Prime
Govt has no plan to support free-falling cotton exports
What you need to know:
- The Agriculture Ministry says it has no immediate plan for cotton, whose earnings have in the last five years, fallen from $41.69m in June 2020 to $21.43m
Cotton earnings have dropped by more than half in the five years to June 2024, according to data from Bank of Uganda.
However, at the weekend government indicated it had no immediate plan for the cash crop, noting that it had shifted from focusing on one crop to enabling people deal in crops that “make economic sense”.
“If cotton production is collapsing, that tells you that people are finding alternative enterprises. So, government cannot have a plan of fighting for a crop even when farmers are not going to benefit. So, I don't have a plan for cotton,” Agriculture Minister, Frank Tumwebaze, told Monitor in response to questions regarding the drastic fall in both export volumes and earnings.
Bank of Uganda data, which highlights the performance of export products over 20 years, indicates that in the five years to June 2024, cotton earnings, which for long had been a key foreign exchange earner, dropped by 51.4 percent, the lowest since June 2015 when earnings fell to $18.18m from $77.59m in June 2012.
Both earnings and volumes have consistently declined since June 2020, but have since worsened, with volumes falling by 100,340 kilogrammes in the five years to June, while value has fallen by $20.26m.
For instance, in the year to June 2020, Uganda exported 168,999 kilogrammes of cotton, earning $41.69m, but subsequently declined to 104,712 kilogrammes worth $29.01m in the year to June 2021.
Both volumes and value declined further in the year to June 2023, falling to 65,344 kilogrammes and earnings of $22.19m, before declining further to 68,659 kilogrammes ($21.43m) in the year to June 2024.
Cotton earnings since 2019
Year | Volume | Value |
2019/20 | 168,999 kg | $41.69m |
2020/21 | 104,712 kg | $29.01m |
2021/22 | 65,368 kg | $30.19m |
2022/23 | 65,344 kg | $22.19m |
2023/24 | 68,659 kg | $21.43m |
Bank of Uganda did not explain the decline, but Mr Tumwebaze said government was now promoting farming that makes economic sense by discouraging subsistence farmers from growing cotton, because “it doesn't make sense economically”.
“Large scale farmers with extensive farming methodology can farm cotton. Government will support them with research to produce quality cotton seed among other interventions like extension support. Our plan is to promote agribusiness based on enterprises' selection process informed by the dynamics of profitability. If you have small land, get out of cotton and leave it to large-scale farmers. Our plan is to help large-scale commercial farmers who need mechanisation, he said.
Cotton remains an important export across the globe given its continued expansion in the global textile market, which is expected to grow to $1.41 trillion by 2028, according to Grand View Research, with a compound annual growth of 4.4 percent between 2021 and 2028.
Data from Uganda Manufacturers Association indicates that 90 percent of Uganda’s cotton is exported in raw form, with only 10 percent processed locally.
This is largely due to an undeveloped cotton industry, whose ginning capacity stands at a million bales, but has less than 30,000 spindles, less than 500,000 metres of fabric weaved per day, less than 200,000 tonnes knitted daily and an annual garment production of 10m garments of uniforms for pre-primary, primary and secondary school children.
Government had earlier indicated that through the 2021/25 Cotton, Textile Apparel Strategy, the cotton industry would be revitalised to avert the failures of the National Textile Policy 2009, under which cotton earnings fell to as low as $15m in the mid-1990s.
However, it was not immediately clear which direction government would now take regarding one of Uganda's longstanding cash crops.