Cotton producers in Ethiopia face several challenges. There are 20 ginnery factories in Ethiopia. But most are more than 50 years old and need to be replaced.

Unavailability of land and bank loans is another major challenge for the sector. There are problems related to the supply of seeds, pesticides and other inputs.

Last year Ethiopia produced 60,000 tons of ginned cotton. But demand by domestic textile industries was for 70,000 tons. The balance was covered by imported cotton from India.

The country plans to increase cotton production by 40 per cent in the current fiscal year. Investors are developing cotton plantations in various regions. With this farmers are confident they can satisfy the domestic demand and export the surplus cotton.

The country had banned cotton exports in 2010 hoping to satisfy the demand of the local textile industry. The ban lasted for six years.

After a long debate, Ethiopia recently allowed the import and use of GMO cotton seeds. Two BT cotton seeds from India have been granted permission. However on the whole farmers have reservations on the research conducted on the viability of BT cotton seeds. As a rule cotton growers do not prefer to use BT cotton.