Malawi cotton prices continue to dip
Cotton prices are in the mud and growers despite engaging in talks are still not satisfied with prices buyers are offering, arguing what has happened this year has frustrated most of them not to grow the crop next year.
Prices of the crop have, for some time now, been stuck at K90 (about $0.36) per kilogramme (kg) from K100 at the opening of the marketing season this year.
The Ministry of Agriculture and Food Security, after consultation with all players in the industry, put this year’s minimum prices at K78 per kg for grade A, which is K3 up from last year’s K75 per kg. Grade B has been pegged at K63 per kg, K7 down from last year’s K70 per kg.
Cotton growers are feeling the pinch of the drop in the global price of lint by 53 percent to $1.90 per kg from last year’s $4 per kg, according to the Cotton Development Association (CDA), a grouping of 10 local ginners.
The Cotton Farmers Association (Cofam), a representative body of all cotton farmers in Malawi, has said most of their members have been frustrated by the low prices buyers are offering.
“Most of the growers are disappointed. They see no future in the crop and they feel cheated by government,” said Steve Dodoma, a member of Cofam, who is also chairperson of Balaka Cotton Growers Association.
Buoyed by good prices last year that peaked at as high as K200 per kg, more than 200 000 cotton farmers have grown the crop largely propelled by a K1.6 billion fund set up by government in the 2011/12 season to generate about $300 million (K75 billion) in foreign exchange.
Dodoma said with the prevailing prices, in real sense the farmers are earning K30 only per kg with the rest being production cost.
He said most of the farmers have to repay loans they got from government and, already, most of them have incurred huge losses.
A long-time cotton grower from Chikhwawa, Alusi Jofilisi, said the prices the buyers are offering this year have already plunged most of their colleagues into poverty.
“We depend on the crop for our livelihood. As you know, most of the food crops do not do well in the district and this means that when the prices go down, we suffer,” said Jofilisi.
She called on government to intervene, saying cotton is the only crop they depend on for survival.
Earlier, experts had hoped that cotton prices would rise as the marketing season progressed based on the principle of demand and supply, but this has not happened.
Malawi cotton has been expensive on the global market, according to experts, and in 2009 when cotton prices plunged to the lowest levels, international buyers abandoned the country’s crop.
But the ginners assured that they have received orders from their international counterparts to buy all the cotton produced in the country.
The second-round crop estimates put cotton output at 244 154 tonnes, a 365 percent rise from last year’s 52 456 tonnes.
In 2012-13 season, the hectarage for cotton production is expected to increase to 250 000 from 236 269, according to the Ministry of Agriculture and Food Security.
