Marketing of baled cotton commences immediately after cotton is ginned and baled. A good part of the cotton crop is sold before the harvesting starts as forward contract. Virtually all the cotton crop produced in Uganda, except a small percentage, is exported through international cotton trading companies. Most of the ginning companies in Uganda, have so far preferred indirect exporting, delivering baled cotton on Ex-Gin or on FOT (Free on Truck) basis to the exporting company, which assumes ownership of the goods, completes the export formalities and physically exports the cotton.
Harvesting and marketing of cotton starts each year in January and can extend until end of June. This extended period gives Uganda marketing advantage.
Major Destination Markets for Ugandan Cotton
India, China, Thailand, Malaysia, Indonesia,South Korea, Switzerland and UK are the major importing countries for the Ugandan cotton. It should be noted that the UK, Switzerland and Singapore are not destinations for physical cotton but the location of international merchants that buy cotton mostly on FOT or FOB basis for onward sale in major consumer markets. Some merchants even have ginneries, through which they buy seed cotton, gin, bale and export the lint cotton to the above destinations under their own label.