestations and prices and correcting for the endogeneity of the Bt adoption decision. Bt cotton significantly reduced insecticide applications to control target pests cotton bollworm, tobacco budworm, and pink bollworm. Bt cotton has led to an overall reduction in these applications per total US cotton acres, ranging from 0.5 in 1996 to 1.8 in 2003. Reductions in applications per infested acres ranged from 0.67 to 2.3.Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies,
Indian Bt cotton varieties do not affect the performance of cotton aphids.
No full textCotton varieties expressing Cry proteins derived from the soil bacterium Bacillus thuringiensis (Bt) are grown worldwide for the management of pest Lepidoptera. To prevent non-target pest outbreaks and to retain the biological control function provided by predators and parasitoids, the potential risk that Bt crops may pose to non-target arthropods is addressed prior to their commercialization. Aphids play an important role in agricultural systems since they serve as prey or host to a number of predators and parasitoids and their honeydew is an important energy source for several arthropods. To explore possible indirect effects of Bt crops we here examined the impact of Bt cotton on aphids and their honeydew. In climate chambers we assessed the performance of cotton aphids, Aphis gossypii Glover (Hemiptera: Aphididae) when grown on three Indian Bt (Cry1Ac) cotton varieties (MECH 12, MECH 162, MECH 184) and their non-transformed near isolines. Furthermore, we examined whether aphids pick up the Bt protein and analyzed the sugar composition of aphid honeydew to evaluate its suitability for honeydew-feeders. Plant transformation did not have any influence on aphid performance. However, some variation was observed among the three cotton varieties which might partly be explained by the variation in trichome density. None of the aphid samples contained Bt protein. As a consequence, natural enemies that feed on aphids are not exposed to the Cry protein. A significant difference in the sugar composition of aphid honeydew was detected among cotton varieties as well as between transformed and non-transformed plants. However, it is questionable if this variation is of ecological relevance, especially as honeydew is not the only sugar source parasitoids feed on in cotton fields. Our study allows the conclusion that Bt cotton poses a negligible risk for aphid antagonists and that aphids should remain under natural control in Bt cotton fields
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