As a World Trade Organization (WTO) meeting of trade ministers in Bali, Indonesia, concluded last week, it was agreed that developing countries could export cotton, quota free, to developed countries. Amelia Kyambadde, Ugandaâ€™s Trade Minister, at a media briefing on Thursday noted that during the highly charged talks, previous limitations placed on cotton imports were agreed to be lifted and that Uganda would be one of the beneficiaries.
As a World Trade Organization (WTO) meeting of trade ministers in Bali, Indonesia, concluded last week, it was agreed that developing countries could export cotton, quota free, to developed countries.
Amelia Kyambadde, Uganda’s Trade Minister, at a media briefing on Thursday noted that during the highly charged talks, previous limitations placed on cotton imports were agreed to be lifted and that Uganda would be one of the beneficiaries.
//Cue in: "You remember some...
Cue out: ...able to export.”//
In 2012, Uganda’s Cotton exports were valued at 76 million US dollars, a drop from 85.8 million dollars recorded in 2011, according statistics from Bank of Uganda (BOU). The drop was attributed to lower prices and production. At the talks in early December, it was agreed, albeit without specifics, that there be a level playing field for Least Developed Countries (LDCs) to competitively sell their cotton in the global market.
African countries find it hard to penetrate developed markets like the United States because of subsidies to local farmers that exist in those countries. This, according to many at the Bali summit, made Africa’s cotton none-competitive. Jina Mugerwa Nampeera, a Senior Commercial Officer at the Ministry Trade, explains that this is an opportunity for Uganda’s cotton to make it to developed markets.
// Cue in: “Cotton has been...
Cue out: ...without any limitation.”//
Uganda’s cotton is mostly exported in its raw form, with limited or no added value. Additionally, according to the Coffee Development Organization Uganda (CDO-U), the sector still faces production challenges, limited strengths of farmer groups, processing inadequacy and limited finance. Under the Africa Growth and Opportunity Act (AGOA), where Ugandan exports – mostly textiles – were allowed into the American market tariff and quota free, the cotton sector was bound to benefit the most. However, companies like Tri-Star Apparels collapsed, whereas others like Phenix Logistics continue to make losses. Nampeera further points out that the greatest challenge for Ugandan farmers is to improve the quality of cotton, if they are to meet the global standards.
//Cue in: “All we need...
Cue out:...us in Bali.”//
The challenges for Uganda’s cotton are however beyond only the matter of quality, but rather deeply rooted in the operations of some ginners and exporters in relation to the CDO, headed by Jolly Sabune. In July 2013, while appearing before the Parliamentary Committee on Statutory Authorities and State Enterprises (COSASE), Sabune was put to task to explain the low prices and limited productivity. There have also been allegations of mismanagement of funds under the Coffee Development Fund set up in 2010 by The Uganda Cotton Ginners and Exporters Association (UGCEA). The Fund was to boost production and investment, which is still lacking as Uganda struggles to tap opportunities across borders. Most cotton producing areas in Uganda are in Eastern region, stretching all the way upwards to the districts surrounding Lake Kyoga and parts of Northern Uganda.
Minister Kyambadde also announced that Uganda had taken over the lead negotiating role for the next two years to represent interests of the 49 LDCs in the World Trade Organization initiative.