The drought in Africa has hurt the cotton crop like never before. The crop has failed to a very large extent and production has declined considerably. West and central Africa have experienced insufficient rainfall in several cotton producing regions and are the worst affected areas. Cotton accounts for 5-8 percent of gross domestic product across West Africa.
The cotton industry was already struggling to cope with the subsidies paid to farmers in the US. Unfortunately, the plea by African cotton producers at the WTO did not make any headway in stopping the subsidies.
Falling cotton prices are also the bane for the African cotton producers, which in turn brings low returns, and compels them to shift to other crops. Some of the countries are heavily dependent on the cotton crop, which will affect the livelihood of a lot of people in the region.
US is one of the key markets for African cotton. Thus, the sudden weakening of US Dollar has also shrunk the profits for cotton traders.
The cotton producers of Africa are sailing in the same boat as their Australian counterpart, as even the latter's cotton and wool production has been affected in a big way due to the drought in Australia.
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