Union bargains for better cotton prices

Farmers Union of Malawi (FUM) says it is currently engaged in continuous talks with cotton ginners over better prices when the market opens later this month.
FUM director of agribusiness and marketing Jacob Nyirongo told Business News in Lilongwe that the union is using its gross margin analysis for cotton as a tool for bargaining for better prices.
Nyirongo said the analysis highlights how much resources a farmer spends to produce his cotton and considers a hector as a unit of measure.

“We are currently engaging all cotton ginners in the country and we are looking at how much we can mark up the price as a point of negotiation with our ginners, but it is promising to be a good year for our farmers,” said Nyirongo.
Last year, cotton prices on the local market averaged $0.52 cents (about K250), which according to Nyorongo, was “quite good.”
But he said FUM expects buyers to pay even more than last year’s prices considering the recent volatility of the kwacha and the overall high cost of production.
“We have seen circumstances where buyers have offered our farmers prices lower than the minimum prices and we hope we will not have such a trend this year, so we are in the process of negotiating for better prices with our ginners,” he said.
Commenting on the recent production trend, Nyirongo said in the 2011/12 season, the country produced 100 000 metric tonnes of cotton before output fell by half to 45 000 metric tonnes in 2012/13 season.
In the 2013/14 season, Nyirongo said production was almost static as the country produced about 46 000 metric tonnes of cotton.
“The major constraint is the yield per hector, which is low at around 600 kilogrammes [kg] per hector and in some instances our growers spray chemicals very late when the damage has already been done and this affects production,” he lamented.
Nyirongo said the union is assisting cotton growers by providing capacity building in the areas of extension services and is also providing linkages between cotton growers and service providers such as commercial companies in cotton and input suppliers.
A cotton expert Duncan Warren, who was a key member of the dissolved Cotton Development Trust (CDT), said yesterday that prices on the global market were yet to pick up “and were very depressed as of last month.”
Cotton, which has traditionally been Malawi’s fourth largest cash crop after tobacco, sugar cane and tea generates an estimated K5 billion annually.