The Ethiopian Textile Industry Development Institute (ETIDI) has drafted a proposal to ban cotton exports due to concerns that the domestically produced crop won’t be sufficient to meet the needs of the textile industry. If cotton exports are allowed and there are not sufficient raw material supplies, the textile industry would be forced to import cotton at a much higher cost.
However, cotton professionals have countered by saying that they have already made commitments to export the fiber, and a ban would force them to renege on those contracts, potentially doing irreparable damage to important business relationships, according to the Ethiopian Cotton Producers, Ginners, and Exporters Association (ECPGEA).
There is, however, a silver lining in this dark cloud for cotton producers. If exports are banned and growers are forced to sell their cotton only in the domestic market, they will be permitted to charge international prices. That is a significant concession, given that the current global price of $1.27 per pound is the highest it’s been in 15 years.