The Cotton Association of Zambia – CAZ has pointed at the limited local demand for cotton as a major hindrance to the growth and maturity of the cotton farming, processing and textile industry in Zambia. Speaking to the Zambian Business Times – ZBT, CAZ Extension and Training officer Gerald Kachali said that cotton produced in Zambia relies on over 90% of the production being exported.
This scenario were Zambian farmers and cotton ginneries rely on exports, the demand and profitability of the crop relies on export markets which can improve or drop, or subject to currency depreciation which can adversely affect the incomes were prices are pegged in foreign currency. But if we had local demand, we would be assured of certain Kwacha price and predictable local consumption demand.
Kachali told ZBT that “the trends in cotton at the international market which is currently selling at about K16 to K17 per Kilogram of processed cotton (lint) is negatively affecting the farmers. “it depends on the international market, once the price has dropped companies buy at a lower price from farmers and Ginneries which result in farmers shifting to other alternative crops like sorghum and soya beans,” he said.
Only about ten percent (10%) is processed and consumed locally and due to lack of textile industries which are the final producers of cloth, with just a few textiles like Mukuba textile on the Copperbelt and hand loom project which consume local production to finished cloth. This has resulted in about 90% being sold in the export market, with Switzerland, India and China being the major export destination countries, he said. Commodity traders such as NWK are among the companies that are facilitating the current local buying and exports out of Zambia.
He further narrated that about 2,500 to 3,000 tonnes of cotton is expected to be produced this year 2018 and all this production is processed locally from seed and lint. This is an initial value additional process but more value can be derived if local textile became active. He explained that during production cotton undergoes a process called ginning, which involves separation of the seed from the harvested cotton
The cotton industry in Zambia is among the country’s largest quasi-formal distribution network with some 300,000 smallholder farmers participating in various out grower schemes. With an average of 5.5 members per household, the industry supports over 1.6 million citizens. This makes it a key industry that deserves attention and nurturing from the government.
The Cotton downstream farming sector relies almost solely on input pre-financing schemes operated by out grower and/or ginning companies, who after pre-financing the farmers’ crop buy the seed cotton produced and deducts the value of the pre-financed inputs from the money payable for the seed cotton. To spearhead the interest of the local farmers and stakeholders, CAZ was established and launched in November 2005 to provide a platform for smallholder cotton farmers to have an input in the operations and future development of the cotton industry in Zambia. The upstream cotton industry in Zambia collapsed after the liberalization policies introduced which opened up the market to cheap imports that also allowed second hand clothing.
The current government has pronounced industrialization of the country as its key economic thrust but the awakening of the textile industry with relevant fiscal policies to support locally produced cotton production, competitive pricing and to rationalise the levels of imports for both new and used cloths into the country is yet to have some cohesive and well coordinated approach.
Zambia currently has a lucrative clothing market currently satisfied by mostly imports. From traditional wear such as the famous ‘Chitege’ prints to basic school uniforms for government schools, the market is satisfied with imported fabrics and is currently fragmented due to a gap created by lack of a coordinated fiscal and industrial policy framework. The historically iconic and erstwhile largest textile plant in Zambia , Mulungushi Textiles at Kabwe remains un-operational.