Understanding Cotton Demand and Promoting Origin The Example of African Cotton

Africa, both francophone as well as anglophone, has traditionally been an important cotton production base. Cotton produced in Africa is mainly exported by international merchants to Asia, where today almost 80% of world cotton fibre is processed into yarn. Fibre transformation rates in Africa are at a historic low, with only 5% of francophone and 43% of anglophone African cotton being processed on the continent. Thus, on average, 83% of sub-Saharan African cotton is exported as lint, almost exclusively through intermediaries. The high rate of cotton exports demands a closer link with the market, more so with the emergence of strong new competitors such as Brazil and India. Closer interaction with clients and cotton consumers is vital to maintain international competitiveness. African countries have traditionally focused their attention on production rather than on the market. Market linkages towards Europe were secured by Western (often French) mother companies, and since 2005 increasingly towards Asia by international cotton merchants. A market-oriented culture did not develop as market-related aspects were handled outside of Africa. Moreover, in the past cotton almost always sold easily as world cotton demand was higher than world cotton production. As a result, direct market linkages with clients did not develop and therefore no direct feedback loop from spinning mills back to ginning companies and producers emerged. This is a strategic disadvantage in a declining market, as was the case in the 2008/9 season, and in slow growing markets as forecast by ICAC for the seasons to come. Therefore, Africa needs to find a strategic solution to integrate a market feedback loop into its operations and link market-related activities closer to adaptations at the production level.