COUNTRY STATEMENT TO THE 65th PLENARY MEETING OF THE INTERNATIONAL COTTON ADVISORY

COMMITTEE 2006 IN GOIANIA BRAZIL.

INTRODUCTION.

Cotton output during 2005/06 season reached 126,228 tons that is 10% more than114,496 tons of lint produced in 2004/05. the increase is mainly attributed to adequate provision of of supply of insecticides and prevalence of favorable weather.

During 2005/06 farming season a total of 581,189ha were to be sown to cotton an increase of 3.6% of the area under cotton in 2004/05 farming season. However only 44.4% of the area was planted due to occurrence of one of the worst drought to ever hit the country at the prime planting time in the Western Cotton Growing Area which accounts for over 95% of total cotton output. it is unlikely therefore that Tanzania's goal of raising cotton output to 135,750 tons of lint by 2006/07 will be realized.

2006/07 crop forecast

cotton output for 206/07 is projected to reach only 45,000 of lint.This represents a drop of 47% when compared to a crop of 126,228 tons obtained in the preceding season. As of August 31st, 2006 a total of 101,865 tons of seed cotton had been produced. Because of a smaller crop, stiff competition between cotton buyers saw cotton prices sky rocketing from an average price of TShs 220 per kilogram of seed cotton paid to farmers in 2005/06 to TShs 450 this season.

Private companies are presently dominating the cotton business arena as all Co-operative Unions stayed out of business this season. A total of 29 firms were registered to procure cotton during the season.

Local Consumption

The newly privatized textile industry is still struggling to attain the production levels of the 1980s. Presently, local consumption of cotton is limited due to low mill capacity as investors are expanding the newly acquired facilities on a step by step basis. Currently, there 12 working spinning and weaving mills which employ about 12,000 people. Total mill capacity is estimated at 200 million metres of woven cloth whilst domestic demand is pegged at 300 million metres. During the 2005/06 season, local mills consumed 28,285 tons of lint as compared to 30,475 tons during the 2004/05 season

Exports

During the 2005/06 season, Tanzania exported a total of 97,943 tons of cotton lint worth US Dollars 101 million as compared to 84,021 tons values at US Dollars 92 million that ware exported in 2004/05 season.

Major markets include China, Indonesia, Thailand, India, Vietnam, Taiwan, Portugal, Kenya, Bangladesh and Malaysia.

Future Prospects.

Because of good producer prices paid to farmers this season, there will be an inevitable increase in planting intensions. With probable return of favorable weather, Tanzania is projected to produce 134,000 tons of lint during the 2007/08 season.

For two seasons in row, cotton has overtaken coffee in terms of foreign exchange earnings for Tanzania. Given these and other developments, Tanzania is currently undertaking a reassessment of its cotton sub-sector development strategy.