1. Cotton-rich Africa: A new Business Opportunity for Home Textiles in the Emerging Global Cotton Scenario Matthias Knappe Programme Manager Cotton, Textiles & Clothing International Trade Centre

2. Conclusions Opportunities for Using African Cotton by Indian Home Textile Manufacturers Opportunities to Develop the Cotton you Need Opportunities for Investment in Africa Opportunities for Trade with and Exports to Africa

3. Structure ITC Global World Cotton Scenario Cotton in Africa Cotton and Textile Opportunities with Africa

4. The International Trade Centre The trade development arm of both WTO and UNCTAD The development partner for small business export success The only international organisation that is 100% Aid for Trade Working in T&C since 40 years and in Cotton since 6 years

5. Million tons 2. Global Scenario: High Cotton Prices ($1.54) Can India expand? Africa Can! Production Consumption Source: ICAC

6. Major Producers (2008/09 Season) Source: ICAC

7. Production Trends by Country Source: ICAC

8. Why African Cotton when India is a net Exporter? Source: ICAC Million tons lint Mill Use Production

9. Cotton Sourcing Potential in Africa

10. East African Cotton has Similar Fibre Characteristics than Indian Cotton HAND-PICKED ROLLER GINNED (often using Indian roller gin technology) Opportunity Using African Cotton

11. FIBRE QUALITY - LENGTH INDIAN S-6 IS MOSTLY SOLD AS 1 1/8” AFRICAN COTTON IS USUALLY AS PER CONTRACT (1.1/8” +)  Malawi: 1.1/8 – 1.5/32  Tanzania: 1.3/32 - 1.1/8  Uganda: 28-30 mm  Mozambique:1.1/8  Zambia: 26-28 mm  Zimbabwe: 1.3/32 – 1.1/8 Length

12. FIBRE QUALITY – AVG.MICRONAIRE MICRONAIRE IS THE MOST IMPORTANT FACTOR FOR SPINNERS US UPLAND4.3 – 4.9 INDIA S-64.0 – 4.8 AFRICAN3.8 – 4.5 Uganda3.8 – 4.2 Malawi3.9 – 4.6 Tanzania3.5 – 4.9 AFRICAN COTTON MIC. IS VERY CONSISTENT. AFRICAN - LOW UNEVENNESS BETTER FABRIC FEEL MIC

13. FIBRE QUALITY – STRENGTH US UPLAND28+ GPT INDIA S-630+ GPT AFRICAN29+ GPT Uganda28-32 GPT Malawi29-31 GPT Tanzania28-29 GPT INDIAN COTTON HAS A MARGINAL ADVANTAGE OVER AFRICANCOTTON Strength AFRICAN

14. FIBRE QUALITY – TRASH% US UPLAND1.5 – 3.0 % INDIA S-62.0 – 3.5 % AFRICAN1.5 – 2.0 % TRASH% IN US UPLAND DEPENDS ON WEATHER CONDITIONS, METHOD OF PICKING AND GINNING CONDITIONS. AFRICAN - CONSISITENTLY LOW TRASH LEVEL LOWER WASTE IN PROCESS HIGHER YARN YIELD Trash% AFRICAN

15. FIBRE QUALITY – SHORT FIBER CONTENT ORIGINHVI - SFI AFIS - SFC(W) % US UPLAND 9 - 1110 - 14 INDIA S-6 9 - 119 - 12 AFRICAN 8 - 98 - 10 SFC AFRICAN

16. FIBRE QUALITY – NEPS/GRAM US UPLAND250 - 400 INDIA S-6100 - 130 AFRICANsimilar to Indian SIMILAR TO INDIAN COTTON BECAUSE IT IS HAND-PICKED AND ROLLER GINNED NEPS ARE CRITICAL IN YARN DYED AND PIECE DYED FABRICS Neps

17. FIBRE QUALITY – BARK LEVEL Grams / 480 LB Bale  US UPLAND60 – 150  INDIA S-6 0 – 10  AFRICAN 0 – 10 Bark AFRICAN

18. FIBRE QUALITY – CONTAMINATION LEVEL PCS/480LBMG/480LBMG/PC. US UPLAND 3 - 55010 INDIAN S-6 80 - 100500050 AFRICAN 15 - 2050025 US UPLAND - MACHINE PICK, SAW GIN, LOWEST CONTAMINATION INDIAN S-6 - MANUAL PICK, ROLLER GIN, 100 TIMES US UPLAND AFRICAN - MANUAL PICK, Roller GIN, 10 TIMES US UPLAND Contamination AFRICAN vs US Contamination AFRICAN vs India

19. High contamination-lowHigh contamination-low

20. RELATIVE CONTAMINATION STATUS Vietnam PERCEPTION

21. Other Trade Advantages: Complementary Season Delivered from June to September/October (Tanzania; Malawi; Mozambique, Zambia, Zimbabwe) Logistic costs: Africa is closer to South India than Maharashtra or Gujarat Container cost Africa – India (via Colombo) lower than Maharashtra/Gujarat to Coimbatore

22. Potential for Niche Market Cotton: Organic, Fair Trade Organic cotton is grown in all countries India is leader and can provide technical inputs to overcome challenges Low use of pesticides and chemicals in Africa But: sustainable market linkages needed from the beginning! Potential to combine with other CSR requirements: Fair Trade Cotton

23. Lint Production in Eastern and Southern Africa Ethiopia: 30,000 t p.a. – potential: 150,000 t Kenya: 32,000 t p.a. – potential: 70,000 t Malawi: 5,000 t p.a. – potential: 100,000 t Mozambique : 23,000 t p.a. – potential: 50,000 t Uganda : 32,000 t p.a. – potential: 150,000 t Zambia : 36,000 t p.a. – potential:75,000 t Zimbabwe: 100,000 t p.a. – potential: 200,000 t Tanzania 130,000 t p.a. – potential: 270,000 t

24. N. America = 0.37 S. America = 0.35 Asia = 0.46 West Africa = 0.29 Africa (Other) = 0.31 Australia = 0.19 World = 0.43 Low Cost of Cotton Production in Africa Direct Cost of Seedcotton/Kg (US$) Source: ICAC

25. Potential: Investment in Fibre Transformation – Spinning and Handloom Operations Production Consumption Exports

26. Investment Opportunities in T&C in Africa: Africa is the Next & Last Destination for the Industry Countries like Ethiopia, Kenya and Tanzania have established facilities to attract foreign investment. India is culturally very close to Africa and therefore a logical No. 1 partner for Africa. Africa’s duty-free access to the US market (AGOA) as well as to the EU (Everything But Arms provision and relaxed rules of origin requirements under the Economic Partnership Agreements) Supply of yarn and fabric to Africa to be transformed into made-ups and clothing that can then be exported duty-free from Africa to the US and Europe.

27. Conclusions Opportunities for Using African Cotton by Indian Home Textile Manufacturers Opportunities to Develop the Cotton you Need Opportunities for Investment in Africa Opportunities for Trade with and Exports to Africa

28. Thank you for your kind attention For more information please visit: www.cottonguide.org / www.icac.org