by-Products Project – unlocking the hidden value
In close cooperation with IAM – Mozambique Institute for Cotton and Oilseeds
The following communication, dated 12 November 2020, is being circulated at the request of the delegation of Mozambique.
In 2020, the Government of Mozambique approved two key policy documents: The Quinquennial Plan 2020-2024 that guides overall development interventions, and the 2020-2024 Program that guides poverty reduction efforts in the agrarian sector. One of the priority areas is to reduce considerably the importation of cooking oil, which in 2018 accounted for about 14% of the total value of importation, ranked third after rice and wheat. This prompted the newly restructured Ministry of Agriculture and Rural Development to emphasize the need to increase the production of oilseed crops, including cotton.
Cotton is grown mainly for its fiber, or lint. Nevertheless, commercial applications exist for other parts of the cotton plant, such as the stalks, husks, cottonseed and short-staple fibers. Cotton by‑products therefore represent an opportunity for producing countries to increase the benefits they derive from their cotton production. These benefits can include: i) new income streams for farmers and processors; ii) increased resilience of farmers against external shocks; iii) increased domestic value added; iv) access to new markets; v) improved trade balance, through increased exports or import substitution; and vi) reduced waste in the cotton value chain.
Before this study, there was a full gap in the literature about cotton by-products in Mozambique. The country has not been exploring cotton by-products due to limited investments in infrastructure, equipment, technologies, consumption and know-how over transformation techniques, and limited export of processed products. There are two main players producing cotton by-products: GEIN and MCM. MCM exports all its production. GEIN also relies on exports but some of its products are also consumed locally. For instance, the soaps produced by GEIN are consumed locally, but only in small proportions, relative to what is exported. All of MCM's final products and cotton threads are exported. Since the raw materials are imported, the factories (GEIN and MCM) produce year-round. There is an increasing demand for cotton thread, and this explains the plans for expanding the installed capacities.
Priority of cotton by-products development should go to northern Mozambique, focusing on cottonseed oil and soap production, given their poverty reduction effects, and their alignment with policies to increase the domestic production of cooking oil in order to improve the trade balance.Given the recent inauguration of artisanal cotton textile in Namialo (also in northern Mozambique), in the medium term more emphasis should be equally given to cotton thread. Finally, mechanisms should be explored to encourage the collaboration of artisanal textile producers with the industrial thread producer MCM (production in in southern Mozambique), either through training of farmers' association, marketing of artisanal thread and cloth produced by smallholder farmers in the north and that could perhaps be exported by MCM or other arrangements.