According to a USDA report, the West African 2013/14 cotton season (August to July) started late as a result of irregular rains, requiring farmers to replant.
West African seed cotton production tonnes for marketing years 2011/12–2013/14
|2011/12||2012/13||2013/14 (projected)||2011/12||2012/13||2013/14 (projected)|
Source: USDA, ‘2013 West Africa: Cotton and products’, 26 November 2013 (see below)
The report noted that Burkina Faso will continue to be the top West African cotton producer, with production of 700,000 tonnes, 69% above the 2011/12 production level. Prices offered to farmers were 7% below the previous season but fertiliser prices were up 15%.
Cotton production in Mali is projected at 450,000 tonnes, 7% above production in 2011/12. Farm gate prices in Mali were 2% below the previous season, while subsidies kept fertiliser prices stable.
USDA expects Côte d’Ivoire to attain production of 400,000 tonnes, some 56% above the 2011/12 level. The government of Côte d’Ivoire has consulted stakeholders over the future policy framework. Planned reforms include:
- privatisation of “production and distribution of cotton seeds”;
- “improvement of input delivery”;
- “designation of specific zones to individual cotton companies”;
- a guaranteed farm gate price of “at least 60 percent of the [cost, insurance and freight] (CIF) price”.
Farm gate prices have been set at 6% below last year’s level, with government subsidies not yet determined. Fertiliser prices are currently projected to be 18% above last year’s prices, and urea prices are forecast to be up by 11%.
Senegal is forecast to achieve cotton production of 31,000 tonnes, some 22% down on the initial target but 24% above the 2011/12 production level. As a result of government subsidy policies, fertiliser prices have been maintained at last season’s level.
By contrast in Chad, government projections suggest that cotton production will be up 10% on initial forecasts at 100,000 tonnes. USDA, however, maintains that production will be 90,000 tonnes as forecast, still 15% above the production level in 2011/12. According to USDA, cotton yields in Chad are low by West African standards, with fertiliser applied to only a third of the area under cotton.
Overall, although 5% below the initial target of 1.75 million tonnes, West African cotton production is still projected to be 46.5% above the levels attained in 2011/12.
In December, ACP ministers reiterated their call for the EU and US to fully decouple direct aid payments in the cotton sector, and for international support for the efforts of ACP cotton producers to move up the value chain.
Deutsche Bank has raised concerns that a shift in Chinese agricultural policy away from price support to direct aid to farmers could serve to bring down domestic prices in line with world market price levels, serving to reduce import demand and exert a downward pressure on international prices. A major policy review for the cotton sector is scheduled for 2014. It is suggested that China will review its cotton policy in the light of its comparative advantage and “the availability of international cotton resources to meet China’s textile industry demands”.
In view of these factors, USDA has forecast a halving of Chinese cotton imports in the coming season: Chinese imports in the first quarter of the 2012/13 season were already down 26%.
With a trend towards expanded cotton production in the West and Central African countries reviewed (up 46.5% since 2011/12), pending changes in Chinese policy, involving a shift from price support to direct aid to farmers, could carry significant implications for global cotton prices. Against this background, the absence of any references to Chinese cotton policy issues in the ACP Council of Ministers’ resolution can be seen as surprising. Developing a common ACP approach to establishing a dialogue with the Chinese government on pending changes in its cotton policy could be considered an important new area for ACP initiative on a matter of long-standing concern, namely the adverse effects of domestic policies on global cotton markets.
Although the WTO Ministerial meeting in December 2013 potentially offered an opportunity for the ACP/LDC group to lobby the Chinese government for duty-free, quota-free access for LDC cotton exports, it is not yet clear whether this actually formed part of the ACP strategy around the Bali WTO Ministerial meeting.