Can you please draw the larger picture of current global cotton market and its long term projections? How is Africa positioned on it?
The current global cotton market size is 26 million tons and Africa produces approx. 3 million tons approx. 12% of global market. Currently 90% of this cotton is being exported to the rest of the world but owing to market conditions a new divergent view of value addition is in the radar of thought. Hence going forward we envisage greater value addition of the lint in Africa as opposed to exportation. Further the land mass allows for increased cotton growing should the need arise. As we move towards greater competitiveness we envisage the freight costs becoming a deterrent to the exportation of cotton lint and thereby production at source will be the way forward.
How is African textile and clothing industry faring?
The industry has been struggling to stay competitive but with current market access i.e. duty free/quota free to the US under AGOA and the EU we have a comparative advantage. Also the new “trade for aid” sentiments for Africa is encouraging industry growth and to have a textile pipeline from spinning, weaving, knitting and apparel manufacturing targeting both the US and the EU.
Which all are the challenges being faced by the sector?
The greatest challenge is off course second hand clothing which crippled the existence of domestic textile industry and the surviving factories are primarily targeting exports. In exports the greatest challenge is competitiveness due to the costs of doing business which includes a strengthening of our local currencies against the USD (our currencies are NOT pegged to the dollar). Besides the costs we have NO support from government incentives and thereby creating an un-level playing field between us and our competing countries.
What trade Initiatives are taken and to be taken to foster the sector in regional and global market?
Trade initiatives are primarily undertaken by private sector with support of NGOs as our governments have NO budgets for such support. Simultaneously we are working to a BRAND AFRICA label.
How would you comment on the rising prices of cotton and its ramifications?
The rising prices of cotton are global and its effects are felt by all players in the world. Off course the impact may reduce global demand or create a shift to synthetics. There has always been a fine line relationship between cotton and polyester. However considering that polyester prices have also been rising we do NOT foresee any major shift in consumer preference until the mismatch is significant.
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.