Situation Synthétique de la CMDT

This note presents the situation of the Malian cotton sector as of 2001/02, with emphasis on the possibility of emerging from the crisis at that time. ] The CMDT, the Malian company for textile development, has as its mission the production, storage, and marketing of cotton. Despite excellent performance over the years, CMDT was faced by a major crisis in 1999/2000 which has persisted. Cotton is very important to the Malian economy. The area of the cotton zone is about 163,303 km2, and included a population of about 3.8 million in 2000. Income from cotton was 96.5 billion CFA francs in 1998/99. However, since the 1999/00 campaign, the producers’ income decreased, falling to 41.3 billion CFA francs in 2000/01. Since the devaluation of the CFA franc in January 1994, the cotton sector regained its profitability and competitiveness, with a production of 523,000 tons in 1997/98. However, the production boycott undertaken by many producers in 2000/01 caused a huge production decrease of more than 200,000 tons. Producers were angered at the decision of CMDT to reduce the producer price by 35 CFA francs. Thus, the producer’s price went down from 185 CFA francs/kg in 1997/98 to 150 CFA francs/kg in 1999/00. Since 1998, the world price of cotton fiber has fallen, which caused the current crises in the cotton sector. The average price of cotton fiber in the international market went down from 925 CFA francs. The CMDT has announced higher seed cotton prices for the current campaign, with an expected commercialization of 575,000 tons. However, the cotton sector is not out of crisis yet. First, there is a question of whether the CMDT is financially able to honor the promise made by the Malian authorities that the company will buy all cotton produced in the country at 200 CFA francs/kg, in view of the continuing decrease of cotton fiber price on the international market. Second, the costs of cotton fiber to the CMDT calculated for the current campaign are higher than the decennial world average. Therefore, the 2002 exercise risks to be a deficit year again for the CMDT. The solution to this crisis would be to maintain the producers’ price at 200 CFA francs/kg and to restructure the CMDT. However, restructuring CMDT does not mean to privatize it , even though some of its functions can be managed by private sectors. Restructuring CMDT needs to be accompanied with a financial support of about 55 billion CFA francs for layoff costs of “excess” employees and other restructuring costs. The functions that need to be transferred to other players may be the supply of agricultural inputs, construction, planning, or management of natural resources.