Ethiopia is working to stabilise its cotton production

Ethiopia is working to stabilise its cotton production

Ethiopia's government has unveiled plans to create an organisation to help the country's cotton producers maximise a strong supply base for the country's booming textile sector.

The chief aim of the new agency - which will operate under the Ethiopian Textile Industry Development Institute (ETIDI) - is to improve cotton supplies by purchasing cotton from farmers during periods of surplus production, when prices are low, notes Kibrom Gebremedhin, ETIDI communications director.

"The government will buy it, hold it and sell it to local and foreign industry during times of surplus to avoid farmers becoming discouraged; farmers shouldn't be bankrupt by low demand", he explains.

Although Ethiopia's textile industry is attracting foreign investors due to its cheap labour and electricity, it also wants to stabilise its cotton production.

The country's cotton industry suffered the worst cotton shortages in 10 years this year (2014) after producers reduced production following a 2013 surplus. The new agency should prevent such swings, Gebremedhin believes.

Ethiopia currently only produces cotton on 6.9% of 3.2m hectares that has been earmarked by the government for cotton production.

Major foreign investment in the textile sector is set to make it the country's third largest industry, with 18 new factories and seven enlarged plants due to begin operations this year.