Beyond the FibreCapturing cotton’s full value in Africa

A presentation to WTO members – WTO Cotton DaysBy Matthias Knappe and Gérald EsturDate: 28 May 2021

Cotton By-Products (CBPs) in Africa: What is Covered

Chapter 1: Markets for cottonseed oil and cakes• Cotton by-products – such as cottonseed oil and oilcakes – can contribute meaningfully to

reducing poverty, creating jobs and increasing economic growth in Africa. • These derivatives can represent up to 30% of the value of seed cotton.

Chapter 2: How does Africa use cotton by-products?• Oil and cakes have not been fully exploited, despite a potential of 400,000 tons of oil and

500,000 tons of protein – vital for the growing livestock industry. • Stalks and other by-products have also been neglected.

Chapter 3: Challenges and opportunities to develop cotton by-products

Chapter 4: Recommendations

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Major CBPs with potential to create additional income & jobs• Cottonseed oil, which competes with other vegetable

oils, is typically used for human consumption (sometimes for soap manufacturing, plastics and pharmaceuticals);

• Cottonseed hulls are used either to generate energy for the processing facility or are blended with meal for animal feed and, less often, as fertiliser;

• Cottonseed cake, which competes with other meals, is used as animal feed;

• Linters are a source of cellulose used in goods such as yarn, plastics and filling material;

• Unprocessed cottonseed is sometimes used for animal feed;

• Cotton stalks can be used for compost, boiler fuel (briquettes, pellets) or particle boards, or to prepare pulp and craft paper.

• Edible mushrooms can be grown on cotton stalks.

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Cottonseed• Cotton is mainly cultivated for its fibre and

is often considered to be synonymous withcotton lint, a raw material for cottontextiles.

• The ginning process of seed cottonseparates the cotton lint from cottonseeds(about 40% & 55% resp.).

• As cottonseed is an oilseed, cotton is botha fibre crop and a food crop.

• Africa produces about 2 millions t lint and2.75 million t cottonseeds (from 5 million tseedcotton on 5 million ha).

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Meal46%

Oil16%

Hull27%

Linter8%

Waste3%

COTTONSEED AVERAGE COMPOSITION

Source: ICAC

Fuzzy Seeds

• The primary use of cottonseeds is for plantings. In Africa, an estimated 150,000 tons are treated to be used as planting seeds.

• Fuzzy seed, or whole cottonseed (WCS), is a valuable feedstuff for beef cattle, particularly for dairy cows (high content of protein, energy & fibre).

• WCSs are increasingly used as cattle feed in landlocked Sahelian countries.

• Cottonseed is further processed to produce linters, hulls, oil and meal.

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Linters and Gin Waste• Linters are the residual short fibres which adhere to the fuzzy

seed after ginning (4-8 % of seed weight). The process of removing fuzz from seed is called delinting (mechanical or acid). Estimated production in Africa: 150,000 t.

• Linters are not suitable for spinning but, being 75-80% cellulose, can be used to produce absorbent cotton, which has medical, cosmetic, dental and many other practical uses.

• In Africa, Linters are generally exported due to the absence of local value-added industries.

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• Gin waste or gin motes (small/broken/immature seeds with attached fibres) - about 3% of ginned seed cotton weight - can be used to produce nonwoven products, to feed livestock or as soil amendment.

• In Africa, gin motes (est. production: 150,000 t) are mostly treated as waste products; some ginners sell lint-cleaner waste. Processing gin waste into fuel pellets could provide a renewable source of energy that could potentially be a viable source of revenue for cotton gins.

Cotton Hulls7

• Hulls are the outer covering (seedcoat) of the cottonseed and a direct by-product of the dehulling process to expose the kernel; recovery of hulls from cottonseed ranges from 20 to 30% of the seed weight.

• Main uses of hulls are in livestock feed,fertiliser and soil conditioner industries, oil-well packing material, furfural productionand raw material for various chemical industries.

• In Africa, the most important uses of hulls (estimated production: 700,000 t) arelivestock feed (often blended with CSM) and gasification for power generation at the processing facility.

Cottonseed Oil8

• Oil is the cottonseed’s most valuable by-product, which is obtained by crushing the cottonseed kernel.

• Oil content of the whole seed ranges from 5-22% (28-35% of kernel). Oil can be extracted either mechanically or chemically. The solvent-extraction method is much more efficient but the technology is more sophisticated, more capital intensive, and only suitable for large processing capacities.

• Refined cotton oil is used for cooking and salad dressing.

• Cotton oil is healthier than palm oil:cholesterol-free, low levels of saturated fats, 70% unsaturated fatty acids, no trans fatty acids, high and rich in vitamins (notably vitamin E).

Cottonseed Oil

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• In Africa, cottonseed oil produced withvarying mixes of the three types ofprocessing (artisanal, semi-industrial andindustrial) competes on the domesticmarket with imports of edible oil (mostlypalm oil). Total production of cottonseed isequivalent to about 425,000 tons of oil.

• Cotton oil is the main source of edible oilfor the population in the cotton areas inWCA.

• The use of cotton oil for producing biofuelis unlikely to be economically viable aslong as African countries are not self-sufficient in edible oil.

Cottonseed Cakes and Meals• Cottonseed cake and cottonseed meal are joint-

products of the oil extraction process that can be used to feed livestock, as well as natural fertilizer.

• Cottonseed meal (CSM) has a protein content of about 40%. Meals obtained from undecorticated or partially dehulled cottonseeds meals are rich in fibre (up to more than 20%); mechanically-extracted cottonseed cakes and meals are richer in oil.

• Historically, cotton seed has not been a viable source of protein for humans due to gossypol, which is toxic to monogastric non-ruminants. Ultra-low gossypol cottonseed bioengineered by research in the USA has a huge potential as human protein source.

• In Africa, total production of cottonseed is equivalent to about 1.2 million tons of CSM, which is competing on the domestic market with imported meal (mostly soybean). CSM cheaper than SBM with a similar nutritional value.

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Cotton Stalks and Biomass Use• Apart from cottonseeds, stalks are the only by-product of the

cotton cultivation, which generates 2-3 tons of stalks per hectare.

• As their fibrous structure is comparable to hard wood, cotton stalks can be used as a source of fuel, an alternative raw material for the manufacture of particle boards, preparation of pulp and paper, hard or corrugated boards and boxes, cellulose or cellulose derivatives and as a substrate for growing edible mushrooms.

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• In Africa, there are no commercial uses for cotton stalks. Farmers usually cut and dry the stalks before burning them. Stalks are sometimes used as fuel, as cattle feed or to make manure. About 12.5 million tons of biomass could be produced from cotton stalks.

• Cotton stalk-based products can provide opportunities to create new sources of incomes for small-scale farmers, including women, and improve nutrition.

Cotton Value Chain in AfricaVolume (est.) Market price (per t) Value (est.)

Cotton area 5 million haBiomass 12.5 million tSeed cotton 5 million t $50 $2.5bn

Lint 2 million t $1,750 $3.5bnGin waste 150,000 tCottonseeds 2.75 million tPlanting seeds 150,000 tOilseeds 2.6 million t $175 $450mnLinters 150,000 t $50 $8mnHulls 700,000 t $40 $28 mnOil 425,000 t $1,000 $425mnCake/meal 1.2 million t $275 $330 mn

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Potential Benefits from CBPs• CBPs have the potential to compete with lint as sources of

income to numerous stakeholders and to significantly contribute to the overall cotton subsector profitability and contribution to income generation, employment, poverty reduction and better nutrition (for both human and livestock).

• Significant room for improvement both in extraction rate and quality of cotton oil.

• High potential for value addition from removing gossypol from meal.

• Development of CBPs can improve balance of payments by import-substitution of edible oil and animal feed and can increase intra-regional trade.

• BPs made from cotton stalks have the potential to respond well to policy priorities in many African countries: creating income opportunities for farmers, small-scale business in rural areas (including for women), and for entrepreneurs; improving nutrition (mushrooms).

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Major recommendations14

• Identify and assess value addition activities (processing and marketing) in the national context;

• Raise awareness among private and public stakeholders on the potential of CBPs for value addition;

• Increase transparency in the cotton sector, including on the full value of seed cotton, lint and seeds, and the opportunities and cost-benefit analysis to add further value;

• Promote financial and/or technical assistance from government or funders to add value to CBPs;

Major recommendations15

• Ensure government support for the establishment of CBPs processing businesses, for example by:• including by-products in national cotton

sector development strategies; • implementing clear national policy guidance

on the development of the edible oil and meal production industries, with favorable tax regimes;

• putting in place policy incentives to encourage investment in or adoption of technologies to add value;

• enforcing tariffs and taxes on imported oils and meals.

• Build capacity to establish well-organisedindustry groups;

• Promote South-South cooperation, including with countries such as Brazil, China, Egypt, India or Turkey.

In Summary• Cotton is both a fibre crop and a food crop. The

relative value of cotton by-products to the price of lint has increased, and the upward trend is likely to continue as demand for edible oil and livestock and poultry feeds is growing in Africa, exceeding domestic production.

• CBPs have a growing market in Africa and are potentially an important complementary source of revenue for the cotton sector. However, as CBPs have not received much attention so far, their potential is far from being fully exploited and local markets for CBPs other than oil and meal are underdeveloped. Cottonseed oil and meal domestic markets suffer from unfair import competition (tax regime, smuggling).

• Technologies for processing by-products to add value to cotton exist but they are not known and not readily available.The lack of linkage between the cotton sector, the oil sector and the livestocksector is an obstacle to a wider use of CBPs.

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Thank you17

The documents is available in:

Français: Au-delà de la fibre: Valoriser pleinement le coton en Afrique (FR) (intracen.org)

Español: Más allá de la fibra: Aprovechar plenamente el valor del algodón en África (intracen.org)

English: Beyond the fibre: Capturing cotton's full value in Africa (intracen.org)

Thank you to the WTO Secretariat for translating the publication into French and Spanish