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USDA review of cotton production in West Africa

04 December 2011

The US Department of Agriculture (USDA) has posted a review of developments in the West African cotton sector, where cotton production in 2011/12 is projected to grow by 36% to 1.13 million tonnes.

Burkina Faso produced 337,556 tonnes of seed cotton in 2010/11, ‘a seven percent decrease from MY2009/10’. This was below government projections, following farmer protests which included a boycott in response to low prices and high inputs costs. In response the government reduced fertiliser and urea prices, but declined to increase the agreed purchase price. Prices were however increased by 35% for the 2011/12 season, with scope for ‘an additional rebate …if world prices continue to increase through the campaign’.

USDA notes a number of ongoing initiatives in the cotton sector in Burkina Faso, including:

  • a review of bio-safety law linked to the use of genetically modified (GM) cotton;
  • the success of an initiative from 2007 to 2011 with an American retailer to promote organic cotton (production rose from 600 to between 2,000 and 4,000 tonnes, with significant quality improvements);
  • an ongoing French government-financed income stabilisation facility;
  • the publication of a study supported by West African Development Bank and Centre for Development of Enterprise on the development of regional cotton industry units (which found that ‘a textile industry could process 25 percent of local cotton production and generate 50,000 jobs’, but with ‘unreliable and unaffordable electricity’ a major constraint);
  • a €60-million ADB cotton sector initiative (for Burkina, Benin, Mali and Chad) aimed at improving training and access to inputs, improved seeds, road improvements and enhancing overall competitiveness;
  • the ongoing process of privatisation.

In Mali, production increased 7% in 2010/11 to 243,588 tonnes. This followed action by the state cotton company (CMDT) to ensure timely payment of farmers, improve provision of subsidised inputs and increase the farm gate price. In addition, CMDT reinforced its extension service. Production was however affected by poor rains. For 2011/12, the government forecasts production of 500,000 tonnes, although USDA estimates production of 425,000 tonnes.

Efforts to privatise CMDT have been under way since before 2008. These have included: the creation of a national cotton sector strategic framework; support for stronger inter-professional organisations; staff restructuring and restructuring of the company into 4 units in preparation for privatisation. Following a tender a Chinese company (Yue Mei) will operate two of these companies (operating 7 ginneries in 3 regions with a production capacity of 326,000 tonnes), with the privatisation process to be completed by the end of 2011. The government has asked Yue Mei to process 20% of production in Mali.

In Côte d’Ivoire, production in 2010/11 was 174,880 tonnes, 19% lower than the government target. Production in 2011/12 is expected to reach the government target of 200,000 tonnes following a 26% increase in farm gate prices. At 265 CFA francs per kg, this will provide the highest price in the region: there is strong competition in the country for land use from rice, corn and particularly cashew nuts, where production has risen from 40,000 tonnes to 400,000 tonnes in 10 years.

Cotton production in Chad in 2010/11 was 52,570 tonnes. The state-run cotton company has increased prices to producers by 14% to promote production of 60,000 tonnes on 2011/12 (the first increase in 3 years, with inputs subsidies also being provided). Loan financing for producers has also been expanded. USDA however suggests that inadequate fertiliser supplies are likely to bring production down to around 40,000 tonnes. No progress is being made on restructuring and privatising the cotton company, whose financial position is rapidly deteriorating.

Senegal produced 26,000 tonnes of cotton in 2010/11, but of a consistently high quality. The aim is to almost double this to 50,000 tonnes in 2011/12, by increasing cotton prices by 24%, improving fertiliser distribution, improving financing for cotton farmers and providing a refund on fertiliser costs if the production target of 50,000 tonnes is met. USDA however estimates likely production at 40,000 tonnes. The total cost of these government measures is put at US$12.6 million. A 15% discount on fertiliser prices has also been negotiated with the Indian-owned Senegalese Chemical Industries. Production growth is taking place as part of a 3-year plan to boost cotton production.

West African cotton production (’000s of 480-lb bales)

  2009/10 2010/11 2011/12*

Percentage change 09/10–11/12

(%)

Burkina Faso 700 652 830 +18.6
Mali 440 470 820 +86.4
Côte d’Ivoire 356 337 386 +8.4
Chad 67 101 77 +14.9
Senegal 35 50 77 +120
Total 1,598 1,610 2,191 +37.1

* estimate

Editorial comment

USDA’s forecasts for West African cotton production in 2011/12 would appear a little optimistic. In 2010/11, despite high prices on the international markets, cotton production in Africa did not reach the levels expected. The main reason, apart from basic climate conditions, is that cotton growing is practised by small family units, which are not as responsive to the market (in comparison to other African producers where sectoral reforms have already been carried out, and to Brazilian and Australian producers).  Cotton farmers and the big cotton companies also suffered severe effects from the 5 years of crisis, without any support from subsidies.

With prices paid to cotton producers at a historic high in the CFA franc zone, the area under cotton was on an upward trend, but production grew only 5% for the continent overall, raising Africa’s share of world production from 4% in 2010/11 to 5% in 2011/12.

Even though the market price has halved since March 2011, when it reached US$2/lb, it is still higher than the African cotton companies’ production costs, and thus gives them a margin for new investments. Improving yields is one of the five aims in the African Cotton Association’s (ACA’s) strategic plan for 2011–16.

Another of the five aims in the ACA strategic plan is improving the quality of African cotton, eradicating all contamination in cotton produced over the next 5 years. While African cotton is no more contaminated than that from other sources, it has a bad image that is unjustified by the facts. Alongside this strategic aim, the ACA is planning to promote African cotton with trade missions to cotton-consuming countries, particularly in Asia.

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