Cotton Prices To Rise By 25%

Players in the cotton sub-sector have projected a minimum 25 percent rise in cotton prices in the 2021-22 season owing to international market trends.

A Commodity Markets Outlook report for October published by the World Bank indicates that cotton prices maintained an upward trend from May 2020 to reach a 10- year record high in September.

The report says the overall price strength reflects gradual improvement in the outlook for global consumption, which is expected to average 25.9 mmt in the current season, 1 percent higher than in 2020-21 and marginally less than the 30-year average increase of 1.2 percent.

The outlook for consumption is a marked improvement over the previous season’s pandemic-related contraction of nearly 13 percent.

“On the supply side, global production is projected to increase by 6.4 percent, led by the world’s largest exporters Brazil and the United States. Cotton prices are expected to gain 5 percent in 2022, following a projected increase of 32 percent in 2021,” the report reads.

In an interview, Cotton Council of Malawi (CCM) Executive Director Cosmas Luwanda said they expected prices to reach K400 per kilogramme (kg) from the previous K320 per kg as was set in the just-ended season.

“The cotton industry has rebounded strongly after Covid; so we have discussed with ginners to go for contract arrangements with farmers in clubs with the hope that the buyers will support the growers with inputs thereby increasing production,” he said.

Agriculture expert Tamani Nkhono Mvula said the country has failed to address issues of high production cost that have undermined efforts to grow the sector over the years.

“For a farmer to be able to invest in cotton and yield from that, it has been very difficult despite that Admarc has managed to put up ginneries in all the districts and most of these ginneries are white elephants because there is not much cotton reaching these ginneries.

“Unless we address the production constraints and all issues the farmers are facing at the local level, we may not be able to benefit from all these projections,” Mvula said.

SOURCE: THE TIMES GROUP.