Joint team discusses U.S. infected cotton

Joint team discusses U.S. infected cotton

JAKARTA (JP): Trade and industry officials and spinners
discussed the problem of alleged cavitoma-infected cotton fiber
from Yuma and Imperial Valley in California, the United States,
at separate meetings here yesterday.

The problem of infected cotton bought from Calcot Ltd. was one
of the seven issues within Indonesia-American trade relations
discussed at a staff meeting chaired by Trade and Industry
Minister Tunky Ariwibowo, said Lily Rosyana, the spokesperson for
the ministry.

Rosyana, however, declined to elaborate on the trade issues
but she added that insofar as the diseased cotton is concerned
the discussions were exploratory in nature and gathered all facts
pertaining to the problem.

The meeting apparently followed up a letter sent by Tunky to
U.S. Secretary of Agriculture Dan Glickman early this month which
asked for Glickman's cooperation to help resolve the problem of
the diseased cotton.

The letter itself was sent following repeated complaints from
PT Argo Manunggal that its American supplier, Calcot Ltd., had
not responded to its claim regarding the diseased cotton
delivered between October and December last year.

In a related development, the executives of 30 spinning
companies gathered at the Shangri-La Hotel yesterday to discuss
the cavitoma-infected cotton and other problems they faced with
regards to imports from the U.S. which supplies about 45 percent
of Indonesia's annual needs of 2.4 million bales (1.2 billion
pounds) of cotton.

"We met to share information about any problems we face with
regards to cotton imports from the U.S.," noted Anas Sukarmadji,
one of the participants.

It turned out, Anas added, that the state-owned PT Sandang II
spinning company in East Java also bought part of its cotton
fiber from Calcot Ltd. and also claimed to have found it
infected.

"The problem is that such contamination as that caused by
cavitoma and honey dew is not covered by the rules applied by the
Liverpool Cotton Association Ltd.-- the arbitration body for
cotton trade disputes," he added.

The executive of another spinning company argued that it would
be rather futile for Indonesian cotton buyers to settle claims
through the Liverpool Cotton Association because the way the
arbitration body works is biased towards the interests of the
seller.

"It is therefore high time for Indonesian cotton consumers to
lobby strongly for the establishment of an arbitration body in
Jakarta to handle cotton trade disputes in the ASEAN region," he
pointed out.

Strategy

With an annual import of almost 2.5 million bales a year and
with a steady increase in cotton use by the rapidly-growing
textile industry in the country, Indonesia deserves to have such
an arbitration body, he argued.

He added that spinning companies in the country should set up
networks in the form of a club to serve as a lobby forum to face
cotton suppliers.

The meeting yesterday was the first attempt by spinners to set
up a single forum. Until now, the spinning companies belong to
two different business organizations-- the Indonesian Textile
Association and the Sekbertal Spinners Association.

Husein Aminuddin, Chairman of Sekbertal and an associate
director of the Liverpool Cotton Association, has expressed
strong objection to the way Argo Manunggal is handling its trade
dispute with Calcot Ltd.

Aminuddin insisted that the trade dispute should be resolved
through the Liverpool Cotton Association but the spinners who met
yesterday saw little chance for a fair settlement at the
arbitration body. (vin)