Cotton exports have earned Uganda sh49b this year compared to sh34billion ($29 million) in 2006, due to increased production in eastern Uganda, the Cotton Development Organisation (CDO) has said. The region produced 135,000 bales of cotton, up from the 120,000 produced last year.
Jolly Sabune, the CDO managing director, disclosed that the production of organic cotton also increased to 13,000 bales, up from 3,500 last year. She called upon the government to impose a levy on palm oil to discourage imports and stimulate the local cotton seed oil market. "Oil millers pay little for the cotton seeds because they have an alternative of importing palm as a raw material at zero-rate tax. It is cheaper for the millers to purify palm oil than to use cotton seeds," Sabune explained.
Tanzania recently introduced a 10% levy on crude oil imports to boost the its cotton industry.
"While it is true that cotton seed production is too small to satisfy the market, the government should prevail over the oil millers to use the available component as an ingredient in the manufacturing of cooking oil," Sabune argued.
She said the cotton farm gate price would be stabilised at sh600 (US 36 cents) per kilogramme. "If the price is stabilised, the farmers will be able to produce 1,000,000 bales in a season, especially now that peace is returning to the north, where most of the districts grow cotton," she said.
Sabune said the north would be good for organic cotton growing since the land had not been used for more than two decades of a rebel insurgency.
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