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Tanzanian cotton processors bogged by unsold stocks with slow trade

Cotton processors in Tanzania are facing a pile up of cotton yarn. China is the main market for Tanzania’s cotton yarn exports but cotton ginners are finding it difficult to sell their goods due to slowing demand. Trade war between the United States and China has cut down the volume of garments exported to the US and hence from Tanzania to China.

Cotton processing factories in Tanzania have cut down on the amount of cotton lint they buy from ginners and also the amount of yarns they export. That means they have tons of cotton yarns un-exported. Other challenges are transportation challenges due to the introduction of a new policy which needs cargo to be transported by truck with only specified documents.

Over 4,00,000 tons of cotton were harvested this season in Tanzania. But the trade war between the US and China has caused the crop’s price in the world market to drop. This is also being reflected in the domestic market, but the Bank of Tanzania has established a mechanism to mitigate the effects of price volatility. Ginners and other buyers are unable to buy cotton from farmers. Some companies are organising seminars for farmers.