By Kingsley Jassi:
National cotton sales have closed with a recorded market supply deficit of 99 percent, The Business Times has learned.
The country’s installed ginning capacity requires over 400,000 metric tonnes (mt).
Yet, according to the Cotton Council of Malawi (CCM), farmers only supplied 4, 000mt this year.
The commodity attracted a minimum of K1,500 per kilogramme (kg), which is higher than the K1,200 per kg for last year.
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This makes the strategic commodity—which once reached over 200,000 tonnes in output and $62 million in export proceeds in 2012—a forex headache as textile companies and seed companies have to make heavy imports for local industry requirements.
Cotton Farmers Association (Cofa) Executive Secretary Snowden Mbalafana cited constrained access to seed as the major issue affecting the industry.
“We have had improving prices from four years ago, increasing from around K500 to this year’s K1500 per kilogramme, but the issue is the cost of production, especially for seed. Last season, farmers could only get supplies as late as February,” said Mbalafana.
He said, at K80,000 per kg for imported cotton seed, most farmers struggle to buy as supplies usually come late after most farmers have spent their income on other necessities.
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However, he disclosed that some local banks were being engaged to offer input loans with prospects of a K10 billion financing window being considered to support the farmers.
CCM Executive Director Apatsa Selemani confirmed engaging industry players and financial institutions to address the seed challenges as the industry grapples with the strategic target of 100,000mt of cotton output by the 2027- 28 season.
“We just met industry players this week because we are working on local seed multiplication [initiatives] to address challenges with imported seed, which requires forex,” he said.
Last year, supply constraints culminated in industry players working with just 41mt of cotton seed, hence the low output.
Now, the target is to increase local seed supply through multiplication efforts, targeting 600mt of local seed supplies next season.of Malawi’s gross domestic product and employs more than 80 percent of the population.
