Cotton Export Earnings Fall Massively

cottonUganda’s cotton export earnings in 2013 dropped by 58.6percent due to a fall in the quantity of exported cotton. Cotton earnings declined from 76 million dollars in 2012 to 31.42 million dollars in 2013.

The global prices of cotton in 2013 rose by 3.3 percent, meaning Uganda could have earned more if it had exported more cotton. However, the statistics released by Bank of Uganda indicate that cotton export quantities plunged by 60 percent to 92,517 tons in 2013.

The Cotton Development Organisation – Uganda (CDO-U) did not respond to URN’s request for information on why exports had fallen even after the rise in prices on the global scene. Uganda had the highest ever cotton earnings at 86 million US Dollars in 2011, a figure attributed to better prices that year, even after lesser bags were exported. In 2012, production hit its level, however the price dipped slightly which led earnings to slow. In 2013, the trend indicates that Uganda simply didn’t have better crop yields.

Most cotton producing areas in Uganda are in Eastern region, stretching all the way upwards to the districts surrounding Lake Kyoga and parts of Northern Uganda.

The Uganda Cotton Ginners and Exporters Association (UCGEA) has always said the challenges for the cotton sub-sector in Uganda is that it is mostly exported in raw form. This has been attributed to the limited strengths of farmer groups, processing inadequacy and limited finance.

In December 2013, Uganda and other Least Developed Countries (LDCs) at the World Trade Organization (WTO) talks in Bali, Indonesia negotiated a deal to have cotton exported to developed markets without quotas. For the cotton sub-sector this was much needed positive news. However, the challenges still remain greater. One has been the consistent disagreements between UCGEA and CDO-U, as the later has been accused of mismanaging the sector. CDO-U accuses some of the exporters of being errant.

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