Ethiopian textile industry final

ETHIOPIAN TEXTILE INDUSTRY
PRESENT STATUS AND
FURTURE GROWTH PROSPECTS

Prof. R. B. CHAVAN

Institute of Technology for Textile, Garment and Fashion Design
Bahir Dar University, Bahir Dar, Ethiopia

2010

ETHIOPIAN TEXTILE INDUSTRY
PRESENT STATUS AND
FURTURE GROWTH PROSPECTS

By
Prof. R B Chavan

Institute of Technology for Textile, Garment and Fashion Design
Bahir Dar University, Bahir Dar, Ethiopia
E-mail: rbchavan@hotmail.com

2010

PREFACE

Ethiopia has a long history of traditional cottage textile sub-sector. Traditionally yarn from
cotton fiber supplied by small hold cotton farmers is home spun using age old spinning drop
wheel. The yarn is then converted into fabric using handlooms. This traditional cottage industry
continues to grow even today making an important contribution to satisfying people’s
requirement for textiles and providing large scale employment to rural and urban households.
The introduction of modern integrated textile mills in Ethiopia is a recent phenomenon initiated
by Italians during the Second World War. Dire Dawa Textile Mill, was the first integrated textile
Mill established by foreign capital in 1939. This has marked the starting point of textile sub-
sector in Ethiopia. During 196o’s, 5 large-scale integrated textile enterprises were established
mainly by private capital. The socialist regime, which reigned from 1974 to 1991, nationalized
private textile and apparel firms and at the same time established 4 more integrated textile mills
to expand the sector in order to satisfy the domestic demand for regular textiles and substituting
imported products.
The dictator economy eventually took a toll on the sector. Because of neglect, lack of
competition, and outdated technology, the sector could not meet international market standards.
As a result, the cotton farming and textile and apparel sectors were producing well below
capacity. Since the overthrow of the Marxist dictatorship in 1991 the current Federal Democratic
government has been transforming the economy from one based on a centrally planned structure
to an economy based on free market principles. In 2002, the Ethiopian government has drafted
“The Sustainable Development and Poverty Reduction Program”, in which it identified
development and poverty reduction as the primary targets of the Government and “Agricultural
Development-led Industrialization” as its principal strategy. Hence there is major focus on the
development of the cotton/ textile/garment sub-sectors in Ethiopia.
Thus, Ethiopia has a short history of production of cotton, textiles and garments on industrial
scale. Therefore, task of writing the present book, probably the first of its kind in Ethiopia, was
both easy and difficult. It was easy because the events of developments were meager, at the same
time it was difficult due to non-availability of information in a systematic way. It must be
recorded here that following reports were found to be extremely useful and extensively used in
providing statistical data and strategic recommendations.

1. Benchmarking of the Ethiopian Textile Industry (UNIDO draft report) prepared for the
Textile and Apparel Industry Development Institute, Ministry of Trade and Industry,
Ethiopia, April, 2010
2. Market and Potential Analysis for the Textile, Garment and Home Textile Sector in
Ethiopia (Final report 2007) prepared by Corporate solution, Bad Nauheim, Germany on
behalf of Engineering Capacity Building Program, Germany.

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3. Fruits of the loom: Export potential of Ethiopian handmade, handloom and home
furnishing textiles: Report prepared by Eyob Demessre etal. Submitted to Integrated
Institution Export Development Program for Ethiopia, January 2005
4. Cotton – textile-Apparel value chain: Report for Ethiopia, Prepared by Agridev
Consultant. Submitted to Regional Agricultural Trade expansion Support Program,
Nairobi, Kenya, 2004
5. Study Report on The Development Strategy of Ethiopian Cotton/Textile/Garment Sub-
sectors (Draft) prepared by China Textile Planning Institute of Construction, Beijing,
China, 2003

Much information was also collected through extensive internet search.
The book provides the information both of academic interest regarding the development of
cotton, textile and garment sector and some valuable statistical data as well as the information of
commercial interest for those who are interested in entering into cotton, textile and garment
business in private or partnership mode. The book contains 10 chapters covering the cotton,
textile, garment and handloom sectors. Special chapters on cotton grading, export market entry,
quality standards and care labels, marketing, business opportunities and SWOT analysis. The
book covers the up to date information till October 2010, highlighting Ethiopian Governments
ambitious plans to reach the textile/garment export earning of USD 1 billion in next five years. A
proposal has also been drafted by the Ethiopian Textile Industry Development Institute (ETIDI)
to ban the export of Ethiopian cotton in order reap the benefits of producing value added
products. It is hoped that book will provide much of the scattered information on Ethiopian
cotton, textile and garment sub-sectors in the form of a single compilation and enthuse some of
the national as well as international enterprises to enter into these sub-sectors in a big way and
contribute in boosting the industrial development and economy of Ethiopia.

Bahir Dar, Ethiopia Prof. R B Chavan
November 2010 E-mail: rbchavan@hotmail.com

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ABOUT THE AUTHOR

Prof. R B Chavan was working as professor for 30 years at the Department of Textile
Technology, Indian Institute of Technology, Delhi, India. During this period he guided 11 Ph D
theses and published more than 150 research papers in international, national journals and
conference proceedings. He has also published 3 books on the subjects related to Chemical
processing of textiles, two books on quality assurance of Khadi a hand spun hand woven fabric
and edited a special issue of the Indian Journal Textile and Fiber research on “Environmental
issues: Technology options for textile industry”. He has also contributed a chapter on
“Environmentally friendly dyes and dyeing processes” to be published by Woodhead Publishing
Limited, Cambridge, England in book “Handbook of textile and industrial dyeing: Principles,
processes and types of dyes Vol I”. Editor: Dr Matthew Clark
He is the recipient of Perkin Centenary Award from the University of Manchester for valuable
contribution in the field of color chemistry and Colourage Gold medal for best research
publication on transfer printing of cotton and polyester/cotton blends. As a part of academic
career he visited several foreign universities like University of Manchester, England from where
he obtained his Ph D degree, university of Leeds, England, University of Natal, Brazil,
University of Dhaka, Bangladesh. He also visited other countries like Germany, France, Italy
Switzerland and USA.
After superannuation from the Indian Institute of Technology Delhi in 2006, he worked as
Consultant for 3 years at Mahatma Gandhi Institute of Rural Industrialization, Wardha,
Maharashtra, India. The assignment was a part of Rs. 120 million project sponsored by Khadi
and Village Industries Commission, Ministry of Micro, Small and Medium Enterprises, Govt. of
India. He was one of the members of core group of four experts responsible for setting up the
Institute. During the period of 3 years he provided a valuable technical interventions for the
development of Khadi (hand spun, hand woven fabric) by conducting more than 30 technology
dissemination workshops on all India basis. He also developed the technology of Solar operated
Charkha (Mini-spinning machine) and standardized the technology by conducting many field
trials. The technology has provided much needed technical intervention to reduce the drudgery of
manual operation of Charkha, improvement in quality and productivity of yarn and wage earning
capacity of spinners. Most importantly, the technology uses the renewable source of Solar energy
available abundantly both in rural and urban India and thus solves the problem of non-
availability of normal electricity in rural areas. As a result of extensive field trials the Khadi and
Village Industries Commission, India has accepted the technology for implementation in the
Khadi sector (Times of India, October 3, 2010 press release). This is one of the major
contributions of the author in the development of Khadi sector and application of science and
technology for social benefits.

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Since October 2009, the author is working as Professor at the Institute of Technology for
Textile, Garment and Fashion Design (IoTex) at Bahir Dar University, Bahir Dar, Ethiopia. He is
helping in developing the post graduate and Ph D Programs at the Institute. The author is
providing technical guidance for quality testing and quality control at Bahir Dar Textile S C,
Bahir Dar, and also prepared a detailed project proposal on “Quality standardization and grading
of Ethiopian cotton”. He also initiated two M sc research projects on “Utilization of student
cafeteria food waste for biogas generation” in collaboration with the Dept. of Applied Chemistry,
Bahir Dar University and initiated a Ph D project on “Documentation and application of Natural
dye yielding plants of Ethiopia”. The present book is a result of author’s endeavor towards
maintaining academic excellence at IoTex.

IV

CONTENTS

Preface
About the author

Chapter 1 Ethiopia: general information 1
1.1 History
1.2 People
1.3 Capital city
1.4 Main languages
1.5 Local time
1.6 Calendar
1.7 Government and political system
1.8 Economy

Chapter 2 Cotton production: Present status and future growth plans 7
2.1 Introduction
2.2 Planting period
2.3 Cotton production
2.4 Cotton species
2.5 Cotton quality
2.6 Grading and quality checking
2.7 Scientific research and education system of cotton
2.8 Marketing chain
2.9 Cotton production statistics
2.10 Potentials for the development of cotton sub-sector
2.11 Cotton production and marketing constrains
2.12 Recommendations for the development of cotton sub-sector
2.13 General development goals and strategy for implementation
2.14 Present status and government plans for future growth of cotton sector

V

2.15 Current and projected yarn production capacity of Ethiopian textile industry
2.16 Yarn production and foreign exchange earning plan of textile industry,
2009/10-2014/15
2.17 Projected production from new investment in spinning factories
2.18 Five year lint cotton demand of spinning industry
2.19 Existing capacity and future production potential of ginnery
2.20 Short and medium-term strategy to satisfy domestic and international
demand of cotton (2010/11-2014/15)
2.21 Financial requirement for the implementation of the strategy

Chapter 3 Need for development of grading system for Ethiopian cotton 63
3.1 Introduction
3.2 International importance of cotton grading
3.3 Need for development of cotton quality standard and grading system
3.4 Brief history of iotex
3.5 Objectives
3.6 What is cotton grading?
3.7 Essential quality parameters for cotton grading
3.8 Expected outcome of the project phase I
3.9 Benefits and beneficiaries
3.10 Impact of cotton fiber properties on yarn quality and pricing
3.11Effect of fiber quality on weaving performance
3.12 Cotton grading and its need
3.13 cotton grade standards
3.14 Manual grading
3.15 Development of instrument cotton grading
3.16 Quality and pricing mechanism
3.17nternational cotton marketing
3.18 Global status of HVI instrument
3.19 Advantages of HVI classification

VI

3.20 Implementation of instrument cotton classification systems
3.21 Sustenance of national HVI system
3.22 Technical details of cotton grading system
3.23 impact of cotton ginning on quality
3.24 Cotton grading systems of some countries

Chapter 4 Assessment of textile sub-sector 103
4.1 Introduction
4.2 Diversification of ownership
4.3 Distribution and marketing system of textile products
4.4 Education and training system
4.5 Potentials for developing the textile sub-sector
4.6 Challenges for the development of textile sub-sector
4.7 Measures to be taken for the development of textile sub-sector
4.8 Three phase development strategy
4.9 Strategy to achieve the targets
4.10 Present status of Ethiopian textile industry
4.11 Structure of the Ethiopian Textile Industry
4.12 Factors affecting the export competiveness of Ethiopian textile industry
4.13 Other issues affecting the competitiveness of Ethiopian textile industry
4.14 Foreign Direct investment in Textile and garment industry
4.15 Incentives for foreign direct investment
4.16 Preferential Market Access and other Incentive Programs
4.17 Foreign investments
4.18 Turkey Investment
4.19 Indian Investment
4.20 U.S. Firms Partner with Ethiopia’s Almeda Textiles
4.21 The Italian Intervention on Textile and Garment Sector
4.22 Ethiopian government may ban cotton exports
4.23 Apparel export earnings likely to rise to $1 billion

VII

Chapter 5 Assessment of garment sub-sector 166
5.1 Introduction
5.2 Manufacturing scale and equipment level
5.3 Development opportunities for the garment sub-sector
5.4 Ethiopia’s garment export picking up speed

5.5 Potentials for the development of garment sub-sector
5.6 Challenges for the development of the garment sub- sector
5.7 Strategy and measures for the development of the garment sub-sector
5.9 Present status of garment industry
5.10 Value chain assessment of garment sector
5.11 Trends in Garment sector and types of co-operation
5.12 Productivity and quality (Benchmarks)
5.13 Labor cost
5.14 Status of product development
5.15 Performance analysis (Case studies)
5.16 Textile and garment Exports
5.17 Institutional support
5.18 Government Support

Chapter 6 Handloom clusters and export potentials 210
of handloom sector
6.1 Introduction
6.2 Handloom establishments and handloom weavers in Ethiopia
6.3 Handloom clusters at Addis Ababa
6.4 Cluster institutions and their functioning
6.5 Handloom value chains
6.6 Generalized chain components for handloom marketing
6.7 Production technology
6.8 Problems during the production process
6.9 Quality management system
6.10 Handloom products

VIII

6.11 Product marketing and pricing
6.12 SWOT analysis of handloom sector
6.13 Strategic issues
6.14 Conclusions

Chapter 7 Quality standards, care labels and packaging 243
7.1 Introduction
7.2 Trade-related, health safety, social and environmental issues
7.3 Personal protective equipment
7.4 Quality control
7.5 Care labels
7.6 Care label symbols
7.7 Recommended labeling spots
7.8 Packaging
7.9 Marking

Chapter 8 Strategy for entry into export market 255
8.1 Pre-requisites for export marketing
8.2 Target groups
8.3 Target group segmentation
8.4 Purchasing behavior of target groups
8.5 Price segments
8.6 Export pricing
8.7 Cost calculations
8.8 Delivery time
8.9 Communication and product promotion
8.10 Situation in Ethiopia
8.11 Developing an export strategy
8.12 Important points to be considered by exporters
8.13 Tips for entering into export market
8.14 Basic preparations for export market entry

IX

Chapter 9 SWOT analysis and recommendations for the 282
development of textile, garment industry
9.1 Strengths
9.2 Weaknesses
9.3 Opportunities
9.4 Threats
9.5 Recommendations for development of textile, garment, home textile sector

Chapter 10 Business in Ethiopia: opportunities, 295
incentives and regulations
10.1 Investment opportunities
10.2 Economic liberalization
10.3 Why invest in Ethiopia
10.4 Investment opportunities in different areas
10.5 Regulations and incentives for starting a business in Ethiopia
10.6 Investment incentives

References 320

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CHAPTER 1
ETHIOPIA: GENERAL INFORMATION
1.1 History
The history of Ethiopia, known to many as Abyssinia, is rich, ancient, and still in part unknown.
Anthropologists believe that East Africa's Great Rift Valley is the site of the origin of
humankind. The first recorded account of the region dates back to almost 5,000 years ago during
the time of the Egyptian pharaohs, when the ancient Egyptians sent expeditions down the Red
Sea in quest of gold, ivory, incense, and slaves.
It is in the Afar region of Ethiopia where scientists discovered the remains of "Lucy" or
Dinkenesh, meaning "thou art wonderful," as she is known to the Ethiopians. "Lucy" lived more
than three million years ago, and her bones now rest in the Ethiopian National Museum at Addis
Ababa.
The country's rich history is woven with legends of King Solomon and Queen of Sheba; the Ark
of the Covenant that is said to rest in Axum. The story of King Lalibela, who is believed to
have had constructed eleven rock-hewn churches, still standing today and considered the eighth
wonder of the world.
Ethiopia is the only African country which was not colonized by European colonial forces
except, it was briefly occupied by the Italians between 1936 to1941.
In recent history, between 1889 and 1913 Emperor Menelik II reigned fending off the
encroachments of European powers. Italy posed the greatest threat, having begun to colonize part
of what would become its future colony of Eritrea in the mid 1880s. In 1896, Ethiopia defeated
Italy at The Battle of Adwa, which was considered the first victory of any African nation over a
European colonial power.
Menelik's successor, Haile Selassie I (reigned 1930-74) was left with the task of dealing Italy's
resurgent expansionism. In the early years of World War II, Ethiopia was liberated from the
Italians by the joint forces of the Resistance Movement and British army.
After being restored to power, Emperor Haile Selassie attempted to implement reforms and
modernize the state. However, increasing internal pressures, including conflict with Eritrea and
severe famine placed strains on Ethiopian society that contributed in a large part to the 1974
military rebellion that ended the Haile Selassie regime.

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The biggest impact of the coup was the emergence of Lieutenant Colonel Mengistu Haile
Mariam as head of state, and the reorientation of the government and national economy from
capitalism to Marxism. During the 17 years of the military control, the economy deeply
worsened, while civil unrest grew beyond the control of the military.
Growing civil unrest and a unified force of the Ethiopian people, led by the Ethiopian Peoples
Revolutionary democratic Front (EPRDF) against communist dictators finally led to the demise
of the Mengistu regime in 1991. Between 1991 and 1995 the Transitional Government of
Ethiopia, a coalition of 27 political and liberation organizations embarked on its path to
transform Ethiopia from a centralized, military-controlled country to a free and democratic
federation Government.
In 1994, a new constitution was written, setting up a legislative and a judicial system, and
guaranteeing equal rights and freedom of expression to all citizens of Ethiopia. In May 1995
people's representatives to the Parliament were elected.

1.2 People
With a population of about 85 million (2009 Estimate), Ethiopia represents a melting pot of
ancient Middle Eastern and African cultures evident in the religious, ethnic and language
composition of its Semitic, Cushitic, Omotic and Nilotic peoples. The Ethiopian population
comprises about 80 linguistic groups of which the Amhara and the Oromo constitute the
majority, with about 60 percent of the total population. Approximately 85 percent of the
population lives in the rural areas. The annual population growth rate is about 3.09 percent, and
the economically active segment, between ages 14 and 60, is about 50 percent of the total
population.

1.3 Capital city
Addis Ababa, the largest city, is the seat of the Federal Government of Ethiopia, and lies on the
central plateau at an altitude of 2,400 meters, 9 degree north of the equator. Its average
temperature is 16 degree Centigrade. Addis Ababa was founded in 1887, and has a population of
above 3 million. It is host to the African Union (AU), and the United Nations Economic
Commission for Africa (ECA). Several other international organizations have their headquarters
and branch offices in the capital, which is also the center of commerce and industry.

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Manufacturing plants for steel fabrication, wood, tanneries, textiles, cement, leather goods and
breweries are among the industrial activities located in and around Addis Ababa.
Ethiopia's other important cities of trade and industry are: Awassa, Dire Dawa, Gondar, Dessie,
Nazareth, Jimma, Harar, Bahir Dar, Mekele, Debere Markos and Nekemte. All these towns are
connected to Addis Ababa by asphalt and gravel roads, and most of them have good
infrastructural facilities, such as first class hotels and airports.

1.4 Main languages
Ethiopia is a country where as many as 80 languages are spoken. Amharic is the official
language of Ethiopia. The working languages of the national/regional government may differ
according to regions. English, French, Italian and Arabic are also widely spoken.

1.5 Local time
Ethiopia is three hours ahead of Greenwich Mean Time. The 12 hour clock is used locally and
this can be confusing to visitors. The first cycle starts with "one" at 7 A.M. and goes on to "12"
at 6 P.M. The second cycle starts at 7 P.M. "one" and goes on to 6 A.M. "12".

1.6 Calendar
Ethiopia follows the Julian calendar, which consists of twelve months of thirty days each and a
thirteenth month of five days (six days in a leap year). The calendar is about eight years behind
the Western (Gregorian) calendar. The New Year is Celebrated on September 11, which is 1
Meskerem E.C. (Ethiopian Calendar).

1.7 Government and political system
Ethiopia adopted a new constitution that established the Federal Democratic Republic of
Ethiopia (FDRE) in 1995.The federal government is responsible for national defense, foreign
relations and general policy of common interest and benefits. The federal states comprise of nine
autonomous states vested with power for self-determination. The FDRE is structured along the
lines of bicameral parliament, with the council of Peoples’ Representatives being the highest
authority of the federal government, while the federal council represents the common interests of

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the nations, nationalities and peoples of the states. Members of both councils are elected for a
five-year term.
The federal state is headed by a constitution president and the federal government by an
executive prime minister who is accountable to the council of peoples’ Representative. Each
autonomous state is headed by a state president elected by the state council. The judiciary is
constitutionally independent.
The Federal Democratic Republic is composed of states which are delimited (formed) on the
basis of settlement patterns, language, identity and consent of the peoples concerned.

1.8 Economy
In economic fields, agriculture is the mainstay of the country's economy. Currently, it
contributes 47 percent to the GDP; 60 percent to the export and employs about 80 percent of
labor force. Industrial manufacturing and service sectors constitute about 13 percent; 40 percent
of the GDP respectively.
The country is endowed with huge natural resources. Out of the total 113 million hectors land
areas, about 56 percent is suitable for cultivation. Nearly 15-16 percent of this is currently under
cultivation. Water is the most abundant resource. A dozen of large rivers, including Blue Nile,
lakes, underground water, seasonal rainfalls and comfortable weather conditions (average 10 -
200 Celsius) provide suitable ground for the cultivation of various crops.
Livestock is another major agricultural resource the country is known for. Ethiopia ranks first in
Africa in livestock population. All these resource bases made agriculture the mainstay of the
economy.
With the launching of the new economic policy and a series reform programs in 1992, the
participation of private sectors in the economy has steadily increased, and the economy is
liberalized and gradually turned to the trend of growth from its stagnant or negative trend under
the previous regime. The new economic policy and development strategy follows Agricultural
Development-Led Industrialization in which agriculture in its current potential in terms of land
and labor is seen as an ultimate resource basis to earn material and financial capacity for the
development of the industrial sector.
Other economic factors resources are

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• Minerals
• Gold
• Marble
• Limestone
• Tantalum (small amounts)
Other resources with potential for commercial development are
• Large potash deposits,
• Natural gas,
• Iron ore
• Petroleum (possibly) and
• Geothermal energy
Land
The government owns all land and provides long-term leases to the tenants. This system keeps
on hampering growth in the industrial sector as entrepreneurs are unable to use land as collateral
for loans.
GDP composition by sector:
• Agriculture: 46.7%
• Industry: 12.9%
• Services: 40.4% (2006 estimate)
Population
• Population 85 million (2009 estimate)
• Population below poverty line: 38.7% (2005-2006)
Labor force
• Labor force: 37.9 million (2007)
• Agriculture and animal husbandry 85%,
• Government and services 10%,
• Industry and construction 5% (2005)
• Unemployment: (% of labor force) 16.7% Age group 10 years and over. Urban areas
(2006 estimate).

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Agriculture
• Main products: cereals, pulses, coffee, oilseed, cotton, sugarcane, potatoes, qat, cut
flowers, hides, cattle, sheep, goats, fish
Industries
• Food processing
• Beverages
• Textiles
• Chemicals,
• Metals processing,
• Cement
Exports, imports
• Exports: $1.085 billion f.o.b. (2006 est.)
• Exports commodities: coffee, qat, gold, leather products, live animals, oilseeds, textiles
• Exports partners: China 10.5%, Germany 8.7%, Japan 7.4%, US 6.8%, Saudi Arabia
5.8%, Djibouti 5.8%, Switzerland 5.1%, Italy 5% (2006 est.)
• Imports: $4.105 billion f.o.b. (2006 est.)
• Imports commodities: food and live animals, petroleum and petroleum products,
chemicals, machinery, motor vehicles, cereals, textiles
• Imports partners: Saudi Arabia 18.1%, China 11.4%, India 8.1%, Italy 5.1% (2006)

Foreign exchange reserve and gold $1.108 billion (2006 est.)
Debt - external: $6.038 billion (2006 est.)
Economic aid - recipient: $1.6 billion (Financial year 2005-06)
Currency: birr (ETB)

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CHAPTER 2
COTTON PRODUCTION: PRESENT STATUS AND FUTURE GROWTH PLANS

2.1 Introduction
Cotton is one of the oldest cultivated fiber crops in Ethiopia. Ethiopia has favorable weather and
topography for the cultivation of cotton. A study of the Ministry of Agriculture indicates that
there is 3,000,810 ha (approximately 3 million ha) of land suitable for cotton production, which
is equivalent to that of Pakistan, the fourth largest producer of cotton in the world. Pakistan
harvests about 2-2.5 million MT of cotton annually from a total cotton farm area of 2.9 million
ha.
The low to medium altitude areas of the country are generally known to have an immense
potential for the production of cotton subject to the availability of water. In terms of productivity,
high yields are obtained in areas with an altitude ranging up to 1000 meters above sea level. In
the absence of hail, frost, and other unfavorable weather conditions, cotton production can also
be extended into areas with altitude of 1500 meters above sea level. Out of the total 3 million ha
of land suitable for cotton production, 1.9 million ha or 63.3% is found in 38 high potential
cotton producing areas and the remaining 1.1 million ha or 36.7% is in 79 medium potential
districts. Ethiopia currently (2008/09) produces only about 47,694.4 ton of lint cotton annually
from a total cotton area of 75,375 ha land which is only 2.51% of the total area favorable for
cotton cultivation.
Selected regions and respective land area suitable for cotton cultivation is shown in Table 2.1

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Table 2.1 Selected regions and respective land area suitable for cotton cultivation
No. Region Number of Area of land Suitable
selected for cotton cultivation,
Woredas ha
1 High Potential Areas
1.1 Tigray 3 208,825.20
1.2 Amhara 5 544,031.80
1.3 Sothern region 6 385,397.40
1.4 Oromia 6 205,491.20
1.5 Gambella 3 262,850.20
1.6 Benshangul Gumuz 3 79,931.8o
1.7 Afar 9 100000
1.8 Somali 3 100000
Sub-total 38 1,886,527.60
2 Medium Potential Areas
2.1 Tigray 6 60,303.60
2.2 Amhara 14 134,679.20
2.3 Sothern region 17 215,531.95
2.4 Oromia 12 201,930.05
2.5 Gambella 4 53,600.90
2.6 Benshangul Gumuz 16 223,235.45
2.7 Afar 5 100000
2.8 Somali 5 125000
Sub-total 79 1,114,281.15
Total 117 3,000,808.75
Source: Cotton Cultivation and Marketing Plan, Ministry of Agriculture and Rural Development,
2010.

As most of the lowlands are deficient in rainfall, the cultivation of cotton depends entirely on
irrigation. Cotton growing on the irrigable lowlands is, therefore, a large scale commercial
enterprise undertaken by government organizations, primarily by the Ministry of State Farm
Development, and to a certain extent by the Relief and Rehabilitation Commission. There are
five state owned enterprises producing cotton in the country. These are Tendaho, Middle Awash,
Upper Awash, North Omo and Abobo. Large-scale cotton cultivation is carried out mainly in the
Awash valley and in three minor areas, namely North Omo (southern Regions), Ababo
(Gambella Region) and Gode (Ogaden Region). Cotton is produced with the help of irrigation in
all regions except Ababo.

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Peasant cotton growing areas are rain fed and generally situated at altitudes ranging from about
1,000 meters to 1,700 meters above sea level. Rain-fed cotton is also grown under peasant
holdings in the Regions of Gonder (Humera), Sidamo (Bilate) and Gamo Gofa (Arba Minch)
where the annual rainfall is more than 700 mm. Peasant production is characterized by
traditional technology with no access to improved seeds and chemicals. Almost all the cotton
produced by the peasant sector is used by the handloom industry. Spinning cotton into home-
made yarn for making traditional fabrics by handloom weavers is an important historical
tradition.

2.2 Planting period
The planting period for cotton in Ethiopia considerably varies from area to area. In the lower
Awash valley, cotton planting starts in late June and ends in mid August. In the Middle Awash
and rift valley areas, cotton planting commences sometime in early May and ends early June.
Planting is carried out during late April-early May in Upper Awash. In Humera, Metema and
Gambella areas planting is done in June-August. Harvesting also shows similar variations. In
Lower Awash cotton harvesting begins early November and ends mid January. In Middle Awash
the harvesting period is November to late December. In Humera, Metema and Gambella,
harvesting takes place starting Mid November to end January. The planting and harvesting
periods of cotton in the major cotton producing areas is shown in Table 2.2

Table 2.2 Planting and harvesting periods in different regions
Area Planting period Harvesting period
Lower Awash June to August November to January
Middle Awash and Rift valley April to June November to December
Upper Awash April to May September to November
Hummera Mettema and Gambella June to August November to January
Source: Cotton – textile-Apparel value chain Report for Ethiopia, Prepared by Agridev
Consultant Regional Agricultural Trade expansion Support Program, Nairobi,
Kenya, 2004

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2.3 Cotton production
The industrialization of the Ethiopian textile sub-sector started in 1930s, when the country’s
cotton planting remained in a stage of traditional growing pattern by household farmers. Before
1960, most cotton textile products made in Ethiopia depended on raw material imported, and
cotton import alone occupied roughly 30% of the total import value. As a result of the increased
demand on cotton from textile sub-sector, in 1960’s the Government initiated the large scale
planting of cotton and made favorable land policies to meet the raw material needs of the
domestic textile sub-sector.
Tendaho Agricultural Development Enterprise was the first foreign-invested commercial cotton
farm. Later, local investors, including local governments, started to invest in establishing farms
specializing in cotton planting. With new cotton varieties, cotton growing area enlarged,
irrigation projects constructed, machineries and chemical fertilizer employed in the planting,
the Ethiopian cotton sub-sector was on the road to mass production. Since 1990s, along with the
transition to the market economy, a group of private farms have come into being, thus forming
the cotton production system in which small farm households, public farms and private farms co-
exist.
The technology employed in cotton production also varies from producer to producer. The state
owned and private farms use improved agricultural practices and technologies. The small holder
farmers although participate in large numbers in cotton production, practices traditional and
backward farming. Ethiopia grows relatively good raw cotton with fiber length of 26-28 mm.
There is potential to produce long staple length cotton in the country with improved seed and
technology utilization.

2.4 Cotton species
Cotton is not indigenous to Ethiopia. Major cotton species are Gossypium hirsutum L including
Carolina Queen, Deltapint 90, Stonenlle 1324, Cu-okri, Acalasi (S.J-2), Cucuroval 51 S, Bulk
2020 (crossbreed), Arha, Reba B-50 and Albar, (Coming from the USA, Israel, Turkey, former
Soviet Union and western African countries). All had high productivity when they were just
introduced.
The output and quality index of the major cotton species when introduced are given in Table 2.3

10

Table 2.3 The output and quality index of the major cotton species when introduced
Species Seed Seed Quality
Name cotton cotton index
Yield Yield only
with Rainfed
Irriga Kg/ha
-tion
Kg/ha
Length Strength Fineness Evenness Maturity
mm lb/in mv % %
Acalasi SJ-2 3250 -- 28.6 39.4 3.2 47.1 77.5
Deltapin t-90 3850 -- 27.7 38.3 3.7 47.7 78.7
Stonell e-1234 3854 -- 27.9 36.1 3.6 47.8 78.0
Carolina Queen 4960 -- 27.2 38.5 3.8 46.5 82.8
Cu-Okra 4950 -- 26.1 39.4 4.0 46.6 83.8
Cucurov A1518 5280 -- 27.0 37.0 3.8 46.6 82.1
Bulk 2020 2242 28.1 38.7 3.5 47.0 75.1
Arba 2030 30.3 40.0 3.5 47.1 77.0
Reba B-50 1804 26.3 36.4 3.2 48.4 70.9
Albar 1672 27.3 40.2 3.5 48.5 73.8
Source: Study Report on The Development Strategy of Ethiopian Cotton/Textile/Garment
Sub-sectors: China Textile Planning Institute of Construction, Beijing, China, June
2003

2.5 Cotton quality
There are no systematic records on quality of cotton produced in Ethiopia. In 2002/03, a Chinese
team from China Textile Planning Institute of Construction Beijing, Collected the cotton samples
from few state farms and textile mills and analyzed the cotton samples for different quality
parameters at the Cotton Quality Supervision and Test Centre of the Ministry of Agriculture of
China. The test findings are given in the Table 2.4

11

Table 2.4 Indexes of fibre quality of cotton samples

Length Specific Elong- Spinning
Sampling place Length Evenness, Strength, ation, Micro- Refle- Yello- evenness
mm % (cN/Tex) % naire ctance, wing
%
Tendaho Awash Ag.
SC 28.6 84.5 27.9 7.2 3.5 76.4 9.5 144
Upper Awash Ag.Ind. 28.3 82.9 27.2 7.3 3.9 72.9 7.3 127
Middle Awash Ag.
SC 26.5 85.3 31.9 7.0 4.6 75.0 8.1 144
Bahir Dar Cotton mill 26.2 80.5 26.4 6.0 3.5 77.5 10.5 117
Awasa Textile 27.7 80.9 28.5 6.8 4.4 73.9 9.2 117
Akaki Textile S C 25.8 81.2 26.9 6.3 3.9 72.2 11.7 118
Kambolcha Mill 28.8 84.3 30.9 7.7 3.9 70.3 10.3 145
Sub-sectors: China Textile Planning Institute of Construction, Beijing, China, June
2003

The comparison of cotton quality parameters between Ethiopian cotton and one of the Indian
cotton varieties (J-34) is given in Table 2.5.
Table 2.5 Comparison of Characteristics of Ethiopian Cotton

Property Ethiopian cotton J-34 Indian
cotton

Staple length 25 - 31 mm 28.5 mm

Micronaire 3.1 - 4.4 4.5

Strength 22 - 25 g/tex 28.5 g/tex

Trash content (%) 3 - 6% 4.5%

Uniformity ratio 48 - 50% 83 ( HVI)
Source: Benchmarking of the Ethiopian Textile Industry, UNIDO Draft report 2010

According to the above test reports, Ethiopian cotton is characterized by the positive points of
good fiber maturity, length and evenness, no or little contamination of “three threads” a term
referring to foreign fibers (hair, synthetic fiber and other colored fiber thread). The negative
points are rather low strength, high yellowing degree in color, sugary fiber (Stickiness), and the
indexes of length, fineness and strength not matching one another. The trash content is on the

12

higher side (6%) as compared to an equivalent variety of Indian origin cotton J-34 used in
spinning coarse yarn counts. Ethiopian cotton is suitable for spinning coarse and medium
yarn counts (Ne 20-40’s). Cotton grown in Middle Awash region is medium staple (28-30
mm) while that in Hawot region is short staple (25-27 mm).

2.6 Grading and quality checking
There is no well established system for grading and quality checking of cotton. In principle,
Ethiopia adopts American grading standards for cotton produced in the country. Cotton quality
check includes field quality grading, storing the samples of seed cotton according to their patch
field number, species, and time of harvest. 10 samples of un-ginned cotton from each batch are
taken for testing.
Fiber tests are conducted through the combination of apparatuses and visual observations and
feel. The test of length is made by hand pulling, while that of color, strength and fineness by
Spinlab and Micronnair Instruments.
Specie name, packing number, color, length, strength and grade are recorded on each bale of the
cotton.
The cotton ginning factories are not equipped with adequate quality test laboratories. Constant
humidity and temperature are not maintained, making many test errors and rare reproducibility of
test results.

2.7 Scientific research and education system of cotton
The National Agricultural Research Institution (NARI) is located in Addis Ababa, with its
agricultural technology stations in middle and lower Awash. The responsibilities of NARI and
technology stations include dissemination and training of research findings related to agriculture,
forestry, fruit and pasturage. At the same time, the stations are responsible for collection and
introduction of new plant resources, cotton seed breeding, cultivation, fertilization, irrigation,
drought fighting, preventing or solving the problems of disease, pest, or weed, and the research
work on planting systems.
The federal and regional governments have established higher institutions of agricultural
education. The three main agricultural universities are Alemaya Agricultural University, Ambo
Agricultural College and Jimma Agricultural College. Unfortunately, these agricultural

13

institutions are not well equipped with scientific manpower and test equipment for quality and
technical inputs in cotton post-harvesting technologies.

2.8 Marketing chain
Cotton is grown as a cash crop and passes through different channels before it reaches the end
users as finished products. The marketing chain of cotton and its derivatives is shown in Figure
2.1.
Figure 2.1 Overview of cotton marketing chain

Source: Abdella, Merima, and Gezahegn Ayele, Agri-chain analysis of Cotton Sub-sector in
Ethiopia. Ethiopian Development Research Institute, Ethiopia 2008.

14

Producers
State farms, private commercial farms and small holders produce cotton. Prior to 1992, large
scale cotton farming had been the exclusive domain of state enterprises. After the reforms of
1992, private commercial farms have also been engaged in cotton production. Currently there are
six major private commercial farms engaged in cotton production; namely, Lower Awash,
Middle Awash, Birale, Humera, Metema and Wollega farms. As regards the smallholder sector,
its annual production is not much known. The traditional cottage industries including handlooms
and handicrafts were fully dependent on cotton supplied by smallholders.
There are five state-owned farms, which account for 30-31% of the total cultivated area. These
state farms are Tendaho, Middle Awash, Upper Awash, North Omo, and Abobo. The private
commercial farms accounted for the major share of 43% of the total area cultivated, while the
smallholder peasants represent 27% during 1996/97-2000/01. In terms of annual production,
private commercial farms offer the dominant share of 56% of total production, followed by the
state farm enterprises (32%) and the smallholder peasant (12%).
Cotton productivity
In spite of the low share that publicly owned farms have in total area cultivated and annual
production level, they perform relatively better in terms of productivity by using better farming
system than the privately owned and the small peasant farms. The average annual productivity
for the state owned enterprises ranges from 20 to 30 q/ha on irrigated farms and 15 to 20 q/ha
under rain fed agriculture. Privately owned farms that use irrigation systems also have a better
productivity level than the small peasants, who predominantly rely on traditional and backward
farming practices. The productivity data is given in Table 2.6

Table 2.6 Productivity of cotton by various producers
Type of producer Productivity (q/ha)
Rain fed Irrigated
Small holders 5-10 -
Private farms 15-20 20-30
State farms 15-20 20-30
Research institutes 35-45
Source: Werer Research Center (cited in Agri-chain analysis of Cotton Sub-sector
in Ethiopia, 2008).

15

The different farming techniques together with various inputs utilized and the overall
management system in the production process would imply for the disparity in the productivity
and quality of cotton produced by the various farms. The case studies undertaken for the three
categories of producers in Afar and Arbaminch reveal this fact very well.
Major problems faced by the farms
State farms
Lack of improved seeds
The two major seed types that have been used on the farm are Akala SJ2 and Delta Pine-90,
which were released from Werer Research Center. Akala SJ2 was released in 1987 with an
expected yield of 32.5 q/ha. Delta pine-90 was released during 1990 with a better-expected yield
of 38.5 quintals per ha. The farms used to buy these seeds from the research center, but now it
has been long since it starts preparing its own seeds, and even sells to other farms. The yield
capacity of these seed types is decreasing as the seeds lose their genetic potential from time to
time.
There was an attempt to introduce another seed called Gedera that was imported from Israel in
2005. Because adaptation trial was not made prior to its cultivation, the seed variety resulted in
huge loss for the farm. Lack of improved seed variety has constrained the farm’s capacity from
reaching the desired yield and quality levels. Although there are many reasons for this problem,
the fact that the farm does not get enough technical and/or advisory support from various
institutions, particularly from agricultural research centers is the major one.
Irrigation water shortage
Water shortage for irrigation arises from various reasons. Limited capacity of the cannel that was
built some 30 years ago is the major one. The cannel was originally built to irrigate limited areas
of land, but as the total area under cultivation both by the enterprise and by other farms in the
nearby area increases, the capacity of the cannel to reach the entire land has been declining from
time to time. The other reason is related with the prolonged cannel maintenance time taken by
the Awash Water Authority. Because the authority does not finish the maintenance according to
schedule, water will not be released to the farms during the appropriate irrigation time. During
times of heavy flooding from the Awash River, the cannel will also be closed completely as it
will be filled with soil sediment, creating water shortage for irrigation.

16

To solve the water shortage problem, the authority once tried to open another way-out for the
cannel, but it did not succeed, as there were major problems in its design.
Labor shortage
Shortage of labor particularly during harvesting time is becoming a major problem to the farm.
The vast majority of pickers are brought from the Southern part of the county, and labor sourcing
was not a problem for a long time until recently. The low wage paid to pickers (25cents per kg)
compared to the surrounding private farms is one of the reason for shortage of labor which
results in labor shifting away from the state farm towards other farms who offer a relatively
better price. Apart from the disincentive created by low wage rate, alternative job opportunities
created in areas where the laborers came from is the major reason that created labor shortage not
only to the enterprise, but also to other cotton farms in the area.
Shortage of labor has a lot of implication on the farming operation. Delayed cotton picking
results in loss of cotton quality as the plant has to stay on the ground beyond the intended time
losing its moisture content and exposed to dust and other dirt materials. Delayed picking will
also expose the cotton plant to be fed by cattle, camels, and goats. Due to increased problems
faced by shortage of labor, the farms are planning to move towards mechanized harvesting
although it is costly and results in lower quality of cotton compared to hand picking.
Pest
The common pest types that affect the fiber yield and quality are the African Bollworm (ABW),
aphids, jassids and white fly. Particularly the ABW has a significant effect on yield and quality
of lint, causing an average cotton yield loss of 48% or 720 kg/ha The most widely used method
for controlling pest by the farm is the application of insecticides using aircraft spraying which
cost approximately 990 birr per ha. One problem associated with insecticide usage is the
resistance development by the insects that subsequently fails to control the pest. The other
problem arises due to the delayed availability of insecticides, as they are usually imported
through various agents of chemicals in the country. Health hazards associated with the use of
chemicals that have high level of toxicity is also a major problem. The most frequently used
chemical on the farm is thiodon, which contains a dangerous chemical called endosulfan with
high level of toxicity. Although there are no records of injuries or death caused by this chemical
in Ethiopia, there has been a record of dozens of death in cotton farms associated with the use of
this chemical, such as in India, Malaysia, and Sudan.

17

Problems faced by Private farms
Almost all of the problems associated with the farming activities of the state farm like lack of
improved seeds, shortage of irrigation water, shortage of labor and pest are also faced by the
private commercial farm.
Major problems faced by smallholders
Apart from the common problems that arise due to the lack of improved seeds, shortage of
irrigation water, labor shortage and pest, smallholder farms also face the following problems.
Lack of finance:
There are no credit associations to provide peasants with the necessary finance for farming
activities. This has limited the small holders’ chance of looking for alternative input price offers
in other markets, forcing them to rely on prices provides by big private commercial farms. This
has also forced the small holders to sell the raw cotton without it being processed/ginned, which
fetches much lower price.
Lack of market information
Information regarding the existing domestic and/or international market is almost non-existent
with the small holders. This has made them to become price takers, with no-negotiation power
for the selling price of cotton.
Problems related with land ownership
In case small hold farming, most of the peasants come from other parts of the region and pay a
certain amount of their net profit to tribe members who own the land. The tribes have full power
to discontinue the farmer upon failure of paying the specified amount, or if they obtain a better
offer from another farmer who wish to expand his land. This uncertainty over land has been a
major disincentive to smallholder farmers to invest their time, power, and money fully.
In and around Arbaminch, the situation is a bit worse. In spite of the long existing tradition of
cotton farming, in this area that was once called the Cotton Belt in Ethiopia, the area is losing its
originality due to obstacles faced by the farms starting from the very small land holdings they
got. The average land holding of a household in that area is estimated to be one fourth of a
hectare which they use it for not only the production of cotton but also other cash crops like
Banana and food crops like cassava, tef, sweet potato, and others. Because cotton harvesting
requires a lot of investment and intensive care throughout its cultivation period, there is a trend
to shift from cotton to other less time and money consuming cash crops.

18

The small holders are aware of the fact that successful cultivation of cotton would result in
higher yield and return at the end of the day than other cash crops cultivated in that area, but
because of lack of finance and technical assistance provided to them, they prefer to cultivate
other crops with lower but less riskier returns like banana. One other factor for the small holders
to abandon cotton farming has to do with lack of market access for their produce. They lack
information regarding where to sell and at what price. Often the local collectors would go around
the house of every farmer and collect cotton at a very low price. The capacity of the local
collectors to absorb the total cotton produced in the area is also limited resulting in large amount
of cotton to be wasted without even reaching the local market. This shows that markets are
highly disintegrated leaving little room for incentive to farmers.
Smallholder farms in Humbo Wereda, which is found around Arbaminch, have started to form
trade unions that would collect the final cotton harvest and take it to the market. It is a good
move to establish such unions to alleviate the market problem of farmers. Nevertheless, apart
from that, huge technical assistance in terms of improving the productivity and yield of cotton
together with forming a strong linkage with the domestic and international market is yet to be
focused and developed.
Local Assemblers
As can be seen from the Figure 2.1, rural assemblers play an important role in collecting seed
cotton from smallholders. These assemblers are mostly independent operators at primary markets
who assemble and transport the raw cotton using pack animals and small trucks for sale to
private ginners. They handle about 20% of the cotton production by smallholders.
Ginneries
In 2003 there were 11 ginneries, 4 state owned and 7 private with an estimated annual ginning
capacity of 200,000 MT of raw cotton.

19

Table 2.7 Distribution, number, and operation of private and state-owned ginneries
Private
Location No. of Operation
Ginneries
Addis Ababa 04 Offer ginnery service to private commercial farms and lint
cotton exporters in Awash valley and other cotton producing
regions
Gonder 02 Provide service to private commercial farms and cotton traders
operating at Metema and its surroundings.
Humera 01 Owned by a cotton producing share company.
State owned
Middle Awash 01 Provide service to state owned farms and small holders around
state enterprise the area
Tendaho State 01 Provide service to state owned farms
Enterprise
South Omo State 01 Provide service to state owned farms South Omo State
Enterprise
South Omo State 01 Provide service to state owned farms South Omo State
Enterprises
Abobo State 01 Provide service to state owned farms South Omo State
Enterprises

Source: Abdella, Merima, and Gezahegn Ayele. 2008. Agri-chain analysis of Cotton Sub-sector
in Ethiopia. Ethiopian Development Research Institute, Ethiopia.

All the ginneries are operating under capacity due to the low production of cotton in the country.
While all the cotton produced by state farms and private commercial farms go to the ginneries,
only 20% of the smallholder production is ginned. This is mainly because handlooms are the
main buyers of raw cotton directly from smallholder peasant farms.
Most of the lint cotton processed by public and private ginneries is sold to domestic textile mills
for further processing and production of textile fibers. Textile mills receive 80% of the cotton lint
provided by ginneries, where only 20% goes to the export market that is very low compared to
eastern and southern Africa average.
Delayed ginning operation due to prolonged time taken to source spare parts from abroad to
maintain the ginning machines is one of the problems that the factory faces. Electricity
interruption is also a major problem, which results in almost 20% of the idle time. Shortage of
qualified laborers and laboratory equipments that are essential for the grading procedure are also
creating difficulty in the ginning process.

20

Limited information regarding the international market is a major marketing problem.
Textile sector
Domestically produced raw and lint cotton are the major raw materials consumed by textile
factories, although other synthetic fibers and acrylic yarn are used to a limited extent. Almost
80% of lint cotton produced locally is absorbed by the textile mills for further processing to
produce fabrics both for the domestic and for the export market. The domestically produced
cotton is sufficient in fully satisfying the demands of the textile mills, making import of either
raw and/or lint cotton negligible.
The large cotton mills that consume local lint cotton as primary inputs for manufacturing textile
fibers are mostly state-owned or those leased by the private sector from the government on fixed
contractual agreements. The major textile factories are:
integrated mills (Akaki, Hawassa, Kombolcha, Bahir Dar, Dire Dawa, Almeda and Ethio-Japan
Nylon Textile factory;
Spinning mills (Adie Ababa and Edget Yarn Factory);
Spinning and weaving (Arbaminch Textile Factory);
Integrated Blanket Factory (Debre Berhan Blanket Factory).
Most of the textile factories in the country are largely underperforming unable to maximize the
benefits of procuring raw material from their close vicinity. The annual lint cotton consumption
of the existing textile mills is estimated to be 42,860 mt, which can be fully met from domestic
supply, but their actual consumption does not exceed 30,000 mt Table 2.8 shows the actual
production in percent of the installed capacity of different textile mills.

Table 2.8 Actual value of production of textile mills as % of yearly capacity
Industrial group 1998/1999 1999/2000 2000/2001
Manufacture of textiles 32.8 43.5 53.49
Spinning, weaving, finishing 31.23 42.93 54.31
Cordage, rope, twine, netting 60.22 53-41 45.66
Knitting 32.29 16.37 31.48
Source: CSA (2003)

21

The old and obsolete machineries that exist in most of the textile mills together with lack of
industrial capacity and base, lack of relatively skilled and trained labor and proper production
management are the major factors contributing to this inefficiency. Because of the mills’ limited
processing capacity, the domestic supply of lint cotton is by far in excess of its actual utilization
creating a lot of wastage.
Garment factories that are predominantly owned by private companies perform relatively better
than the textile mills. In 2005, there were 25 garment factories oriented to the export market of
USA and EU following the preferential treatments granted by these countries. The flow of export
to these countries has increased enormously for the past three years, especially to the EU where
the value obtained from export of garment and clothing textiles increased by 28% in 2004 and
144% in 2005.
In spite of the growing export trend for garment and clothing textiles to the international market,
there is a week linkage between the cotton textile sector and the clothing sector where exports of
cotton related garments are out-weighted by garments made from imported fabrics. Some of the
obvious reasons are the poor quality of textile fabrics made in the country and high cost of
production due to inefficiencies experienced by the various textile mills resulting in high price
for fabrics. In addition, lack of flexibility on the part of the textile mills to meet the demands of
small and medium garment factories in terms of the right size, width, and color has made the
working relationship between the two sectors very loose.
Retailers
Retailers play an important role in the market chain of seed and lint cotton, cotton oil seed and
fabrics. Most of the textile finished products and the edible oil produced by the actors in the
cotton chain pass through a network of wholesalers and retailers before they reach the final
consumers.

2.9 Cotton production statistics
A systematic statistical data is available from following two sources.
1. Cotton textile value chain report for Ethiopia prepared by Agridev Consult, on behalf of
Regional agricultural trade expansion support program (RATES), Nairobi, Kenya 2004

22

2. Study Report on The Development Strategy of Ethiopian Cotton/Textile/Garment Sub-
sectors, prepared by China Textile Planning Institute of Construction Beijing, China June
2003
Though these reports are out dated, a summary is given in order to keep the record of the
information. A more recent statistical data from the Ministry of Agriculture is given at the end of
the chapter.
Statistical data from Regional agricultural trade expansion support program RATES
(1996/97 to 2000/01)
The statistics for state farms, private farms and small holder farmers in terms of area planted,
total cotton production and yield per hectare for the period 1996/97 to 2000/01 is given in
Tables 2.9 to 2.11

Table 2.9 Area planted under cotton during 1996/97 to 2000/01 Ha
Producer 1996/97 1997/98 1998/99 1999/2000 2000/01 Average %
share
Tendaho 5450 5652 5955 5645 4117 5363 13
Middle 5153 5368 4789 1667 5407 4456 11
Awash
Upper Awash 1000 1000 1000 1000 1000 1000 02
North Omo 1500 1500 1500 1500 1500 1500 04
Abebo 250 250 250 250 250 250 01
Total state 13,353 13,670 13,494 10,062 12,274 12570 30
farms
Private 18,150 18,150 18,150 18150 18,150 18,150 43
commercial
farms
Smallholders 11,650 11,650 11,650 11,650 11,650 11,650 27
Total 43,153 43,470 43,294 39,862 42,370 42,370 100
Consultant. Submitted to Regional Agricultural Trade expansion Support Program,
Nairobi, Kenya, 2004

23

Table 2.10 Production of seed cotton during 1996/97 to 2000/01 (MT)
Producer 1996/97 1997/98 1998/99 1999/00 2000/01 Average %Share
Tendaho 7943.7 7716.5 9512.5 11503.4 8370.4 9009.3 11
Middle Awash 15024.1 11627.5 9746.3 5763.8 15566.2 11545.6 14
Upper Awash 2100.0 2100.0 2100.0 2100.0 2100.0 2100.0 3
North Omo 3000.0 3000.0 3000.0 3000.0 3000.0 3000.0 4
Abebo 325.0 325.0 325.0 325.0 325.0 325.0 0
State farms (total) 28392.8 24769.0 24683.8 22692.2 29361.6 25979.9 32
Private farms 45375.0 45375.0 45375.0 45375.0 45375.0 45375.0 56
Smallholders 9320.0 9320.0 9320.0 9320.0 9320.0 9320.0 12
Total 83087.8 79464.0 79387.7 77387.2 84056.6 80674.9 100
Consultant. Submitted to Regional Agricultural Trade expansion Support Program, Nairobi,
Kenya, 2004

Table 2.11 Yield of seed cotton during 1996/97 – 2000/01 (MT/Ha)
Producer 1996/97 1997/98 1998/99 1999/00 2000/01 Average
Tendaho 1.5 1.4 1.6 2.0 2.0 1.7
Middle Awash 2.9 2.2 2.0 3.5 2.9 2.6
Upper Awash 2.1 2.1 2.1 2.1 2.1 2.1
North Omo 2.0 2.0 2.0 2.0 2.0 2.0
Abebo 1.3 1.3 1.3 1.3 1.3 1.3
State farms (total) 2.1 1.8 1.8 2.3 2.4 2.1
Private farms 2.5 2.5 2.5 2.5 2.5 2.5
Smallholders 0.8 0.8 0.8 0.8 0.8 0.8
Total 1.9 1.8 1.8 1.9 2.0 1.9
Kenya, 2004

At an extraction rate of 37% the average yearly domestic production of lint cotton during the
period 1996/97 – 2000/01 was about 29.950 MT, of which 24,861 MT or nearly 83% was
destined for the domestic market. The share of textile mills and handlooms and handicrafts was
86% and 14% respectively of the annual domestic sales of lint cotton.

24

Import/Export of cotton lint
As can be seen from the Table 2.12 below, Ethiopia has exported about 4,989 metric tons of lint
cotton per annum during the period 1996/97 – 2000/01. Import of lint cotton, however, was
negligible. The amount exported represents 17% of total annual domestic production of lint
cotton. The major cotton export markets are Africa, Asia, and Europe. The largest portion (67%)
of cotton export was destined to the Asian countries, namely, India, Pakistan, Bangladesh, while
about 23% of the volume of cotton export went to Africa essentially Djibouti. The remaining
10% was destined to European markets.
Table 2.12 Cotton supply, import, export and consumption figures
S.No 1996/97 1997/98 1998/99 1999/00 2000/01 Average
1 Total domestic lint 30,742 29,402 29.370 28,633 31,101 29,850
production (MT)
2 Supply to domestic market 24,746 28,219 24,335 20.959 25,046 24,861
(MT)
3 Supply to export market 4997 1182 5035 7674 6055 4989
(MT)
4 Import lint cotton (MT)
5 Import of textiles and 30,662 34,265 73,983 40,514 42,656 44,423
textile articles (MT)
6 Export of textiles and 1324 1750 5630 9680 8674 5412
textile articles (MT)
7 Net import of textiles and 29,338 32,512 68,353 30,834 34,012 39,011
textile articles (MT) 5-6
8 Net import of textiles and 24,937 27,640 58,100 26,209 28,910 33,159
textile articles in lint equ.
(MT) 0.85x7
9 Total lint cotton supply to 50,683 55,864 82,435 47,168 53,956 58,020
domestic market (MT)
1-3+4+8
10 Population x000 58,144 59,822 61,672 63,495 65,344
11 Per capita consumption of 5.6 5.6 5.6 5.6 5.6 5.6
woven cloth (m2)
12 Per capita consumption of 1.12 1.12 1.12 1.12 1.12 1.12
lint cotton (kg)
13 National consumption of 65,121 67,001 69,073 71,114 73,185 69,099
lint (MT) 10x12
14 Surplus/deficit (MT) 9-13 -14,438 -11,141 13,363 -23,947 -19,229 -11,079

Kenya, 2004

25

As regards import of lint, although Ethiopia does not import lint cotton as a raw material, it
nevertheless imports substantial quantities of finished textile products. During the period
1996/97 – 2000/01, the country has imported 44,423 MT of various textile articles per annum
worth Birr 684.4 million. Volume and value of export of textile articles during the same period
were 5412 MT and Birr 53.7 million. Thus the net import of finished textile goods during the
period mentioned was 39,159 MT or Birr 630.7 million. In terms of cotton lint equivalent, the
average annual net import was about 39,159 MT. The origin of textile import to Ethiopia is very
diversified.
Cotton lint utilization
Various studies conducted in the past show that Ethiopia’s per capita demand for textile products
is about 5.6 m2 or 1.12 kg in cotton lint equivalent. Thus annual demand for lint cotton during
the period 1996/97 – 2000/01 is estimated to be about 65,121.3 to 69,098.8 MT. On the other
hand total annual supply including domestic supply and net import (in lint equivalent) was
58,144.0 to 82,435.2 MT. This indicates that the country faced a substantial deficit in most of the
past five years. The demand for and supply of lint cotton during the period 1996/97 – 2000/01 is
shown in the table above which indicates that the country had surplus amounting to 13,362.5
MT of lint only in 1998/99 when import was substantially high compared to other years.
The deficit shown in the table may have been partially met through informal cross border trade.
Various studies show that the volume of informal cross border trade involving textile products is
considerable. For example, according to the Ethiopian Customs Authority, textile products
normally constitutes about 50% of the contraband seizer. It has been estimated that out of 42
million Birr worth of goods apprehended by the Ethiopian Customs Authority, about 22.5
million Birr worth of goods were textile products. UN statistics on used clothes trading also
shows that Ethiopia has imported about USD 25.7 million worth of used clothes over a period of
10 years. According to the UN data, Ethiopia ranks 13th among the 90 major countries in the
world importing used clothes. The same source also indicates that Djibouti has imported about
USD 29.1 million worth of used clothes during the same period. This clearly shows that informal
cross border trade of used clothes through Djibouti and other border areas is significant.

26

Statistical data from the Report prepared by China Textile Planning Institute of
Construction, Beijing (2003).
With the development of cotton farms the cotton sub-sector has made a historical contribution to
Ethiopian national economy in creating employment opportunities for rural labor-force, and
earning foreign exchanges through exports.
The Output, Consumption, Import and Export of Cotton for the period 1970/71-2002/03 is given
in the Table 2.13

Table 2.13 output, consumption, import and export of cotton (1970/71-2002/03)
Year Acreage Output Yield Consumption Import Export
X1000 ha X1000MT Lint kg/ha X1000 MT X1000 MT X1000 MT
1970 61 14 233
1975 61 18 298
1980 53 27 518 24 5
1985 53 22 392 23 3
1986 53 20 454 22
1987 53 20 468 20
1988 37 21 401 21 3
1989 35 18 332 22 2
1990 36 19 528 20 2
1991 40 12 300 16 4
1992 40 10 200 33 16
1993 41 14 366 22 11
1994 42 15 333 17 13
1995 42 15 357 18 3
1996 42 15 357 18 3
1997 42 15 357 18 3
1998 43 15 354 18 3
1999 43 15 352 18 3
2000 50 34 578 7.7
2001 59 31 569 6
2002 63 33 512 7
Average 49.8 19.6 401.0
Source: Cotton World statistics bulletin of International cotton advisory committee 1998
(Through China report 2003)

From the statistics of cotton production given by two agencies it is clear that the cotton sub-
sector has provided over 90% of its raw materials needed by the textile sub-sector. Otherwise,
foreign currency reserve would have to be spent in importing raw cotton. This could have been

27

an unwise choice. The cotton sub-sector has been vital support for the textile sub-sector.
Therefore, it is obvious that the cotton sub-sector development will directly promote Ethiopian
industrialization.
According to statistics from the Customs of Ethiopia, 6.014 tons of cotton was exported for US
$6.55 million and 3,062 tons of cotton seeds for $50.29 million in 2001/ 02. The Ethiopian
cotton export destinations are India. Pakistan, Indonesia. Denmark. Thailand and Djibouti etc as
shown in Table 2.14
Table 2.14 Cotton export from Ethiopia (x1000 MT)
Importing 1998 1999 2000 2001
country
India 834 1139.5 3574.3
Pakistan 932.8 3119.7 5534.0 1182.9
Indonesia 498.2 543.4
Denmark 452.0
Thailand 250 454.4 102.1
Djibouti 0.3 99.0 0.4 63.1
Yemen 40.4
Greece 501.0
Vietnam 301.4
Sri Lanka 104.0
Switzerland 103.6
Italy 19.1
Total 1183.1 5034.9 7673.1 6055
Sub-sectors: China Textile Planning Institute of Construction, Beijing, China, June 2003

To encourage cotton export, the government has formulated policies, one of which is to charge
15% sale tax for selling cotton in domestic market, but charge none for exporting cotton, in
addition to a 10% return to cotton farms as a reward.

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2.10 Potentials for the development of cotton sub-sector
The potentials of growing cotton are high because of following favorable factors
1. Natural environment advantages.
2. Large labor force and Low production cost
3. The potentiality for expanding the cotton growing acreage
4. Increasing the yield potentiality
5. Domestic and international market potentials
Natural environment advantages
Ethiopia is bestowed with natural environment advantages such as availability of vast land at
suitable sea level heights, sufficient sunshine and temperature, soil conditions, abundant water
resources etc. for the development of cotton sub-sector.
64% of Ethiopian land is at or below 1500m, which provides a vast territory for cotton growing.
The main areas for cotton growing are in low or mid regions from 360 m to 1300 m high. The
country endowed with 13 Ethiopian months of sunshine, the annual sunshine in Ethiopia
amounts to over 3,000 hours, which can fully satisfy the need of cotton growing. The average
temperature in cotton growing area is 26-310 C. Under such conditions, theoretically, cotton can
be planted all the year around. Ethiopian cotton field soils are brown and composed of
denaturation soil and alluvial soil. The content of cohesive particles is 60% while that of sand
particle 40%. The soil is rich in organic matters. Most importantly, with its rich rainfall, nine
rivers, many lakes and as the source of the Blue Nile, Ethiopia is rich in water resource and is
recognized as the Water Tower of Africa, though the water utilization ratio is only 5%.
Large labor force and low production cost
Out of 67 million, 57 million i.e. 85% of population live in rural area. 13 million i.e. 23%
population is between 15-49 years old. (2002). This constitutes ample labor force for agriculture.
Ethiopia has a comparative advantage over other countries in terms of production cost per
hectare. According to a survey by International Cotton Advisory Committee (1998), the
production cost of Ethiopian cotton is 66.3% of that of China, 57.3% America. 33.5% Australia.
23.2% Israel, and 90.8% India. By contrast, because of low production efficiency, the
production cost per kilogram, has a comparative disadvantage and is higher than that of any of

29

the above mentioned countries. Ethiopia also enjoys low cost of cotton ginning, packing and
processing.
The potentiality for expanding the cotton growing acreage
56% of Ethiopian territory is arable land, of which 15%. about 16.85 million ha up to now have
been cultivated. 3.7million ha can be irrigated, though only 197,000 ha, 5% of it has been
irrigated until now. Judged from its arable land and irrigated land, Ethiopia has a great
potentiality for expanding cotton- growing acreage.
Potentials for increasing the yield per hectare
At present the cotton species are primarily American species--- Deltapint 90 and Acalasi (SJ-2).
However, these species have been used for more than20 years, thus giving rise to the serious
problem of species ageing and degeneration. Generally, species will be limited to a 3-5 years use
in the major cotton production countries, because by species renewal, yield can be increased by
l0%-15%, in some cases, even by 30%. Also the use of fertilizers is low and cultivation methods
are not totally scientific. With the use of improved seeds such as crossbred or genetically
modified, increasing the use of fertilizers and scientific inputs for cultivation the yield per
hectare can be considerably increased with the positive effect on total production.
Vast domestic and international market
Assuming 1.5 kg per person per year consumption of cotton and 75 million population (2006)
the domestic consumption of cotton will be 103,000 ton. With the progress of cotton sub-sector
there will be emphasis on the export of cotton. The government has identified textile and
garment sub-sector as one of the priority sectors for rapid industrial developments. All these
factors will lead to increase production of cotton. At the international level, cotton is a kind of
cash crop and it is a leading raw material for the textile and garment sub-sector, and definitely
occupies the dominant position among natural fibers. With the rise of world population and
people’s living standard, cotton will continue its dominant place in global fiber consumption. As
a small cotton-planting country, in terms of its present export scale, Ethiopia has a rather large
export market.

2.11 Cotton production and marketing constrains
According to a study conducted by the Ministry of Agriculture, cotton production and marketing
faces various constraints. The nature and type of the constraints are different. On the production

30

side, the constraints are related to the absence or limited availability of research and extension
services and inadequate supply of inputs, while on the marketing side, the constraints are related
to lack of capacity to supply quality products, inadequacy of the existing infrastructure and lack
of finance. Some of the constraints are as follows.
Strengthening the development of human resources
Qualified and trained human resource is the most important factor in production, marketing and
general management. The development of human resources is of practical importance and
urgency for the developing countries, which possess the advantages of raw materials, labor force
and market potentialities. Labor-force with low cost and high quality is a vital element of
showing the comparative advantages of the industry, and is also to create the most competitive
environment for foreign investments.
Education and training to enhance the comprehensive qualities of the staff on the public farms
can be a concrete and effective method of reinforcing the development of human resources. The
training of personnel can be performed at two levels:
Train personnel of medium and advanced level for cotton management and administration and
technological research. Identify training plans and regulate the management methods of
training; reform the management measures; select devoted and excellent experts in the cotton
production, management, administration, and technology for training personnel in batches in
definite time schedule. Train managers, workers and farmer at the basic level. Improve training
methods to rapidly enhance the trainees’ basic quality and skill.
Production constraints
According to the reports of RATES, Kenya and China Textile Planning Institute of Construction
China, some of the constraints in the development of cotton sub-sector and measures are
summarized below
Shortage of improved seed Varieties
The seed varieties available in the country are either inadequate or do not meet the required
international standards or both. Not much research efforts are made to develop cotton seed
varieties which can allow the production of cotton of acceptable quality and quantity. The seed
variety needed to produce the type of cotton in great demand in the international market is long
fiber seed, and it is not available in the country. More seriously, minimal research efforts are
made to the multiplication of those seed varieties which are already known and used in other

31

countries. These constraints have seriously undermined the effort to improve cotton productivity
and quality.
Surveys demonstrate that in Ethiopia, cotton plants are primarily American species--- Deltapint
90 and Acalasi (SJ-2). However, these species have been used for more than 20 years, thus
giving rise to the serious problem of species ageing and degeneration. Generally, species will be
limited to a 3-5 years use in the major cotton production countries, because by renewal of
species, yield can be increased by l0%-15%., in some cases, even by 30%.
Since 1990s, the cotton species have come into a new utilization era from normal cotton to
crossbreed cotton and pest-resistant cotton. There are two ways to produce crossbreed cotton.
One is breeding among species, or subspecies. This has obvious advantages and is an effective
way to increase the yield, quality and pest- resistance.
Another approach is the development of genetically modified Pest-resistant cotton usually refers
to Bt gene-transformed cotton. Its successful breeding opens a new technological path for anti-
pest cotton species.
The world has come into the era of supplying seeds commercially instead of breeding
independently. It is advocated that seeds for production be replaced every year and that farms
and farmers not to keep their seeds. Seed breeding, crossbreeding, processing, testing, packing
are all done in industrial way. For example, China’s cotton planting acreage has been 4.5-5
million ha. planting acreage of pest-resistant cotton (Bt cotton) has reached 30%, crossbred
cotton is 15% , demonstrating a strong developing trend. Indian cotton acreage is 7-7.5 million
ha, 50% being crossbred cotton. At the same time, America has cotton acreage of 5-5.5 million
ha, 60% of which is anti-pest Bt cotton. These giant countries in cotton production often use
their breeds for 3-5 years. It is generally held that new breeds will increase yield by 10%-15%,
the highest being 30%. In this way, quality as well as its resistance to pests, will also be
improved.
Shortage of technical inputs
Needless to say, if one is to meet required quality standards, availability of adequate amounts of
technical inputs- fertilizers, pesticides, herbicides and better equipment is crucial. The reality in
Ethiopia is, however the reverse. In spite of its visibility by its absence, the attention given to
provide such inputs to the farmers has been minimal, and this has had an obvious negative
impact on improving quality and productivity. As cotton is prone to attacks by different types of

32

pests, absence or inadequacy of pesticides has forced textile factories to receive inferior raw
cotton damaged or infested with honey dew caused by the excretion of sucking insects like
aphides. Following measures are suggested to improve the situation.
In Ethiopia, large-scale farms are highly mechanized. The cleaning of the remaining old Plants,
tilling, raking, leveling, sowing, and preventing pests, diseases and weeds, are mostly dependable
on machineries. Large tractors, sowing machines, leveling machine, large cotton-ginning
machines, Oil extractors and diesel generators are mainly from the former Soviet Union and
Germany. All these machines, suffering from ageing to all degrees and shortage of spare parts,
need renovation. The problem of ageing and shortage of parts also restrict the cotton yield and
quality. The enterprises should reinforce their maintenance work of equipments. Make full use of
the existing machinery potentialities, put into use new parts, and bring down the malfunction
rate. Thus, they can raise the production capability and efficiency and bring into play the scale
effects of large farms.
Fiber quality test
Fiber quality test is the foundation on which cotton quality and price are assessed. Public farms,
on the basis of the existing fiber tests, should reform and introduce new state of art test
equipment, improve cotton fiber test laboratory, enhance the testing measures so that, they can
make a series of scientific test criteria and procedures for the assessment and regulation of cotton
quality.
The government cotton administration should set up agencies to supervise cotton quality. Quality
Testing Station should be established in different cotton producing regions. It should be
compulsory that cotton producer, when applying for government’s financial aid and exports
should testify cotton in terms of quality by the testing certified agencies. The technical staff in
the testing laboratories should be qualified from the recognized institutions.
Large-scale farms should set the role model
Large-scale state farms are the leading force to increase Ethiopian gross output of cotton.
Therefore, the large scale farms should take the initiatives in utilizing new agricultural
technologies, new varieties and planting techniques. And thus act as an example for private
farms and traditional farmers to follow suit. This will drive Ethiopian cotton subsector to
advance.

33

Equalizing fertilization
Fertilizer, being the “food” of cotton, is an important factor of improving cotton yield, the
increase percentage being 30-50%. Now the advanced cotton-planting countries have undergone
the transition from single nutrition to multiple nutrition and the transition from nitrogen fertilizer
to the combination of nitrogen with phosphate, potash and trace elements.
Ethiopia uses a rather small amount of fertilizer. Since there have been no fertilizer factories in
the country, all fertilizers depend on imports. The amount of fertilizer is as low as 17kg/ha, in
comparison to 83kg/ha for the average global level, 97kg/ha for the North Africa, and
1,125kg/ha for China. The recommended amount for Upper Awash is N 64kg/ha and P 46kg/ha
and for Tendaho Farm Carbamide 100kg/ha. The fertilizer method is manual spraying along with
diammonium before sowing, followed by disc harrowing, and addition of Carbamide during the
periods of flower and boll.
Control of disease and pests
Major cotton pests in Ethiopia include bollworm, pink bollworm, leafhopper, aphid. Cotton-leaf
acarid, trips and leaf miner. Chemical pesticides are Polyethrine, Thiodon, Carbamate,
Endosulfan, Pyrethroids and Deltonet. All imported from the U.S.A, U.K, France, and
Germany.
Diseases and pests cause 30% loss of cotton production and also affect the cotton quality.
Therefore, forecast teams of cotton diseases and pests should be established and integrated
measures should be adopted to control diseases and pests to ensure high yield and quality of
cotton.
Absence of extension services
Extension service to small-scale cotton producers is virtually non-existing. What ever is
produced at this level is entirely using traditional practices which can ensure neither adequate nor
quality production. The quality constraints on its part have diminished the potential earnings of
small scale farmers. In general absence of extension services have impeded the expansion of
modern cotton production practices in the country.
Limited Research work
Overall limited attention is given to cotton production in the country. Research on improving
productivity is minimal. There is only in one center-Melka Werer that some research is

34

undertaken. And even this is limited in scope, focusing only on irrigation practices in the area.
There is no research on rain fed production where the efforts of small farmers are concentrated.
In view of this new varieties and technologies should be employed to raise the cotton quality and
yield, which involve the work of tilling, sowing, planting density, plant protection, fertilization.
Irrigation, preventing pests, diseases and weeds, as well as chemical regulations.
The development of science and technology in connection with cotton should be further stressed.
That is to say, equip the research laboratories with scientific equipment; improve the functioning
of cotton research institutions, employ qualified research staff to strengthen scientific innovation
and technological development ability. The scientific research and development findings should
be transferred in the fields for productivity and yield improvements.
Scientific R & D institutions should cooperate with cotton enterprises, conduct surveys, spread
related knowledge, and promote the academic exchanges for the dissemination of cotton science
and technology. The institutions should also bring into play the advantages of the industry as a
whole and devote themselves to the comprehensive R&D activities of high standards, profound
scientific contents, and high added values.
Limited Irrigation Practices
Irrigation practices are limited to a few state and large-scale private farms operating in a few
areas. The rest is rain fed where erratic rains frequently cause crop failures or the production of
cotton of inferior quality and quantity.
Ethiopia is accessible to abundant water resources for irrigation, though its present utilization
rate only 5%.
As long as water is provided, cotton can grow all the year around. However, Ethiopian cotton
fields with irrigation constitute 22% of the whole cotton planting acreage. The limited irrigation
includes ridge and furrow irrigation and flooding, with the water from pumping or blocking. The
rest of the cotton fields depend on rainfall. Therefore, the low rate of Irrigation and heavy
dependence on rainfalls severely restricts the development of the cotton sub-sector.
With irrigation, un-ginned cotton yield is 2-3tons/ha, while if only rain-fed, un-ginned cotton
yield reduces to 0.8-l.5 tons/ha.
In its growing and breeding period, cotton needs irrigation 4-5 times, with the amount of 45,000-
60,000 m3/ha each time. Irrigation should be conducted 10-15 days before sowing, and also 3-4
times during its reproducing period. Usually there is no irrigation during the seedling period, but

35

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