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2 ginners bow out of cotton market

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Leonard Chimwaza

Two cotton buying companies, Chartia Textiles Limited and Millennium Farms Limited, have been relieved of their obligations to buy over 7,000 metric tonnes of seed cotton from farmers this season after failing to secure enough finances for the exercise.

Both the Cotton Farmers Association (Cofa) and the Cotton Council of Malawi (CCM) have confirmed.

The board of the council recommended that a stakeholders’ meeting be held to review the current stand-off with the aim of bringing tangible solutions.

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Business Times has established that four ginners were called to the meeting which took place on Tuesday in Blantyre where it was established that Millennium Farms Limited has not started buying seed cotton from the farmers while Chartia Textiles started buying seed cotton from farmers but could not manage to reach to all its contracted farmers.

Apparently, Millennium Farms Limited was looking for financing from some commercial banks but was not successful as it does not possess any ginnery facility which was crucial for collateral purposes.

The company was therefore eyeing a partnership with the Agricultural Development and Marketing Corporation (Admarc) to use its idle ginneries to secure the funding, which has not been completed to date.

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Similarly, Chartia Textiles engaged Admarc as sole provider of ginning services, hence being able to engage some of its farmers.

In an interview on Tuesday, Cofa president Dickson Gundani said, during the meeting, it transpired that the two companies will not be able to buy cotton from farmers and the obligation has been transferred to Malawi Cotton Company Limited and Afrisian Limited.

“Malawi Cotton and Afrasian have been given up to Friday this week to start buying seed cotton. We are just happy that, long at last, we will sell the cotton. Farmers have been keeping the seed cotton for over two months as the ginners were not available to buy. This affected the cotton farmers socio-economically,” Gundani said.

Some of the districts affected by the failure by the two ginners to start buying seed cotton include Karonga, Nsanje and Chikwawa.

CCM Executive Director Cosmas Luwanda said they resolved during the meeting that other ginners will be deployed to areas where the two were supposed to buy seed cotton until they gain financial ground.

“We are developing modalities to help the other companies recover what they invested when they entered contracts with these farmers to prepare and produce this cotton,” Luwanda said.

Managing Director for Millennium Farms Limited Joseph Odala said the development means the company will lose over K500 million it invested but will not lose hope and will stay in the cotton sector.

“In the spirit of brotherhood; we would rather lose out otherwise, we have done a lot of commitments. We are running a K500 million investment that might be put to waste because we supported these farmers with inputs, we moved around to mobilise the farmers and we will not be rewarded for that effort but we are saying we understand the situation it’s nothing wrong with them but everything wrong with us so let them go ahead,” Odala said.

Agriculture expert Leonard Chimwaza said the development will negatively affect the market in that there will be no competition, which will stagnate cotton prices.

Prices of cotton picked up by 25 percent in the first two weeks of the crops marketing season to K500 per kilogramme (kg) from the government set K400 per kg recorded at the opening of the market.

Cotton is one of the country’s cash crops, which has been overly undermined by low production and unstable markets.

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