The Cotton Farmers Association (Cofa) has expressed satisfaction with proposed cotton prices by ginners as farmers are entering into contracts with the buyers.
The cotton ginners are offering prices in the range of K400 to K490 per kilogramme (kg) for the 2022 selling season.
This represents a 53 percent jump in the prices when compared to the K320 per kg farm gate price that the government pegged for the commodity in the just ended season.
In an interview Cofa President Dickson Gundani said the prices were fair and farmers would make tangible profits.
“Competition among the ginners has played to our advantage, notwithstanding the high demand and increasing prices on the global market. All these years, these companies could not offer K400 for a kg but because one of them has offered K490 per kg, they have been forced raise their prices,” Gundani said.
Agricultural expert Leonard Chimwaza rated the direction taken by cotton ginning companies to engage seed cotton producers as ideal.
“However, there is need for the government and relevant stakeholders to push for institutionalisation of the contract farming regulatory framework. It is through this framework that proper regulatory measures on contract farming will be taken on board,” Chimwaza said.
Cotton Council of Malawi Executive Director Cosmas Luwanda said, though there are price disparities among the buyers, they will allow competition to determine how many farmers or volumes a company can contract for the season.
“It could be possible that farmers may flock to the one offering highest prices but they (farmers) also consider how much they will deposit for inputs; for example, those offering K490 per kg require a deposit of K30,000 per hectare while those offering K425 per kg require a deposit of K11,500.
“We will monitor all the agreements to ensure that the farmers are not exploited or dumped and we will arbitrate any disagreements that may rise. We understand that prices are also rising on the international market and we will be negotiating the prices with the buyers but the current offers are good because our calculations show that a farmer would break even at K317 per kg,” Luwanda said.