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October 13, 2009

Uganda's cotton sector shrinks

by Dorothy Nakaweesi

Uganda's cotton industry is shrinking affecting the commodity's export revenue, which is estimated at $16 million (Shs27 billion) according to records from Uganda Bureau of Standards.

The shrink of the once country's leading cash crop and foreign exchange earner until 1969-70, is being attributed to the hostile weather and price instabilities.

Reports from the Cotton Development Organisation (CDO) indicate that production of the crop is fluctuating year-on-year.

"Last year production dropped by 50 per cent from 134,000 bales produced in 2007 to 65,000 bales recorded in 2008. However, this year's season saw the country's production recover to 125,000 bales," said a source from CDO who preferred anonymity. The source said because most of Uganda's cotton produced is exported raw with little or no value added, this has denied the country a premium price at the international market.

Uganda's opportunity to export her textile duty free to the US under the Africa Growth Opportunity Act (Agoa), has been frustrating, rendering little or no profit for the country.

Tri-Star Apparel, the pioneer company which had embarked on exporting to the US under this arrangement, ceased production and Phoenix Logistics, which is still operational, is constrained.

However, the private sector is fronting the Cotton Industry as one of the priority sectors that they want the government to address through the Presidential Investors Round Table.

"Because of this decline, cotton is one of the priority sectors that the private sector has fronted for rescue by the government through the Presidential Investors Round Table (PIRT)," Uganda Investment Authority executive director Dr Maggie, said.

Dr Kigozi said value addition to Uganda's cotton into textiles and clothes are some of the opportunities that investors need to inject money into.

The other countries where Uganda exports her cotton/textiles include: Japan, Kenya, Portugal, Rwanda, Sudan, Singapore, UK, Mauritius, Ethiopia, DR Congo, China, Hong Kong and Sudan.

Today, Uganda has over 200,000 - 400,000 cotton farmers, 45 ginneries, 15 oil mills, three vertically integrated textile mills and 25 textiles and apparels Small Medium Enterprises (SMEs). Small-holder farmers (0.5 to 2.0 ha) predominate at present.

Information from UIA indicates that the government has plans to boost production by introducing large scale commercial farming.

"In order to ensure uniformity and easier quality control in the production of lint and yarn, priority has been given to the production of a single variety of long staple and Bukalasa Pedigree Albar (BPA)," Dr Kigozi said.

Uganda as a member of Liverpool Cotton Association (UK), Bremen Cotton exchange (Germany), Cotlook (UK) and the International Cotton Advisory Committee (USA), gives it strength to network and source for markets.

The government of Uganda is laying a foundation for improved yields through the Strategic Exports Initiative.

CDO, the institution that regulates the cotton sector, has improved quality controls and quality certification through the establishment and enforcement of Ugandan Official Cotton Standards, recognised internationally.

The Monitor

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