Vietnam, Africa cotton industries eye closer links

A delegation of cotton producers and exporters from eastern and southern African countries met with their Vietnamese counterparts in Ho Chi Minh City on August 6 to explore business opportunities.

According to the Vietnam Cotton and Spinning Association (Vcosa), more than 51 percent of the materials needed for short-staple yarn production is natural cotton, but last year local production met only 1.2 percent of demand.

The country had to import a lot of cotton from the US, South Asia, and Africa, it said, adding that imports would continue to be the main source of raw materials for the spinning industry.

Speaking at a seminar titled "Market transparency – East and Southern African Cotton for Vietnamese Spinners", Nguyen Hong Giang, Vcosa General Secretary, said last year Viet Nam imported more than 581,000 tonnes of cotton for 1.17 billion, up 39.1 percent from 2012, mainly from the US, India, Australia, Brazil, Ivory Coast, and Pakistan.

The main source of raw materials for Vietnamese spinning industry are from eastern and southern African countries.

In the first seven months of this year, the country imported 458,000 tonnes, up 34.9 percent, he said.

However, imports from Africa accounted for a modest portion, he said, adding however that he saw great potential for Vietnamese and African cotton businesses to boost cooperation.

Do Huu Huy, deputy head of the Ministry of Industry and Trade's Africa and South West Asia Market Department, quoted Vietnamese firms as saying African cotton is of fairly good quality and suitable for their yarn production.

"But most of the imports from Africa are done through commercial firms in France, Switzerland, and India, making them more expensive than direct buying," he pointed out.

Another problem is that cotton from east Africa usually has high sugar content, affecting the production process and product quality, he said, while Vietnamese firms sometimes also found cotton batches contaminated.

Due to imports through intermediaries, feedback on quality is a complicated process and takes a lot of time, he said.

The seminar – organised by the International Trade Centre and Vcosa – is expected to enable Vietnamese importers to work directly with African cotton producers and exporters, he said.

Vietnamese firms can expand imports from the region, share experience and research, and invest in spinning mills in African countries, he said.

"Kenya, Malawi, Mozambique, Zambia, Uganda, Tanzania, and Zimbabwe all grow cotton with a combined output of 450,000 tonnes per annum,” said Marco Charles Mtunga of the Tanzania Cotton Board.

"Regional cotton consumption is still limited and that makes the region a good source of cotton lint."

Tanzania, for instance, produces 120,000 tonnes of cotton a year, he said, adding that 70 percent of it is exported, mainly to China, Indonesia, Thailand, India, Bangladesh, Vietnam, and Kenya.

A similar seminar is organised in the northern province of Thai Binh.