Cotton farmers have expressed hope with the improved prices being offered by ginners in the 2019 Marketing Season.
At K420 per kilogramme (kg), the price is K45 more than the K375 per kg approved minimum price offered in the past two seasons.
The price is also K120 more than what some unscrupulous traders were offering to vulnerable farmers before the marketing season started in in April.
Cotton Farmers Association of Malawi president George Nnesa said in an interview on Friday the improved price gives impetus to farmers to grow more cotton next season.
“The price also gives us room to improve our livelihood as the profits accrued from the cotton sales will directly impact on our household incomes,” he said.
In a separate interview, African Institute of Corporate Citizenship (Aicc) chief executive officer Felix Lombe said at the current price, farmers are guaranteed of improved profitability this season, observing that the production cost of one kg of cotton ranges between K220 and K250.
“Cotton is one of the valued chain with competitive market and now with five ginners, there should indeed be competition as the produced crop is less the demanded 100 000 metric tonnes [MT] for the country.
“So, the improved prices are coming on the back of ginners hoping that there could be more supplies this season,” he said.
In February 2018, a position paper on cotton production produced by Aicc highlighted that the cotton industry in Malawi was in recession with key players such as farmers, ginners, suppliers and banks owing each other close to $1 billion (about K738 billion).
It stated that the decline in cotton output to less than 10 000MT in the 2016/17 growing year had resulted into a loss of foreign exchange in excess of $60 million (about K44 billion) further shrinking economic activities within the sector and reduction in employment levels.
Cotton Council of Malawi executive director Cosmas Luwanda said at the start of sales markets will remain open for the next 90 days and advised farmers to sell the crop at designated markets.
Cotton contribution to the country’s gross domestic product (GDP) hovers around one percent, according to Aicc.