Organic Cotton Market Report 2018 - Textile Exchange
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Foreword from La Rhea Pepper Call to action Towards a more connected community SET A TARGET The organic cotton sector has been working diligently to Starting with the Organic Cotton Accelerator (OCA) and Commit to transitioning your cotton usage improve livelihoods and agricultural impacts for the past Textile Exchange’s Organic Cotton Round Table (OCRT), to organic and set quantitative, time-bound 25 years. All of us care deeply about the vibrancy of discussions are in place to plan on how to work more targets to help track progress. the sector and its leading role in the sustainable textile closely to support a more connected community and BE CONFIDENT IN YOUR journey yet, for the past number of years, the organic sector-wide collective impact. How can the OCRT’s CONTENT CLAIMS cotton sector’s growth hasn’t been reflecting this. convening, catalyzing and educating work compliment Earlier this year, we asked - would a more connected OCA’s work investing in key issues and farm end Use a chain of custody standard to track community support organic cotton to have a larger support to lead to a greater collective impact? your product to market. collective impact? We are very excited about this direction and look MAKE AN IMPACT As a part of this deep reflection, we spoke with many of forward to your input and help in connecting the sector Work with suppliers to build transparency you, hearing directly and indirectly some clear desires. for greater impact. Stay tuned for more information on and ensure impact on the ground. While we know impressive work is being done and this following the 2018 Global OCRT in Milan on 22 organic cotton production is up this year, we also know October. INVEST IN TRANSITIONAL we are nowhere near where we need to be to have Looking for innovative ways to do great the level of impact we know the sector could have. things? Invest in cotton in transition-to- One concern we have heard loud and clear is the La Rhea Pepper fragmentation of the sector and lack of required aligned organic, blended with your certified organic. Managing Director, leadership. DIVERSIFY YOUR SOURCING Textile Exchange We therefore looked for best practice models that Consider a diverse approach to building your demonstrate what it takes to move from isolated organic supply base, different regions offer impacts to a collective, connected impact. It turns out different opportunities. there are five key conditions needed: DO BUSINESS DIFFERENTLY 1. A Common Agenda How do you re-engineer your sourcing 2. Shared Measurement practices? OCA, ChetCo, OrganiMark’s “cluster” program - each help brands and 3. A Mutually Reinforcing Action Plan suppliers leverage scale they create together. 4. Continuous Communication TAKE YOUR SEAT AT THE TABLE 5. A ‘Backbone’ Structure to support it Join our Global and Regional Organic Cotton Round Tables. Cover Page Photo: Farmer Field School, Ethiopia - Pesticide Action Network UK
Independent review BSD Consulting performed an independent review of Accountability Principles and considered that the After careful revision of the OCMR 2018 and its underlying the data collection process used by Textile Exchange report has satisfied the Inclusivity and Responsiveness data collection process, we can affirm that Textile Exchange in compiling data for the annual Organic Cotton Market principles in full. A total of eight local ambassadors was able to improve the accuracy and completeness of the Report (OCMR). The objective of the critical review have been involved in this year´s data collection presented data and deliver a reliable picture of the current is to provide Textile Exchange’s stakeholders with an process. With the help of this support staff and partner state of organic cotton production. Using data triangulation independent opinion about the quality of the reported organizations, Textile Exchange was able to establish and investigation, the team put a considerable effort in data and the adherence to the principles of international a strong network of partners allowing it to approach compiling the global data. benchmarks such as the AA1000APS (2018) and the the data collection from different perspectives. During GRI Standards. The full statement is available here. the production year, many producer groups have been To further benefit from this effort, we recommend that Textile visited in loco, which allowed first-hand confirmation Exchange expand the report in future cycles with impact BSD Consulting considers the total of 117,525 MT of numbers. Furthermore, Textile Exchange has made data that can distinguish the importance of organic certified of organic cotton for the production year 2016/17 updates in the data collection methodology applied in production in an environment of increasing sustainability reported in the OCMR 2018 to be an accurate and the prior report and presented a revised version in order claims of market partners and related certification schemes reliable estimation. Textile Exchange has made a major to conduct the data collection of this report during our with less rigid benchmarks for production. effort in obtaining more data from Certification Bodies review process. (CBs) and, at the same time, improved the quality of producer data, by establishing direct relations with With reference to the Impact principle, the OCMR 2018 the groups through visits or using data from existing is providing case studies to document the evolution and Beat Grüninger partner programs to confirm the data sets derived from development of organic cotton in all covered regions Director, Group Partner, BSD producer sources. The data collection process also and also predicts a significant increase of converted Consulting satisfied the completeness principle to a great extent areas in the coming years. So far, anecdotal references as it covered 32 out of 64 cotton producing countries, on how organic cotton will contribute to the Sustainable representing nearly 95 percent (21,936,000 MT) of Development Goals suggest that cotton will have a the total production registered by the International strong positive impact on society and environment. Cotton Advisory Committee (ICAC). The data has been compiled using three different sources: Data For the next reports, we recommend that Textile delivered directly by producer groups, data from official Exchange gather objective data from impact studies governmental agencies registering certified production that can corroborate this impact. Given the fact that and data provided by certification bodies. consumers often do not make a clear distinction between organic and less rigid sustainability BSD has verified a sample of templates used by the certifications, such impact data can prove that organic ambassadors for data collection and confirmed that has stronger positive footprint and is key to further triangulation and quality checks have been used increasing organic certified cotton production. to guarantee accuracy of the data to the extent it was technically possible for Textile Exchange. BSD Consulting evaluated the application of the four
What’s inside Contents EMENA & Central Asia 38 Key findings 6 Q&A with Aydin Unsal 43 The year in numbers 6 Stakeholder directory 45 Snapshot of the wider organic sector 7 Latin America & the Caribbean 46 Global organic cotton production 8 Q&A with Orlando Rivera 50 2016/17 organic cotton production 9 Stakeholder directory 52 Q&A with Anita Chester 11 South & Southeast Asia 53 Organic Cotton Round Table 12 Q&A with Arun Ambatipudi 58 Organic cotton & the Sustainable Development Goals 13 Stakeholder directory 64 Brand commitments to organic cotton 14 Q&A with Crispin Argento 15 United States of America 65 Stakeholder directory 16 Q&A with Sally Fox 70 Organic cotton pricing 17 Stakeholder directory 72 Fiber classification 19 Standards & Certification 73 Africa20 Organic textiles certification 75 Q&A with Prama Bhardwaj 25 Central Database System 76 Stakeholder directory 29 Methodology & Disclaimer 77 China30 2018 methodology & disclaimer 78 Q&A with Veronica Yow 34 About Textile Exchange 80 Stakeholder directory 37 © | Page 4
Welcome to the 2018 Organic Cotton Market Report “ We are happy to note that this year’s Welcome back to Textile Exchange’s 13th Organic be found in India, Tanzania, and Pakistan, with China, OCMR and the processes leading up to Cotton Market Report (OCMR). Turkey and Kyrgystan also reporting substantial areas. putting this report together have been GRI compliant. This improvement fills a Our 2018 report is packed with even more data and Our mantra: Growth must come with Integrity. critical data gap in the sector and C&A analytics, alongside the ever-popular country round- In this report you will find many fine examples of organic Foundation is glad to have supported ups and bite-sized, yet totally inspiring, stories from the cotton programs across the globe. You will see they Textile Exchange on this journey. We hope organic field. are transparent, otherwise they would not be featured. that this trajectory continues allowing the Globally, organic cotton production grows ten percent. These champions, among others, work hard to grow industry to make informed choices based the sector with integrity and respect for their fellow on credible data. We are pleased to announce a ten percent growth in partners, their communities, and the environment. organic cotton fiber production in 2016/17, over the year before. The biggest volumes are coming from We are proud to be independently verified. India, China, Turkey and Kyrgyzstan. Anita Chester After two years of intensive work with BSD Consulting, Head of Sustainable Raw Many countries have growth in the double-digits. supported by the C&A Foundation, we have some big Materials, C&A Foundation news to report this year. We are extremely proud to We witness strong growth in China, the USA, and announce that our data collection and management Brazil this year, with Uganda, Tanzania, and Benin also systems have been independently assessed by BSD’s achieving high growth on the African continent. auditing arm and found to be GRI compliant. This is a While organic still occupies less than one percent rewarding moment for Textile Exchange, especially for of global cotton production, it’s interesting to look our data and analytics team and regional ambassadors at the organic share within each country. Tanzania who have worked so hard for this recognition. and Tajikistan are producing between seven and ten Reserve your place at the Table. percent of their overall cotton supply organically, while Kyrgyzstan’s organic was calculated at an impressive Whether it’s Milan, Izmir, or Koudougou, there’s a place 66.8 percent of the country’s overall production. for all at Textile Exchange’s Organic Cotton Round Table. Join us and you will receive a warm welcome! In-conversion figures reveal serious growth is just We hope to see you soon. around the corner. One of the most exciting observations is the potential for growth we are seeing through reported in-conversion Liesl Truscott figures, which reveal that a whopping 217,721 ha (50 Director of Europe & Materials Strategy, percent of the current land area) are in conversion to Textile Exchange organic. The largest areas of in-conversion land can
Key findings Organic cotton production Substantial areas of land are The year in numbers grows ten percent globally. in transition to organic. In 2016/17, global organic cotton 214,863 hectares of cotton-growing 117,525 472,999 214,863 production reached 117,525 MT land were in transition to organic fiber, representing a ten percent in 2016/17, almost 50 percent of Organic Cotton Organic Certified Organic Fiber (MT) Land (ha) In-Conversion growth. This stems, for the most the current certified land area. This Land (ha) part, from China, fuelled by growing indicates strong growth over the demand both from the organic next few years as this land reaches TOP 5 PRODUCING COUNTRIES: dairy industry and the domestic certification. The vast majority of textile sector. Other countries that in-transition land is in India, with the contributed significantly to the remainder stemming predominantly growth include Tanzania, Uganda, from Pakistan, China, Tanzania, and Tajikistan 6,405 mt Kyrgyzstan 8,019 mt +10% 5.4% 6.8% over 2015/16 Benin, Turkey, and the USA. Turkey. Turkey 7,741 mt Organic Cotton Fiber (MT) 6.6% China 22,521 mt More brands are committing Promising developments India 59,470 mt 19% +56% to organic. from organic cotton over 2015/16 51% initiatives span the globe. Organic Certified Land (ha) A growing number of brands and retailers are setting targets and From brand commitments and signing commitments to increase government-backed initiatives to TOP 5 PRODUCING COUNTRIES BY: GROWTH IN GOTS CERTIFIED their use of organic cotton, either industry collaborations and strategic FACILITIES: under their own steam or as part of partnerships, there has been a IN-CONVERSION GROWTH public, group commitments such as surge in the efforts being made (HA LAND) (% VOLUME) the German Textile Partnership or across the globe to grow and the Sustainable Cotton Challenge. support the organic cotton sector. In India 172,180 Senegal +427% Such commitments are driving this report, you will find directories at Tanzania 18,409 Brazil +155% change in supply chains as brands the end of each section showcasing invest in finding innovative and long- just some of this great work. Pakistan 12,283 Uganda +155% term solutions to secure supply and China 5,108 Benin +72% h8% build greater transparency. Turkey 2,721 Egypt +70% 5,024 Certified Facilities BACK TO CONTENTS © | Page 6
Snapshot of the wider KEY ARABLE CROPS KEY PRODUCING REGIONS (LAND) organic sector Cereals Europe 13.5m ha The wider organic sector continues to expand globally, with a Green fodders 15 percent rise in organic farmland and a 12.5 percent rise in Oilseeds the number of organic producers from 2015 to 2016. Dry pulses This page provides a snapshot of the wider organic sector in Latin Oceania America 2016 (the most recent statistics available). It’s useful to have Textile crops 7.1m ha 27.3m ha these trends in mind as we dive into the growth trends in 0m ha 1.5m ha 3.0m ha 4.5m ha organic cotton in the remainder of this report. FARMERS CERTIFIED LAND MARKET The number of organic producers is increasing. 57.8m ha The global organic market is growing and consumer demand is organic farmland (incl. in-conversion) increasing. 2.7m $91.4b US organic farmers 178 countries global organic food market 2016 in organic farming +12.8% +15% +12% over 2015 over 2015 over 2015 TOP 3 COUNTRIES: FARMERS TOP 3 COUNTRIES: LAND TOP 3 COUNTRIES: MARKET Uganda Australia US 835,000 27.1m ha $44.4b US India Argentina Germany 210,352 3.0m ha $10.85b US Mexico China France 210,000 2.3m ha $7.65b US 1. FiBL & IFOAM - Organics International, 2018, The World of Organic Agriculture: Statistics & Emerging Trends 2018 BACK TO CONTENTS © | Page 7
2016/17 organic cotton production A global snapshot 220,478 472,999 117,525 2016/17 was an exciting year for the Data Revisions Organic Farmers Organic Certified Land (ha) Organic Cotton Fiber (MT) organic cotton community. As well as seeing promising developments from Textile Exchange relies on its data organic cotton initiatives across the providers for data comprehensiveness, globe, we also saw a ten percent growth accuracy and integrity. Whilst we carry in global fiber production, which reached out a systematic completeness check on our data processes, this is done 117,525 MT. on best available information at time of 10% 214,863 0.5% This growth stems for the most part from reporting. For this reason, as we gain Fiber Growth Over Organic In-Conversion Cotton Globally Is Organic China, fuelled by growing demand both further insights and information from 2015/16 (MT) Land (ha) (ranging from
2016/17 organic cotton production Global trends COMPARISON BETWEEN CONVENTIONAL AND ORGANIC COTTON PRODUCTION TRENDS 30,000,000 300,000 2004-05 25,000,000 250,000 Conventional Fiber Production (MT) Organic Fiber Production (MT) 2005-06 20,000,000 200,000 2006-07 15,000,000 150,000 10,000,000 100,000 2007-08 5,000,000 50,000 2008-09 0 0 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2009-10 Conventional Organic 2010-11 2011-12 REGIONAL ORGANIC COTTON PRODUCTION - 5 YEAR TRENDS 2012-13 100,000 Africa 90,000 2013-14 80,000 China 70,000 Fiber Production (MT) EMENA & 2014-15 60,000 Central Asia 50,000 Latin America 2015-16 40,000 & Caribbean 30,000 South & 2016-17 20,000 Southeast Asia 10,000 United States 0 0 50,000 100,000 150,000 200,000 250,000 300,000 2012-13 2013-14 2014-15 2015-16 2016-17 Organic Cotton Fiber Production (MT) BACK TO CONTENTS © | Page 10
Q&A with Anita Chester Anita Chester each of the regions that we work in are unique in their agro-climatic and socio- Q Where do you go from here? economic contexts, they experience Head of Sustainable Raw Materials, a common thread of challenges. We are deepening our work both in C&A Foundation Lack of access to good quality non- India and globally. While continuing to genetically modified (non-GM) cotton is increase the number of organic cotton easily the greatest obstacle that holds farmers, we also focus on strengthening back organic cotton. This is not just a farmer collectives. We need to drive Where is C&A Foundation organic cotton farmers in their programs Q problem in India; it is a challenge even a shift from philanthropic to market in its journey of its organic have seen an income increase of over based models. Simultaneously, we cotton program? 25 percent compared to conventional in countries where GMOs have not been approved. This is not surprising will continue to support OCA’s work to farmers in the same areas, thanks to bring the industry together and embed The case for organic cotton may not be as research has mostly been biased around 50 percent decrease in input newer business models in the sourcing immediately evident, but its restorative in favour of GM cotton seeds, and cost. This, when the reported yield even operations of brands. These business and regenerative nature presents there has been limited investment and after four years was 3 percent less than models are aimed at both improving an incredible opportunity to radically research on indigenous cultivars. their conventional neighbours. Further, the business case for farmers as well transform the textile industry’s impact a recent Life Cycle Assessment study Other challenges include i) the lack as the integrity for brands. OCA will on both the environment and farmers’ supported by C&A Foundation reveals of support systems for farmers that also coordinate industry investments lives. In 2014, C&A Foundation began the substantially reduced environmental enables access to good quality into areas, such as seed research its journey of supporting farmers to footprint for organic cotton compared to bio-pesticides and bio-fertilisers, and breeding. While actively engaging adopt organic cotton farming practices. conventional. and knowledge on organic cotton with agriculture universities, research Already the foundation, along with nine partner organizations, has made Additionally, C&A Foundation’s work practices; (ii) weak market signals and institutes and seed companies to it possible for approximately 54,000 with the Organic Cotton Accelerator a fragmented supply chain, which address the seed challenge, C&A smallholder farmers across Brazil, (OCA) has been critical to move the makes market access for organic cotton Foundation is committed to contributing China, India, Pakistan and Tanzania to entire industry, as has our continuous farmers difficult; and (iii) a weak policy towards a robust global strategy for transition to organic cotton. Once fully engagement with governments, which environment for organic cotton. These non-GM seed. Collaboration is critical to certified, these farmers will constitute has yielded initial positive results in terms common factors that resonate with the make organic cotton thrive. an additional 20 percent of the existing of policy level support Indian experience, teach us that there is a lot to be done, and organizations For more information on the C&A global organic cotton farmers. need to come together and pool their Foundation’s work in organic see the What have been the In India, where C&A Foundation started its organic cotton work, farmers Q lessons learnt in the journey above? collective resources and efforts to create synergies. Foundation’s 2017 Annual Report are beginning to see the economic benefit of organic cotton. In 2017-18, Even though there is renewed interest in foundation partners in India reported that organic cotton, challenges remain. While Read more inspiring stories from Textile Exchange’s Insider Series here, which showcases an eclectic mix of industry leaders speaking from “inside” their organizations. BACK TO CONTENTS © | Page 11
Organic Cotton Round Table The Organic Cotton Round Table continues to regionalize Global OCRT Milan 2018: launch of the global assembly Textile Exchange’s Organic Cotton into focus, strengthening existing efforts In line with the OCRT’s current between regions, supply networks and Round Table (OCRT) provides the and initiatives, and shaping customized regionalization strategy, the 2018 Global global thinking to develop the pathway shared space needed for the organic approaches. OCRT in Milan will put the spotlight on to regional growth. cotton community to convene, learn the great work and collaborations taking more about issues facing the organic Textile Exchange first introduced the place in each region. OCRT Scholarship Fund cotton sector and, most importantly, find concept of the Regional OCRT in Izmir in 2017. In partnership with Izfas, it This will be achieved through the co- Textile Exchange has always striven to ways to take action. was designed to explore opportunities creation of a General Assembly for ensure that the OCRT is as inclusive After six years of approaching barriers for organic cotton in Turkey, Egypt and Organic Cotton. Delegations from each as possible and, with the new General to growth in organic cotton at the Central Asia, returning again in May region will come together alongside Assembly approach this year, it is more global level, the benefits of regionalizing 2018 (more on page 42). The success brands, retailers and other stakeholders, important than ever to have voices strategies has become increasingly in Izmir has now led to the launch of the to report on and discuss globally from each region and part of the supply apparent. Ultimately, the same issues Regional OCRT Burkina Faso, part of a their regional updates, activities and network in the room. We have therefore and opportunities exist for all, but new collaboration with Catholic Relief successes. The General Assembly established the OCRT Scholarship each region is at a different stage of Services on a series of organic cotton will take the informal linkages of the Fund, contributions to which will go development and therefore requires a focused activities in West Africa (more current OCRT to a more focused and towards providing support to farmers different strategy, alongside designated on page 26). mindful model of engagement between and other regional representatives who resources, investment models, and stakeholders, encouraging a two-way wouldn’t otherwise have the means to networks of supporters. We are at an exciting stage now flow of information between regional travel to Milan to participate in the 2018 where we can learn from our collective communities. All of the ingredients OCRT. Benefits also flow back to brands Textile Exchange has found that bringing experience in other regions, tap into that make the OCRT so valuable to and other stakeholders, who gain the people together at the regional level what works, and fast-track innovation stakeholders will remain, such as the opportunity to meet and learn from a from all parts of the supply network is and action! multi-stakeholder, accessible, and wider range of producers and regional a powerful way to catalyze action by catalytic principles, with the added representatives. bringing region-specific opportunities impact of strengthened interaction BACK TO CONTENTS © | Page 12
Organic cotton & the Sustainable Development Goals Learn how organic cotton helps achieve the SDGs: • Achieving SDGs Through Organic Cotton (webpage) • Achieving SDGs Through Organic Cotton (pdf) • Global Organic Textile Standards & the SDGs • How Textile Exchange is supporting the SGDs The U.N. Sustainable Development cities, regenerating and nurturing the How can the textile industry advance these targets? Goals — also known as Global Goals earth, its resources, and its people. or the SDGs — is an inter-governmental KPMG and Textile Exchange have just agreement of the United Nations and The UNDP has identified three priority released a report entitled “Threading 193 countries that provides a framework SDGs as central to its strategic plan - 1: the Needle: Weaving the SDGs into the of 17 specific, aspirational goals that End Poverty, 10: Reduced Inequalities, textile, retail and apparel industry”. address the social, economic and and 16: Peace, Justice and Strong environmental dimensions of sustainable Institutions. Organic cotton makes a A culmination of industry interviews, development. significant contribution to all three – NGO input, and desk research, the providing a market-driven solution to report highlights shared value examples Organic cotton can play an important poverty, reducing inequality by raising for companies in the sector grappling role in helping countries achieve the farm incomes, and promoting inclusive with how to integrate the SDGs into their SDGs. Millions of people around societies through its reliance on core business and global supply chain. the world live in rural communities cooperative working. Organic cotton The report builds on the SDG Industry dependent on agriculture. Holistic is the vehicle to organic communities, Matrixes, by taking a value chain organic farming systems based on the and success depends upon SDG approach to corporate action on the organic principles of health, ecology, 17: Partnership for the Goals, building SDGs specifically in the apparel sector. fairness and care build thriving and committed, interdependent supply resilient communities that attract people networks that share risk and reward. to stay on the land rather than move to BACK TO CONTENTS © | Page 13
Brand commitments to organic cotton Where organic cotton was once seen Superdry, for example, has said it will German Textile Partnership’s big shift towards organic cotton as “niche,” today, brands of all sizes be working with farmers and suppliers are making it a major component to support and help grow the organic The German Textile Partnership will have binding deadline and volume of their fiber and material portfolios. cotton sector in order to be able to is a multi-stakeholder partnership targets for all members. Alongside More and more brands and retailers reach their ambitious goal of using 100 with the objective of achieving individual goals, Partnership members are setting targets and signing up to percent organic cotton by 2040. social, environmental and economic have jointly agreed to use at least 35 commitments for increasing their use improvements all along the textile supply percent sustainable cotton by 2020, of organic cotton, encouraged by Other brands are making strong chain. Partners include the following with 10 percent of the total volume being growing evidence of the sustainability commitments too, including (but far stakeholder groups: business sector; organic cotton. The aim is to increase benefits of the fiber, and by the from limited to): Skunkfunk, Stella non-governmental organizations; trade the proportion of sustainable cotton to millennial generation bringing its buying McCartney, and EILEEN FISHER, unions; standards organizations; and 70 percent by 2025, with 20 percent power to the market. who have all committed to sourcing the German government. From 2018, being organic cotton. 100 percent organic cotton by 2020; the Partnership for Sustainable Textiles According to the Key Insights Mantis World, who commits to 100 Report from Textile Exchange’s percent organic cotton by 2021; and 2017 Preferred Fiber & Materials Nudie Jeans Co, who committed to 2025 Sustainable Cotton Challenge Benchmark, 60 percent of participants 100 percent organic cotton by 2017, who completed the organic cotton a target they have now achieved. In May 2017, 13 of the world’s In March 2018, it was decided that the module said they have set SMART Many more brands are committing to most renowned clothing and textile International Sustainability Unit would targets for uptake of organic cotton. using organic cotton as part of their companies, in the presence of His close. Given this decision, it was agreed Many are also part of public, group wider commitments to source all of Royal Highness The Prince of Wales, that Textile Exchange would take over commitments such as the German their cotton from more sustainable signed up to the 2025 Sustainable the role of the initiative’s Secretariat, and Textile Partnership or the Sustainable sources, such as those brands that Cotton Challenge. In October 2017, 24 we are thrilled to help keep this great Cotton Challenge. Such commitments have signed up to the Sustainable more companies signed up at Textile momentum going. are driving change in supply chains Cotton Challenge or are part of the Exchange’s annual conference. C&A as brands invest in finding innovative If your company is interested in signing German Textile Partnership. also joined in January 2018, bringing the and long-term solutions to secure up for the 2025 Sustainable Cotton total number of companies to 38. supply and build greater transparency. Challenge, please fill out the Pledge on The initiative is a catalyst to spur a the initiative webpage. shift in the market towards the use of more sustainable cotton. Through Participating companies are required this challenge, these companies have to independently publish their progress committed to ensuring that 100 percent through Textile Exchange’s Preferred of the cotton they use comes from Fiber & Materials Benchmarl Program. sustainable sources by 2025. BACK TO CONTENTS © | Page 14
Q&A with Crispin Argento at the farm.Through our mission, we are focused on integrity, supply, quality Q Where do you see OCA in a year’s time? Crispin Argento and impact. Our “farm first” approach brings together the entire supply chain OCA is the first market-driven multi- Executive Director, stakeholder initiative dedicated entirely to to invest in programs and innovations Organic Cotton Accelerator and support the farmers that dedicate the enrichment and promotion of organic themselves and their families to growing cotton. Since its inception at the Organic this extraordinary fiber for our benefit and Cotton Round Table (OCRT), OCA has set ambitious goals around growth, but Q Tell us about your vision for What are you most excited enjoyment. the organic cotton sector Q about doing in your new role? As we continue to come together as recognizes there are many immediate solutions that will lead to real impact in At OCA, we are committed to creating a sector around a shared vision and the near future. a prosperous organic cotton sector I am thrilled to be leading OCA at a time platform through OCA, we will finally realize the full potential of organic cotton Over the course of this year and the that benefits everyone—from farmer to when the sustainable cotton sector is and its contributions for people, planet next, it is OCA’s primary responsibility to consumer. To drive this commitment, gaining that critical momentum to bring and long-term prosperity for generations bring the sector together to leverage our OCA Affiliates and Partners have come lasting change. Personally, I am humbled to come. collective expertise, mobilize resources together to make organic cotton a and honored for the opportunity to and continue to demonstrate through viable, scalable and impactful solution work with people across the sector and our programs and interventions that for all. OCA is focused on accelerating around the world, who have dedicated What have been the key organic cotton is a viable and scalable investments and interventions that serve the sector – addressing challenges their lives to advancing organic cotton from farmers to spinners, brands to Q learnings in the journey above? solution from farmer to consumer. throughout the supply chain with activists, to the people on my team. It is OCA is a movement, a platform emphasis on the farm and farmers. their vision, expertise and commitment OCA is focused on engaging and and a tool to make organic cotton a that inspires my dedication to OCA’s and developing farmers, seed and scaling success. Where and how far we go As a global platform, OCA celebrates the sector’s success. That is what truly investment in the sector to accelerate as a sector will be entirely up to those the diversity within the cotton sector; we excites me. integrity, quality, supply and impact— that have made organic cotton their value the contributions that sustainable globally. This includes a cutting- edge business. It is our willingness, together Q cotton has made to advancing positive What is the key role you direct brand-to-farm sourcing service, as representatives of the sector, to impact all over the world. Our larger see OCA playing? farmer capacity building, industry- work and invest in its future. What that vision recognizes organic cotton’s role in leading farm business intelligence and As an accelerator, OCA was formed to looks like I don’t know, but I imagine it meeting 2030 Sustainable Development impact data, investments in non-GMO drive the solutions in the sector that will includes a future where organic cotton Goals and we take special pride in seed innovations, integrity and product lead to systemic and lasting changes is synonymous with positive economic, the vital role OCA plays in driving all traceability as well as the development through its investments and interventions social and environmental impact for all. sustainable cotton forward. of a fund to empower farm groups and scale sector investments. For more information, visit the OCA Read more inspiring stories from Textile Exchange’s Insider Series here, which showcases website. an eclectic mix of industry leaders speaking from “inside” their organizations. BACK TO CONTENTS © | Page 15
Stakeholder directory SWITZERLAND Who’s doing what across the globe? bioRe Foundation Non-profit This map locates the headquarters of some of the key international organizations working on organic cotton. Region-specific activities are detailed later in this report. C&A Foundation Non-profit UNITED KINGDOM CottonConnect FiBL Non-profit Research Institute Fairtrade HELVETAS Swiss International Intercoorporation Voluntary Standard Non-profit Pesticide Action Network UK Non-profit GERMANY GIZ Soil Association Non-profit Non-profit Global Organic Textile Standard (GOTS) USA Voluntary Standard Textile Exchange SOUTH AFRICA Non-profit IFOAM-Organics OrganiMark International Service Company Non-profit THE NETHERLANDS Organic Cotton Supply Chain Intervention: Standards/Chain of Custody Market making Accelerator (OCA) Non-profit Field-level Intervention: Field data & analytics Development Seed breeding Field capacity building & training Cotton cultivation/processing Informing & Convening: Education & awareness raising Market research & analytics Multi-stakeholder platforms BACK TO CONTENTS © | Page 16
Organic cotton pricing There is no universally accepted • Trade agreements between to farmers who are trading at the farm Country Fiber Seed Lint definition or formalized mechanism producers and buyers gate, often receiving their annual income type US$/kg US$/kg Avg. Avg. for arriving at a price for organic seed in one lump sum. Farmers sell to cotton or fiber. • Fairtrade certification on top of aggregators, ginners, mills, occasionally Benin S-M-L 0.55 2.10 organic certification. to brands, and also to traders in the Brazil S-M-L 0.80 2.40 The rule-of-thumb is to take a open market. Burkina Faso S-M-L 0.60 reference price (this is usually the The average price differential is China L-ELS 3.39 conventional cotton price quoted in the somewhere between 5 and 20 If farmers are vertically integrated into China S-M-L 2.93 country of origin or on the international percent, but can be as little as one the mills, or they have agreed trade and percent or as large as 100 percent. Egypt L-ELS 1.39 4.13 commodity market at a set time) price arrangements with a buyer, partner India S-M-L 0.72 1.90 and add a percentage increase to The price differential is supposed to company or organization, the price can India L-ELS 0.88 2.15 cover the organic value addition, and cover: be decoupled from the commodity possible compensation for a loss in market, or at least a minimum price is Kyrgyzstan S-M-L 1.80 yields. • Cost of production (and any agreed upfront, alongside other terms Mali S-M-L 0.60 losses in yield) and conditions of trade. Pakistan S-M-L 0.55 1.45 This differential is often called a “price Peru L-ELS 0.94 2.79 premium”, at Textile Exchange we • Internal Control System (ICS), Costs during manufacturing, such Senegal S-M-L 0.60 refer to it as a “price differential.” It is certification and inspections as factory certification, bookkeeping, Tajikistan S-M-L 0.55 1.88 agreed to between buyer and seller, chain of custody, product segregation, • Training and extension services Tanzania S-M-L 0.58 yet heavily influenced by conventional possibly machine cleaning and running commodity market prices. smaller volumes, need to be part of the Turkey S-M 0.71 2.08 • Investment in farming operations final costing, but it is the value-addition Turkey M-L 0.78 2.17 Differentials on the seed cotton or at the growing stage where the majority Uganda S-M-L 1.52 • A percentage may also go on the lint (ginned fiber) can range of the organic benefits are made. towards the collective needs of USA S-M-L 2.55 depending on factors such as: the community such as schooling, USA L-ELS 3.33 [See more on pricing models here: • Market conditions and price health care, and housing A World Beyond Certification: A best elasticity, and market variances (in practices guide for organic cotton • Research, development and the supply and demand cycle) trading models, Textile Exchange and investment in seed and farm • Quality and staple length innovations Kering, page 21-25.] • Country of origin The seed cotton price is the amount Note: This organic cotton pricing tables above and over page provide estimated figures only, based on conversations paid for the harvested cotton bolls with local experts. In 2016/17, according to our information, organic cotton prices ranged from US$/kg 1.45-3.33 • Amount of trash or contamination (with seed still attached). It is the seed (average of 2.34) compared to the Cotlook Index that ranged from 1.71-1.95 (average of 1.82) over the same time cotton price that is most important period. Please refer to graphs over page, and accompanying text that explains factors affecting price, alongside organic differentials. BACK TO CONTENTS © | Page 17
ORGANIC SEED COTTON & ORGANIC LINT COTTON PRICES (2016/17) Organic Cotton Lint Prices 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0 4.2 4.4 The organic lint price is the market price USA organic upland averaged 2.55 of post-ginned cotton fiber. The seeds USD/kg, around 40 percent over the Benin S M L have been removed (for seed selection Cotlook Index. USA organic Pima sold at Brazil S M L breeding or for processing by the 3.33 USD/kg. organic food or feedstock sector). The Burkina Faso S M L fiber is compressed and baled for the In India, sales of organic (short, medium, textile industry. This is the product that long) fiber averaged 1.90 USD/kg, China L EL feeds spinning mills, sold to spinners by around 7% more than conventional. ELS China S M L either farmers, ginners, or traders. fiber averaged 2.15 USD/kg. Egypt L EL Turkish organic lint prices averaged Peruvian organic (high quality ELS pima) lint prices averaged USD 2.79, but India L EL 2.17 USD/kg, ranging from 1.90 to 2.32 USD/kg, depending upon quality prices varied through the year from USD India S M L and staple length. Turkish organic 1.95 to 3.63. Kyrgyzstan S M L fiber averaged 10 percent higher Brazil produced Fairtrade organic cotton than conventional prices on the Izmir in North West of the country. The fiber Mali S M L Commodity Exchange. prices ranged between USD 1.80 and Pakistan S M L In China, organic fiber prices averaged 3.00 per kg, averaging 2.40 USD/kg. Peru L EL 2.93 USD/kg (differentials ranging 15-35 Organic fiber from Kyrgyzstan, Tajikistan percent over conventional). Organic ELS and Pakistan was priced between 1.45 Senegal S M L prices averaged 3.28 USD/kg, up to 60 and 1.60 USD/kg. percent higher than conventional ELS. Tajikistan S M L Tanzania S M L COMMODITY MARKET FOR CONVENTIONAL COTTON (2016/17) Turkey M L 3.0 Turkey S M 2.5 USA S M L USA USD/Kg Cotton Fiber 2.0 China USA L EL 1.5 India 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0 4.2 4.4 1.0 Turkey US$ per kg 0.5 Organic Seed Cotton Price (2016/17): Range (Max/Min) Average Price 0 Organic Lint Cotton Price (2016/17): Range (Max/Min) Average Price 16 16 6 16 16 17 ‘17 7 7 17 17 7 t ‘1 r ‘1 r ‘1 l ‘1 g‘ p‘ v‘ c‘ n‘ y‘ n‘ Fibre Length: S Short M Medium L Long EL Extra Long b Ju Oc Ma Ap No Ma De Ja Ju Au Se Fe BACK TO CONTENTS © | Page 18
Fiber classification Global organic cotton fiber classification mapping KYRGYZSTAN TURKEY CHINA Jala-Abad Aegean Xinjiang L YC:50Ne L MIC:4.1-4.4 | YC:45-50Ne M L MIC:4.4 | YC:34-50Ne USA EGYPT Belbeis / Fayoum Elbeheira Izmir Gansu Texas TAJIKISTAN M MIC:4.3-4.9 | YC:40Ne M MIC:3.5-4.7 | YC:34-40Ne S M MIC:4.3-7.6 | YC:10-40Ne EL MIC:4.3-4.9 | YC:50-80Ne Fergana Valley/Khujand Hubei M MIC:3.91 | YC:40Ne M MIC:4.7 | YC:34-40Ne BRAZIL Piaui M MIC:4 | YC: 30-40Ne Ceara M MIC:4 | YC: 34-50Ne INDIA Rio Grande Do Norte M MIC:4 | YC:30-40Ne Rajasthan M MIC:3.5-4.9 | YC:30-40Ne Paraiba S M MIC:4 | YC:10-40Ne Madhya Pradesh M MIC:3.2-4.9 | YC:30-40Ne Pernambuco M MIC:4 | YC:30-40Ne Odisha M L MIC:3.7-4.5 | YC:24-45Ne PERU Andhra Pradesh Lambayeque L EL MIC:3.6-4.9 | YC:40-80Ne L EL MIC:3.2-6.2 | YC:35-60Ne Tamil Nadu L EL MIC:2.2-3.8 | YC:40-120Ne Tarapoto S MIC:3.2-6.2 | YC:10-40Ne Karnataka BENIN MALI TANZANIA L EL MIC:3.0-3.5 | YC:40-90Ne Chincha Glazoue Banikoara Shinyanga L MIC:3.2-6.2 | YC:35-50Ne M YC:20-40Ne Maharashtra M YC:20-40Ne M YC:20-40Ne M MIC:3.5-4.2 | YC:24-40Ne Banikoara Singida Gujarat Fiber Length Accronyms M YC:20-40Ne SENEGAL M YC:20-40Ne S M MIC:3.2-4.5 | YC:10-40Ne S Short MIC = Fiber Micronaire Koussanar, Senegal M YC:20-40Ne M Medium Ne = YC unit - English BURKINA FASO System (1 Ne = 1 Hank/ lb) UGANDA PAKISTAN L Long Bobo Dioulasso YC = Yarn Count M L YC:20-60Ne M MIC:3.5-4.9 | YC:24-36Ne M YC:20-40Ne EL Extra Long 3. Kering and Textile Exchange, 2017. Organic Cotton - A fiber classification guide.
Africa Photo: C&A Foundation, Tanzania BACK TO CONTENTS © | Page 20
2+ S + 98 Africa MALI REGIONAL PRODUCTION 1+99+S SENEGAL 13+87+S 130 MT UGANDA 4 MT 765 MT 24,380 46,555 29% 0+100+S ETHIOPIA Organic Farmers Organic Certified Fiber (MT) Land (ha) Year-On-Year Growth In Conversion 5,863 18,978 5% Organic Cotton Organic In-Conversion Share of Global Organic Fiber (MT) Land (ha) Cotton Production 8+92+S BURKINA FASO 5-YEAR PRODUCTION TRENDS 491 MT 4,000 12+88+S BENIN 3,500 Benin 3,000 Burkina Faso 699 MT Fiber Production (MT) 2,500 Mali 64+36+S 2,000 Senegal TANZANIA 1,500 Tanzania 1,000 Uganda 3,773 MT 500 Madagascar 0 2012-13 2013-14 2014-15 2015-16 2016-17 BACK TO CONTENTS © | Page 21
Africa Tanzania Senegal Burkina Uganda Benin Faso Mali In East Africa, Tanzania continues to BENIN account for the vast majority of the 2,715 7,369 1,363 277 4,337 8,319 region (as well as the continent’s) In Benin, the partnership between the Organic Farmers organic cotton production, followed by national Organization for the Promotion Uganda. Ethiopia will also join the mix in of Organic Agriculture (OBEPAB) and 2017/18 as PAN UK’s project reaches PAN UK enabled the recruitment of two 3,384 3,731 9,865 92 16,883 12,600 Organic Certified certification. additional female field agents. Farmers Land (ha) have been trialing new methods, such In West Africa, the 2016/17 season as using palm oil processing residue as saw favorable climate conditions which, fertilizer. As a result, producers achieved 699 491 130 4 3,773 765 combined with training and support Organic Cotton the highest organic cotton yield in the Fiber (MT) received by farmers in Benin and West Africa region, at 226 kg fiber/ha. Burkina Faso, resulted in an increase in production in each country except Mali, BURKINA FASO no data no data 569 no data 18,409 no data where investment is lacking. Organic In-Conversion In Burkina Faso, the RECOLTE project, Land (ha) While farmer numbers in the region led by Catholic Relief Services (CRS), decreased by 2 percent, production continues to support farmers of the 72% 5% 4% 427% 17% 155% increased by 33 percent, reflecting National Union of Cotton Producers of Fiber Year-On-Year improvements in yield experienced in Burkina (UNPCB) in training to improve Benin and Burkina Faso. These two production techniques. This resulted countries accounted for the majority (53 in an impressive yield increase of 63 0.6% 0.4% 0.1% 0.004% 3.2% 0.7% and 37 percent, respectively) of West percent in 2016/17. RECOLTE is also Share of Global Organic Africa’s total organic cotton production in involved in developing the first organic Cotton Production 2016/17. cotton gin in West Africa, as well as a new seed development initiative that 0.4% 0.2% 0.05% 0.1% 9.2% 2.7% aims to improve the quality and quantity Organic Share of National of non-GMO seed in Burkina Faso. Cotton Production Textile Exchange is partnering with CRS on a series of activities in Burkina Faso in 2018, including a Regional Organic Cotton Round Table. Read more about this and other CRS/ RECOLTE project updates on pages 26 and 28. BACK TO CONTENTS © | Page 22
Africa MALI SENEGAL Mali’s production of organic cotton, In Senegal, Yakaar Niani Wulli (YNW), which reduced significantly in 2015/16 which was the main producer group in when the group MOBIOM ceased previous years, has ceased producing production, remained stable in 2016/17. organic cotton after struggling to find a However, it is expected to decrease market for it. again next year, largely due to reduced farmer training and support. This support A new farm group was created named was previously provided by HELVETAS’ SODEFIX, located in the district of organic cotton program, which has Missirah Wadene in the west of the now ended. The National Federation of country. SODEFITEX produced 4 MT Producers of Organic and Fair Farming of organic cotton fiber in 2016/17 but, in Mali (FENABE), which is made up of unless the market situation changes, little some of MOBIOM’s previous farmers growth is anticipated in the near future. but also many newcomers, sells its organic cotton through The Malian Textile Development Company (CMDT) but is finding it lacks the support required to grow the project. There is, however, a new project being initiated that could turn this situation around (see page 28). Photo: Pesticide Action Network UK, Ethiopia BACK TO CONTENTS © | Page 23
Africa TANZANIA with plans to significantly expand its land area and farmer numbers over the In Tanzania, an impressive 9.2 percent coming years. of the country’s overall cotton production is organic, which is the second highest UGANDA rate globally (after Kyrgyzstan). This figure is expected to grow further in the Gulu Agricultural Development Company coming years, with both of the countries’ (GADC), which accounts for all of organic cotton producer groups, bioRe Uganda’s organic cotton production, Meatu and BioSustain, expanding their saw an additional 2,319 farmers production. become certified in 2016/17, resulting in a 155 percent increase in production, bioRe Meatu has over 1,000 ha currently from 300 to 765 MT fiber. This follows in conversion to organic. The group a recent development project that buys cotton from farmers based on included agricultural training for farmers. floor prices set by the government every 2017 saw the start of a 3-year support season, with a 15% premium added program, which aims to strengthen based on the average price of the last village communities, provide financial five years. training, and establish self-organized support groups. BioSustain is collaborating with the C&A Foundation and Cotton House Africa, “ This year’s crop has confirmed the good performance of the newly introduced seeds with all organic farmers registered with bioRe Tanzania Ltd. The higher yields as well as the good fiber quality (28mm) are benefitting both the farmers and the industry alike. It is a great success of the team of bioRe Tanzania Ltd. that the efforts of more than twenty years of promoting organic practices are now materializing in improved livelihoods of farmers. Christa Suter Managing Director, bioRe Foundation Photo: Top and bottom left: bioRe, Tanzania; Bottom right: C&A Foundation, Tanzania BACK TO CONTENTS © | Page 24
Q&A with Prama Bhardwaj in manufacturing facilities in some the West. Similarly, brands and retailers countries – notably Kenya and Ethiopia. in the West would be wise to consider Prama Bhardwaj new supply lines from Africa where CEO and Founder, Mantis World | However there is so much more to transparency is readily available and Chair of Textile Exchange’s Pan-Africa do to increase yields, provide support lessons can be learned from other textile for farmers and to create markets for producing regions. The availability of Sourcing Working Group the cotton. In some countries, there raw material including organic cotton are many multi sector actors who already exists – I hope in the medium are working collectively in the region Q other regions where intensive farming of term we will see the development and Why Africa? conventional cotton has been the norm. from NGOs, brands and retailers, growth of a high quality supply chain. Government agencies, producers In 2015 I was chairing a breakout At Mantis World we have always and suppliers. This is the sort of Through multi stakeholder discussion, session on Africa at the OCRT in sourced from Tanzania since we started collaboration needed to bring about I believe Governments will hear a loud Hamburg. There was a strong desire 18 years ago. Not just the raw material, meaningful and sustainable long term and clear message of what is needed from brands and retailers to explore but finished garments and we have now growth across the region. at the policy and implementation level to sourcing from Africa and from farming switched all our Tanzanian production really propel growth. The supply chain groups who needed markets for their organic cotton, but no one really knew of garments to organic cotton certified to GOTS and OCS standards. So Q Where next? needs to be developed so that much needed value addition is kept within how to connect and where to go. As a we know that it is possible albeit not the region, bringing with it technology, Sub sahara Africa is diverse and young result the Pan Africa Sourcing Working without challenges and hope to act as employment and development. The – the average age is 18 compared with Group was created to map, connect an example and source for other brands work Mantis World is doing with vertically the average age in Europe of 40. So and grow sourcing of organic cotton and and retailers. integrated factory Sunflag Tanzania many of tomorrow’s consumers and sourcing in Africa. The interest in the keeps the whole value chain in one Q How Far have we come as innovators will be African. I hope to see work of the Group demonstrates clear country in Africa and so we know that an industry? consolidation and growth of trade within signals for growth and understanding of it is possible. What will be needed is the region as African consumers will this sector. Interest in the region has never been more investment along with a favourable need supply of textiles, and a growing stronger. At Mantis World, we have policy climate to really grow the sector Sub-Sahara Africa affords several number will want to move away from more customers than ever asking for and make it more commercially viable. benefits for sourcing organic cotton. buying the fast fashion castoffs from “made in Africa” garments. We are Many countries have banned seeing huge growth of organic farmers GMO cotton, and because of the in Tanzania and Uganda, the regional small number of actors in the field, OCRT bringing together actors in transparency and integrity are assured. West Africa and an exciting project There is huge potential for poverty of in conversion cotton in Ethiopia. reduction without the damaging There has also been a dramatic rise environmental impact we have seen in Read more inspiring stories from Textile Exchange’s Insider Series here, which showcases an eclectic mix of industry leaders speaking from “inside” their organizations. BACK TO CONTENTS © | Page 25
Africa What Textile Exchange is doing “ We are excited and eager to partner with Textile Exchange in growing the organic cotton sector in Burkina Faso and the region. Connecting Regional Organic Cotton Round Table | Burkina Faso to different markets, thousands of organic cotton producers, September 28, 2018 more than half of whom are women, for inclusive and sustainable Textile Exchange is delighted to be interviews that were carried out for the development are our common goals. collaborating with Catholic Relief MOSP by Change Agency. Boubacar Kamissokho Services (CRS) on a series of organic Chief of Party, cotton focused activities in West Held during the Salon International du CRS RECOLTE Project Burkina Faso Africa. These include the launch of a Coton et du Textile (SICOT, 27-28th new Regional Organic Cotton Round September), the Regional OCRT is Table (OCRT) in Koudougou on 28th part of four days of events focused on Organic and Fairtrade Cotton Coalition West Africa September 2018, a Market Opportunity organic and fair trade cotton in West Scoping Project (MOSP), and a Africa, including a workshop of the Faso, Senegal and Benin together documentary-style video. The agenda Organic and Fairtrade Cotton Coalition with Aproca, ecos and FiBL and in for the Regional OCRT will be framed West Africa on 26th September, and a partnership with Fairtrade International around the results of the research field trip on 29th September. and Textile Exchange. The aim of this initiative is to establish and maintain The Organic and Fairtrade Cotton market access for tens of thousands Coalition West Africa was launched of small farmer families in West Africa Pan-Africa Sourcing Working Group in December 2017 by six producer producing organic-fairtrade cotton and organizations from Mali, Burkina other organic crops. Textile Exchange’s Pan-Africa Sourcing Virtual meetings are held quarterly, with Working Group was initiated at the occasional in-person meetings, usually 2016 Organic Cotton Round Table in held during the annual Global OCRT. Salon International du Coton et du Textile Hamburg, when it was proposed that The ultimate objective of the group is a group be established to work on the to develop and support the market The Salon International du Coton et increase international trade by creating various priorities that had been identified for preferred/more sustainable cotton du Textile (SICOT) aims to expose and linkages between cotton companies, for expanding organic cotton production produced in Africa. The current focus of promote Burkina cotton as an industry the National Cotton Producers Union of in Africa and better connecting to the group is to map the African cotton for capital investment into cotton Burkina (UNPCB), and buyers from all supply networks. The group is chaired and sustainability sector by building processing. It will be an opportunity to over the world. by Prama Bhardwaj, CEO of Mantis a stakeholder map and a supplier World, and currently has 23 members. directory. If you’d like to find out more about Textile Exchange’s Pan-Africa Sourcing Working Group or Regional OCRT, please contact Materials@TextileExchange.org. BACK TO CONTENTS © | Page 26
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