Organization and Performance of Cotton Sectors in Africa ... - infoDev

CHAPTER EIGHTValorization of SeedCotton By-ProductsNicolas Gergely and Colin PoultonAs pointed out in chapter 2, by-products derived from cotton seedprocessing have growing markets and are potentially an importantcomplementary source of revenue for cotton sectors in Africa. Accordingto standards worldwide, seed cotton by-products (cottonseed oil and cake)typically represent 20–25 percent of the total value of seed cotton. However, onestark finding in this study is that the markets for these products are not welldeveloped in Africa and that prices received by ginners are often low; thus, farmersare generally not getting the full returns from the processing of cotton seeds.STRUCTURE AND ORGANIZATION OF OIL SECTORSThe study countries show important differences in the organization andperformance of their cottonseed oil sectors. These differences exhibit someparallels with the differences in organization across the cotton sectors. However,because the organization of the oil sector is not the major focus of this study, itwill be discussed only briefly. Meanwhile, differences in the performance of oilsectors have important consequences for the profitability and competitivenessof each national cotton sector.Table 8.1 shows considerable variation in the number of cottonseed oilprocessors across the study countries. There is no domestic industry in Mozambique(where demand for cake is extremely limited), a monopoly in Cameroon,one dominant price setter in both Burkina Faso and Mali, and an increasingly97