Cotton has since March experienced low export earnings. PHOTO | FILE
Cotton exports in both value and volume recovered from a slump, surging in the period ended October, according to data from Bank of Uganda.
Bank of Uganda data indicate that cotton earnings, which is one of Uganda’s traditional exports, in October surged to $5.9m (Shs21.8b) recovering from a slump of $0.13m (Shs481m) in May, the worst performance since October 2016 when the country fetched only $0.12m (Shs444m).
During the period, the report indicates, Uganda exported 25,289 bales up from 519 bales in May.
Ms Damalie Lubwama, the Cotton Development Authority principal monitoring and information manager, told Daily Monitor, cotton demand was low during March, April and May, noting the cotton calendar tends to be more active towards the end of the year.
“The current rise in volume and value is because we are entering a 2021 marketing season,” she said, noting there has been increased demand by apparel manufacturers, especially in Asia and Europe.
Cotton is one of Uganda’s traditional cash crops, earning the country both export income and boosting the country’s local textile and apparel industry.
It is estimated that the cotton value chain employs about 2.5 million people, working mainly in the production and marketing of primary products, such as textiles and garments and by-products, such as soap, edible oil and animal feed.
However, the industry, which had for years been a beacon of Uganda’s rising export market, has gone through headwinds and is being worsened by Covid-19 that has largely affected global markets. Ms Lubwama said the industry is experiencing a reduction in demand as apparel manufacturers see a fall in demand for finished products such as clothes.
“People are buying less clothing because of the loss of jobs and closure of shops,” she said.
According to a survey conducted among 700 companies worldwide by the International Textile Manufacturers Federation, all regions of the world have suffered significant cancellations and or postponements of orders.
The survey indicates that companies expect their turnover to be significantly lower than in 2019.
Challenges
The cotton industry, according Ms Lubwama, has also been affected by climate change, noting that whereas this was a marketing period, rains in other parts of the country have affected production.
“Right now, we have entered the marketing season but in some areas, it’s still raining and this in a way affects the quality of the cotton,” She shared.
Ms Lubwama also noted that fluctuation in prices
continues to impact the industry. Currently,
a kilogramme of cotton at farm gate costs Shs1,500 down from Shs2,000.
Uganda average production capacity stands at 200,000 bales annually.
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