Investment Opportunities in The Field of Cotton Planting & Marketing [Archives:2001/27/Business & Economy]

July 2 2001

Mahyoub Al-Kamali
Agricultural sources have reported YT that there is a remarkable increase in orders from foreign markets to buy big quantities of Yemeni cotton as it is marked by its high quality. This will provide the private sector better investment opportunities. It can extend the cotton plantation done on100 thousand Fadan from which Yemen export 20 thousand tons of cotton annually.
Sources in the General Corporation for Agricultural Services revealed that the Yemeni cotton a highly valued in foreign markets. There are some orders from the foreign private sector to establish joint ventures with the general Corporation for the Textile and weaving to increase the production and exportation volume of cotton.
Fluctuating Production Volume
Sources revealed information about the cotton plantation in Yemen and the resources available to invest in this field. In 1975-1976 Yemen produced about 40 million Kgm of cotton. In 1983, the production went down to 20 million kgm. Then the production volume remained constant at this volume until the agricultural season in 1990.
The slump in cotton production is attributed to natural, economic and social factors . The situation deteriorated to such an extent that during 1990-94 four million kgm of cotton was produced annually. This has led the Yemeni government adopt the agricultural reform program within the framework of its overall economic reform program which has been embarked upon since 1995.
The Government Plan to Increase Cotton Production
The agricultural reform program includes taking measures to promote cotton plantation subjecting the cotton prices to the supply and demand mechanisms. It also includes establishing a project to develop the production volume of cotton under the supervision of the General Corporation for Agricultural Services. The program also ensured support for the Cooperative Agricultural Associations and the Agricultural Production Fund to increase the cotton production.
The general GCAP renders more services and facilities in the field of marketing and production for cotton farmers including supplying them with good seeds. It also provides support to farmers who plant cotton in more than 500 to 800 fadan.
Development measures taken in this direction led to an increase in Cotton production. In 1997 Yemen exported 7 million kgm of cotton in comparison to 2 million kgm in 1996. In 1999, cotton exports reached million kgm, that is equals 20 thousand tons. During the past three years, the revenues from cotton exports reached $12 million
Encouraging the Private Investment
Polices of the agricultural reform came to face some difficulties including the financial limitations which to improve planting and producing cotton.
Therefore, the Ministry of Agriculture identified new areas which have more favorable weather for cotton plantation. It also took measures to support the trend to encourage the private sector to invest in the production, marketing and manufacturing of cotton. This can have a salutary effect to improve the balance of payment of the state, and buoy up the economy of the country.
Agricultural Sources indicate that the private sector investment in this field will make available the modern technology and all necessary insecticide for pest control.
Yemeni Cotton and its Quality:
Yemeni cotton is of high quality. It competes with that of Egypt. The Yemeni Corporation for Textile and Weaving exports cotton to Portugal, Spain, Germany, Turkey through a Swiss company which markets 500 tons on an annual basis from many countries all over the world.
There are two factories for Weaving and Textiles in Sana’a and Aden. However, the need for the private sector still exist to invest in the weaving and textile sector. According to the official plans, during the current season and until the end of the 2001 there will be a campaign to extend cotton planning to many areas. In 2002-2003 it will be extended to Lahj and Hodeidah.
Agricultural sources confirm that there are serious efforts to increase the opportunity for the private sector to invest in the planting, cotton manufacturing and marketing of cotton which will be a promising source for generating revenues to support the Yemeni economy.