adminCotton companies have agreed to pay cotton farmers an increase of 26,8 percent for their raw cotton in the 2015-16 agricultural campaign. The price in the 2014-15 campaign was 10,25 meticais (about 24 US cents at current exchange rates) per kilo for first grade cotton, and nine meticais a kilo for the second grade. According to a report on the independent television station STV, negotiations in the central city of Quelimane between the government, the producers and the companies led to an agreed price for the coming campaign of 13 meticais a kilo.
The chairperson of the Mozambican Cotton Association, the body which represents the companies that buy cotton from the farmers, Francisco Ferreira dos Santos, admitted that they can afford to pay this increase because of the depreciation of the national currency, the metical. The cotton is sold on international markets in dollars, and the companies can change those dollars into many more meticais than was the case last year.
“For companies who are importing merchandise, the exchange rate is damaging”, said dos Santos, “but for us, who are exporting, it is beneficial”.
13 meticais a kilo is the minimum producer price, but there is nothing to prevent companies from paying more, and some companies have already promised to pay farmers between 14 and 15 meticais a kilo.
The higher prices could put the brakes on the drift away from cotton. Last year there was a trend, notably in the Zambezia district of Morrumbala, for farmers to switch from cotton to sesame and beans.
Norberto Mahalambe, the director of the government’s National Cotton Institute (IAM), admitted that the last campaign was poor, producing 20 000 tonnes of raw cotton less than the target. That meant US$12 million less in revenue than had been hoped.
Mahalambe hoped that the coming campaign would change this scenario, and would see production of at least 70 000 tonnes of raw cotton. – AIM.
Online Reporter