Uncertainty over 2009 cotton prices

By Richard Chirombo
There is uncertainty over this year’s cotton prices, a development that threatens to kill the euphoria created over reports of improving production figures after decades of a downward spiral.
President Bingu wa Mutharika two weeks ago announbced new cotton prices, but ginners claim he did not consult them and would, therefore, not take heed of the new prices since their side was not heard in the price fixing process.
Cotton production and area coverage has been peaking up over the past two decades, though not fast enough to beat records set in the late 1070’s when good policies and prices combined to motivate Malawian farmers.
Industry and Trade Minister Henry Mussa announced last week that the country had touched the 77, 000 metric tones ceiling in cotton production in 2008, up from 62, 233 in 2008. In actual fact, the figure for 2008 was 76, 761 metric tones, pointing to improving prospects still.
This has created excitement among cotton farmers who think the changing fortunes could be replicated with attractive prices on the market. Last year’s prices averaged between K40 per kilogram to K60, while most farmers speculate that this year’s prices could start from the K60 per kilogram mark.
This was indicated in interviews with members of Malimidwe Aphindu Cotton Farmers Club from the area of Traditional Authority Karonga in Salima, who said last Saturday they were up beat that things would to pick up from last year’s ground prices.
Chairperson for the group, Fineas Chilipa Phiri said, however, they wanted government to come out in the open on this year’s prices so that they could have to strategise over marketing opportunities.
“We would expect the Ministry of Agriculture and Food Security to come out in the open over what they have planned for us (cotton farmers) this season, in terms of prices. If government can not fix prices for cotton, as is the case with tobacco, at least they should give us some indication on what we should expect on the market. This helps us to plan properly on issues like transport, so that we do not incur more costs than we can realize at the market,” said Chilipa Phiri.
However, he will have to wait a little longer for any such move following delays by the Ministry of Agriculture and Food Security to meet the country’s major cotton buyers or ginners. The two parties have often met before the opening of the cotton market to strategise on prices as well as review such issues as that year’s production, though the long-awaited for meeting is long coming this year.
Through the cotton ginners representative body, Cotton Development Association of Malawi- which has such members as Iponga Cotton, Great Lakes Company, Nadhi Cotton, Toleza, Malawi Cotton Company and Cargill- the cotton buyers are able to liaise with the ministry on various crucial issues pertaining to the crop many tout as the possible replacement to tobacco.
The ginners, have, however been kept in suspense over the actual dates for the meeting, a development that threatens market prospects for the crop, apart from frustrating hopeful farmers.
Principal Secretary for Agriculture and Food Security, Andrew Daudi, kept a tight lid on the specific date for the much-awaited meeting, only saying “it will be organized very soon”.
Daudi could not be drawn to mention the specific date, as time was fast running out for most farmers to plan, maintaining it would be held very soon.
“We will meet them (the ginners) very soon; there is no need to worry over that. Tell them the meeting is on very soon,” said Daudi.
Malawi seems to be reeling up from a myriad of threats that include very low productivity, declining quality, low ginnery capacity utilization and uncoordinated synthetic fabrics, according to Mussa and Daudi, who saw good prospects for improvements in production and area- now that government had put in place a specific project aimed at resuscitating the sector.
Adverse state interventions in the market and unattractive market prices are said to have brought the industry tumbling down.
“We will rise up from this situation and become a star performer again,” said Mussa.