Cotton lint price set

lint for the 2011 marketing season.
Farmers will deliver their cotton at that price but licensed buyers are not restricted from paying higher prices.
Cotton growers will then be paid the differential grade prices by September 30 this year.
The price for A grade is US$1,05 per kilogramme, B grade US96c, C grade fetches US89c and D grade will attract a delivery price of US85c.
“Cotton growers shall be represented at each grading point by their appointed graders to ensure that grading is done properly,” said a statement by the Cotton Marketing and Technical Committee. “After receiving their grading results, farmers are free to appeal if they are not in agreement.”
The CMTC is comprised of cotton farmers, ginners, oil expressers, the clothing and textile industry and Government.
To facilitate accountability, ginners would be required to declare to the committee details of their monthly lint sales.
The minimum price is a huge increase compared to US30c paid last year.
This created serious problems as far- mers rejected the price offered by the merchants.
Apart from lucrative prices, farmers will also enjoy a share of profits that ginners would have made. The profit sharing will be on a 50-50 basis and will be payable by November 30, 2011.
The upside potential on prices could, however, be eclipsed by the crushing world lint prices. The world lint price – which determines local cotton producer prices – stood at US$1,70 per kg at the beginning of the year from US78c during the 2010 marketing season.
The figure has since declined to US$1,40 per kg.
Cotton prices may further drop as the International Cotton Advisory Committee has projected output to the tune of 27,4 million tonnes in 2011-12 to outstrip demand.
The CMTC said the prices agreed to by the stakeholders could be reviewed in line with changes in global lint prices.
“In the event of world lint market catastrophe, the parties will meet to review the position,” said the technical committee.
Agricultural analysts said the price would enhance the viability of the industry while discouraging farmers from side marketing.
This has previously seen some farmers, which, in the previous seasons have resulted in contractors losing huge tonnage of cotton to fly-by-night buyers.
“We are hoping for orderly marketing this season. The prices are attractive this will go a long way in discouraging farmers from side marketing,” said one agricultural analyst.
This year’s cotton output will be slightly below the initially projected 300 000 tonnes as some of the crop was affected by drought in the Lowveld region.