Local cotton production revives after import ban
By Jeph Ajobaju, Chief Copy Editor
Cotton production and consumption rose 7.5 per cent to 1.6 million metric tonnes (mt) in 2020, a year after the Central Bank of Nigeria (CBN) restricted foreign exchange (forex) for textile products imports to increase local production.
However, Nigeria has not fully tapped into the world cotton market estimated at $38.45 billion last year, according to latest data.
Research and Markets, an international research report, projects that the global cotton market will hit $46.56 billion by 2027, with a compound annual growth rate (CAGR) of 2.74 per cent, per reporting by The Nation.
According to World Population Review, the 10 largest producers are India, China, United States, Pakistan, Brazil, Uzbekistan, Australia, Turkey, Argentina, and Greece.
Africa’s top producers
Modor Intelligence, a business intelligence firm in India, listed the top producers in Africa to include Benin, Mali, Burkina Faso, and Ivory Coast, all of which account for about 50 per cent of the continental output.
The African cotton market is estimated to register a CAGR of 3.5 per cent between 2020 and 2025. Nigeria’s current output is 1.1 per cent of world exports.
West Africa comprises 12 cotton-producing countries – Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Côte d’Ivoire, Ghana, Mali, Niger, Nigeria, Senegal, and Togo.
Mali and Burkina Faso are the largest producers, according to the Foreign Agricultural Service of United States Department of Agriculture (USDA).
Africa produces about 2.5 million mt of cotton seed, 5.8 per cent of global output.
Nigeria exported 3,108 mt of cotton seed worth $2.104 million in 2020, according to the International Trade Centre (ITC) data.
The export went to Ghana, United Arab Emirates, Japan, India, Vietnam, Chad, China, and Greece.
The Nation reports stakeholders as saying that farmers are unable to access government intervention, including N50 billion revival funds, N100 billion Cotton, Textile and Garment fund (CTG fund)
However, the Central Bank of Nigeria (CBN) is working to raise cotton production, with almost 130,000 cotton farmers having benefitted this year from its Anchor Borrowers Programme (ABP).
CBN Governor Godwin Emefiele has reiterated that the “CBN is on a journey to resuscitate the #CTG sector with a plan to increase cotton production, capacity of ginneries and textile companies in the country,’’
He said the CBN will work with associations that have repaid at least 70 per cent of their loans to cultivate 80,000 hectares of land with an average output of 120,000 mt at 1.5 mt per hectare.
Local production rebounds
The cotton market has witnessed a rebound almost two years after the CBN blocked traders from official access to forex for textile imports.
Cotton production and consumption rose 7.5 per cent in 2020 after the figures dipped the previous year.
When the CBN restricted forex for textile products imports in 2019 to revive local production, cotton output was 920,000 mt and consumption 805,000 mt.
In 2020, production surged to 1.6 million mt and consumption 989,000 mt.
The International Cotton Advisory Committee (ICAC) had disclosed in 2016 that Nigeria’s cotton production was 51,000 mt on 253,000 hectares, consumption 28,000 mt, and export 25,000 mt.
More than 3.5 million farmers in Africa depend on exports of raw cotton lint, according to the United Nations Centre for Trade and Development (UNCTAD).
