Cotton farmers in the country have expressed satisfaction with the minimum price of cotton pegged at K320 per kilogramme (kg) this year.
However, the minimum price is K55 lower than what was offered last marketing season.
In an interview on Wednesday, Cotton Farmers Association of Malawi (Cofam) president George Nnesa said while the minimum price is below what the buyers were offering last year, the offer is better compared to K150 per kg which vendors are offering farmers.
“We are happy that at last the buyers are on the ground offering to as much as K360 per kg, only that they have come at a time when most of our cotton has been sold to vendors at as low as K150 per kg. And it is hurting to note that our farmers had fallen prey to this, leaving them with no returns.
Nnesa said it is unfortunate that some cotton growers lost out by selling their early to vendors.
“Sadly, we do not have so much to supply to the markets when they opened because a lot of stock had already been sold out [to vendors],” he said
However, Nnesa said while the association has not been able to get more than what they were offered last year, they hope the K320 minimum price will set as a benchmark for next year’s marketing season.
African Institute of Corporate Citizenship (AICC) chief executive officer Felix Lombe on Wednesday also described this years’ cotton minimum price as more practical as compared to last year’s, saying the price last year only dampened competition in sector.
“Realistically, I would say that this year’s price is practical. If we are to put it in dollar terms we are slightly above what other countries are offering their farmers. Unlike other commodities, the price of cotton is determined by farmers and ginners who agree on the price.
“The unfortunate thing about the whole development is that the agreement came late when farmers have sold a good portion of their seed cotton to traders at a very low price,” he said.
In a written response to a questionnaire on Thursday, Cotton Council of Malawi chairperson Patrick Khembo said the market this year is progressing well since opening on May 17.
“The price was negotiated between farmers and buyers, and both parties appear happy. As long as they are happy, the council is also happy,” he said.
Malawi’s economy is highly dependent on agriculture, with cotton contributing a around $3 million annually to the foreign exchange earnings. The crop is the country’s fourth largest foreign exchange earner, after tobacco, sugar and tea. Tobacco contributes 60 percent of the country’s foreign revenue.
Figures from the 2017 Annual Government Economic Report indicate that the country produced 31 128 metric tonnes (MT) of cotton and is projected to earn $4.7 million in 2017, up from $3.9 million earned in 2016.
Experts in the sector have argued that the crop has huge economic potential and could rake in substantial amount of foreign exchange, in excess of $500 million (K306 billion) per annum, more than what the country gets from the main export crop tobacco.
Cotton has in the recent past faced a number challenges, key among which, was production volumes which has been on the decline during the past five years and fluctuating prices.
Last year, output for the crop dropped by a third to 15 000 MT relative to the previous year due to a dry spell. n