Cotton firms dispute regulator’s growth outlook

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foc1014_1[1]In its latest document, the United States’ Department of Agriculture (USDA) puts Kenya’s 2010 cotton production at 49,000 bales, over twice the 23,000 bales it reports for 2009.

Textile firms have differed sharply with the cotton sector regulator over the outlook for the garment industry, saying we were increasingly turning to synthetic fibre following a biting lint shortage.

“I had to switch to polyester. My spinning section, which is jogging on reserves bought from Uganda & Tanzania, is way below capacity,” said Thika Cloth Mills managing director Archna Bulsara.

These figures insinuate the industry’s third best performance in the last 30 years — after the 62,000 bales recorded in 1979 & the 60,000 bales recorded in 1984.

At an annual domestic consumption of 180,000 tonnes, these figures would also insinuate reduced exposure to volatile international import prices.

“It is always feasible to listen to that the country is producing some cotton, but the truth is that not one of the operating ginners can deliver it at short notice when you place an order,” Mr Mahendra Shah, a Nakuru-based investor who recently put his spinning section on sale due to perennial cotton shortage, told the Business Daily in an earlier interview.

“I know that the final figure won’t be the 58,000 bales that we had projected, but it will definitely fall above 40,000 bales,” said Mr Michael Powon, the CODA managing director.

On Wednesday, the Cotton Development Authority (CODA) said it was still compiling its 2010 information on cotton production but maintained the USDA figures were realistic.

Kenya Ginners Association chairman David Masika said 2010/11 is set to realise higher production as more acres come under irrigated cotton production.

Local ginners share the positive outlook, even projecting a higher output for 2011.

To the manufacturing industry, which is reeling from acute shortage of raw materials, the higher production projections are causing disquiet with players blaming the industry regulator for distorting market information.

“I am shocked by reports that Kenya has doubled its cotton yield at a time that 600 of my employees are yet to resume work because we cannot procure  cotton in the local market to keep them at work,” said Mr Jas Bedi, the managing director of Bedi Investments.

Mr Bedi, the chairman of Textile Manufacturers Association of Kenya & Kenya Association of Manufacturers (KAM), faulted the USDA figures, saying we were part of larger disinformation campaigns by CODA.

The country, he said, could not have harvested over 4,000 bales in 2010 without it being noticed by the local textile sector.

The textile industry has offered to pay a higher cost of Sh80 per kilogramme to match international prices instead of the Sh32 per kilogram that CODA fixed last year, but nobody has responded to this offer because we don’t have any cotton,” said Mr Bediflashad.

(Source: http://www.businessdailyafrica.com/Corporate%20News/Cotton%20firms%20dispute%20regulators%20growth%20outlook/-/539550/1084358/-/1212oh8z/-/)

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