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Cotton firms dispute regulator’s growth outlook
Cotton farm. Kenya’s annual domestic consumption is 180,000 bales. Photo/FILE
Textile firms have differed sharply with the cotton sector regulator over the outlook for the garment industry, saying they were increasingly turning to synthetic fibre following a biting lint shortage.
In its latest report, the United States’ Department of Agriculture (USDA) puts Kenya’s 2010 cotton production at 49,000 bales, more than twice the 23,000 bales it reports for 2009.
These figures imply the industry’s third best performance in the last 30 years — after the 62,000 bales recorded in 1979 and the 60,000 bales recorded in 1984.
“I had to switch to polyester. My spinning section, which is running on reserves bought from Uganda and Tanzania, is way below capacity,” said Thika Cloth Mills managing director Archna Bulsara.
At an annual domestic consumption of 180,000 tonnes, these figures would also imply reduced exposure to volatile international import prices.
“It is always possible to hear that the country is producing some cotton, but the truth is that none 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.
On Wednesday, the Cotton Development Authority (CODA) said it was still compiling its 2010 data on cotton production but maintained the USDA figures were realistic.
“I know that the final figure will not 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.
Local ginners share the positive outlook, even projecting a higher output for 2011.
Kenya Ginners Association chairman David Masika said 2010/11 is set to realise higher production as more acres come under irrigated cotton production.
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 enough 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 and Kenya Association of Manufacturers (KAM), faulted the USDA figures, saying they were part of larger disinformation campaigns by CODA.
The country, he said, could not have harvested more than 4,000 bales in 2010 without it being noticed by the local textile sector.
The textile industry has offered to pay a higher price 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 Bedi
Harrison Kinuthia, a general manager at Sunflag textile and Knitwear Mills and member of the taskforce that recommended the creation of CODA to replace defunct Cotton and Lint Marketing Board, said the authority’s governance structure was preventing it from serving its primary purpose.
“It is clear that very little can be achieved by the authority acting without the input of the private sector at its board level,” said Mr Kinuthia.
