Cameroon Cotton Development Company exports 76-80% of its cotton. Affected by the international financial crisis, the world economy has declined, and the company’s cotton exports have been deeply affected.
In recent years, world cotton prices have fluctuated greatly. Cameroon’s cotton production has been on a downward trend since 2004. In 2004-2005, cotton production was 306,000 tons, in 2005-2006, 208,000 tons, in 2006-2007, 184,000 tons, and in 2007-2008, 110,000 tons. The company has taken measures to increase subsidies to cotton farmers and increase investment to strive for a cotton output of 150,000 tons in 2008-2009. In contrast, international cotton prices continue to decline. In September 2008, the cotton price was 761,000 CFA francs/ton, and in December 2008, it dropped to 598,000 CFA francs/ton, a price drop of 21%.
Affected by the international financial crisis, some traditional customers in Cameroon were unable to obtain bank loans and were forced to cancel orders. Cameroon cotton could not be shipped, causing a backlog of cotton for the company. According to the current price, the 62,700 tons of cotton in stock can be sold for 46 billion. However, the 7,163 tons of cotton and the 5.5 billion franc payment that were previously sold at a price higher than the current market price have not been recovered. How to solve this problem still requires negotiation between the company and the customer.
