Cotton is a major cash crop. From the 1940s to 1970s, Ethiopia was importing raw cotton to satisfy the domestic demand of its textile factories. Following the establishment of state farms and large-scale private farms in 1970s, the country started exporting cotton.
Where does Ethiopian cotton come from?
The major markets for Ethiopian cotton are Africa, Asia and Europe, with Asia alone accounting for 67% of the total exports (EIA, 2012). Currently, the price of Ethiopian cotton is determined by textile industry development institute as Grade ¡°A¡± ($1.47/kg), Grade ¡°B¡± ($1.43/kg) and Grade ¡°C¡± ($1.40/kg).
What is the economic role of cotton in Ethiopia?
Economic role of cotton in Ethiopia Cotton as Industrial input: Cotton crop has direct connections with various agro-processing industries like textile, oil mills and the livestock sub sector. In other words, the crop has a direct linkage with the industrial sector. It is a major industrial input for textile firms.
How much does Ethiopian cotton cost?
Currently, the price of Ethiopian cotton is determined by textile industry development institute as Grade ¡°A¡± ($1.47/kg), Grade ¡°B¡± ($1.43/kg) and Grade ¡°C¡± ($1.40/kg). But Ethiopia shares only 5% of total production in Africa (Ethiopian Investment Agency [EIA], 2012; ESTC, 2006).