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Cotton shortage may jeopardize AGOA

17
Jan '11
Kenyan textile sector for long has been reaping the benefits from a major trade pact with the American Government, but now this seems to be under severe threat, as the cotton processors in Kenya are apprehending severe cotton shortage in the country.

While the official statistics portray a rise in the Kenya's overall cotton production over the past few years, the cotton ginners in the country are talking about the severe shortage of the commodity.

This situation is thus, raising serious apprehensions regarding the country's ability to draw gains from phase four of the African Growth and Opportunities Act (AGOA), which requires that the signatory nations should gain self reliance in terms of sourcing of raw materials by September 2012.

Textile constitutes around 50 percent of the Kenya's total exports to the US under the AGOA. Under the AGOA initiative, Kenya enjoys favourable tax treatment for exports of around 6,000 diverse products to the US markets. However, the country presently exports not more than 20 items.

The official figures by the US authorities reveal that, there has been a rise in Kenya's cotton production from 23,000 bales in 2009 to 49,000 bales in 2010, but then the local industry stakeholders have declared these figures as dubious, as they claim the data to be misrepresented.

Kenya on an average has 350,000 hectares of land which is apt for cotton cultivation which receives rain water, while cultivation is possible on another 35,000 hectares through irrigation. Thus, while combining the rain-fed area and the area under irrigation, the country bears a potential to produce around 300,000 metric tonnes of seed cotton during each season.

Fibre2fashion News Desk - India


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