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Mali’s Cotton Industry: Come Rain Or Come Shine

Mali’s Cotton Industry: Come Rain Or Come Shine

The head of Mali’s state-owned textile development company, CMDT, announced recently that Mali’s target cotton production is 800,000 tons by 2018. Last season, Mali produced a 552,000 tons.

“It is an ambitious target,” Victoria Crandall, soft commodities analyst at Ecobank, told AFKInsider. But whether a given year’s targets can be achieved, she says, “Largely depends on the rainfall that year… It’s not irrigated, so it depends on rain.”

This reflects a common issue in African agriculture. In the absence of irrigation, farmers are wholly subjected to the whims of the weather. And in the case of Mali’s relatively poor rural economy, that doesn’t just affect cotton exports.

For Mali, cotton is indelibly tied to food. 

“Something that’s really critical to understand about cotton production in Mali is that it’s very much a holistic production system that also guarantees food security,” says Crandall. “Malian farmers typically plant one-third of their acreage with cotton, and two-thirds with staple grains” like maize or millet.

Crandall explains that the cash generated by CMDT’s forward-sales of cotton is used for key inputs — such as fertilizers — that are applied to both cotton and food crops. “If you weren’t planting cotton, you wouldn’t have a way to guarantee the supply of fertilizers… That’s one reason why [cotton is] absolutely critical and strategic” to the Malian economy, she says.

As it stands, and especially considering the country’s weak development indicators, Mali’s cotton industry is rather well-organized and produces some of the world’s highest quality crops.

Crandall says, “If there’s an area where there’s needed investment it’s in storage,” which would help to ensure that quality is preserved in the event of bottlenecks in the system. “It’s not a huge problem… [but] it’s an area where things can be improved.”

Interestingly enough, Mali has already found that these kinds of small improvements can have outsize effects.

“Cotton will be discounted if it has a lot of contamination,” Crandall explains. Foreign particles like dead leaves and stems can impact the quality of follow-on cotton fibers and yarns. This reduces the price.

Several years ago, the region’s hand-picked cotton was considered to be of lower quality than machine-picked American and Australian crops. The reason, it turned out, was plastic. Crandall explains, “The highest source of contamination came from traces of plastic from plastic bags that they would use to harvest the seed cotton.” Farmers reused fertilizer bags for collection, and remnants of plastic would end up in the harvest.

The result was that production would get discounted by world markets. Once the problem was fixed, perceptions reversed and Malian cotton is now considered to be among the highest-quality in the world. 

Cotton in context

Considering its slight price premium and potential for helping to ensure food security, cotton is likely to be a lynchpin in Mali’s economy for some time. CMDT is very keen to expand acreage and meet those ambitious targets for the coming years.

However, no agriculture is without risk, and so it is for Mali’s cotton growers.

One of the industry’s key weaknesses — one shared by farmers throughout Africa — is its reliance on rainfall. Uncertain weather patterns could arguably wreak havoc on cotton harvests, not to mention their neighboring staple grains. Thus, while the interdependence of cotton and crops is a good thing from the perspective of encouraging food agriculture, it’s also a vulnerability in that farmers could lose both their income and their staple grains all at once.

Perhaps more industrialized (rather than smallholder) farming could address this, though of course that comes with its own political and economic issues. Ben Longman, managing director at market intelligence firm Trendtype, identifies commercialization as one of three key issues facing cotton in Mali. He told AFKInsider.com, however, that this solution “has far-reaching social implications for the rural economy and is politically very difficult.”

As one of two key commodities for the economy, along with gold, Mali’s cotton is also exposed to the volatility of world prices and cotton subsidies in nations like the U.S. Because Mali’s cotton is exported in a largely unprocessed state, there is even more exposure (unprocessed commodities are generally subject to more volatility than processed ones). As Longman puts it, “Down the line, the more the added value to those crops stays within the Malian economy, the better.”

Longman says, “Malians don’t add much value to the cotton itself, [which] creates more of an economic holding pattern than economic development… Down the line, the more the added value to those crops stays within the Malian economy, the better.”

Unfortunately, in the case of cotton at least, Crandall doesn’t see a great deal of value-added potential. Currently, Malian cotton undergoes “very basic processing, ginning the cotton and exporting cotton fiber and cotton lint.”

She says, “At this stage if there would be any investment in manufacturing and processing it would still be in ginning, and unfortunately not in textile manufacturing or in spinning.” Those industries are very concentrated in highly-competitive south-east Asia.

Finally, there is also the context of Mali as a whole.

The country is immense — roughly the size of California, Arizona, New Mexico, and Colorado combined — and sparsely populated. The more fertile south gives way to the Saharan north, which is still suffering the effects of what the BBC describes as an “inconclusive” military coup in 2012.

In those areas, food insecurity remains a pressing issue; as a result, over 9 percent of Mali’s population is classified as requiring “urgent food aid.”

The leftover instability continues to create uncertainty for the nation as a whole. However, taken together, Mali has recovered quickly from the crisis: after falling into a recession following the coup attempt, the economy bounced back in 2013 and is expected to enjoy continued expansion.

Part of this success can be attributed to improved crop yields, which of course were the result of adequate rain. How Mali’s cotton industry and economic situation develop, then, will not only depend on CMDT’s policies and interventions, but also, invariably, on the weather.