MINIMUM PRICE FOR COTTON DECLINES

The Mozambican government, cotton farmers, and the concessionary companies who purchase their cotton have reached agreement on the minimum price for this year’s harvest – which is nine per cent lower than last year’s price.Under the agreement, reached at a tripartite meeting held on Friday in the town of Montepuez, in the northern province of Cabo Delgado, the companies will pay the producers 10.25 meticais (about 30 US cents) per kilo of first grade cotton, and nine meticais a kilo for second grade.In 2013 the minimum price for first grade cotton was 11.25 meticais a kilo. According to Norberto Mahalambe, director of the Mozambican Cotton Institute (IAM), this fall is due to the decline in cotton prices on the world market. Cited in Monday’s issue of the Maputo daily “Noticias”, Mahalambe said the new prices were reached after “intensive discussions” between the three sides.For his part, Jose Domingos, chairperson of the National Forum of Cotton Producers (FONPA), stressed that farmers are aware of how dependent cotton prices are on the international market. This was “an inescapable reality, and unfortunately we are used to it”.“There was serious work in the negotiations, but since the price on the international market has fallen, we end up losing”, he said. But Domingos pointed out that 10.25 meticais a kilo was only the statutory minimum, and there is nothing to stop buyers from paying more. Francisco Ferreira dos Santos, of the Mozambican Cotton Association, which represents the companies, said there are no grounds for alarm. The international prices of cotton go up and down, he said, and next year there might be a price recovery. “Two years ago, cotton cost 15 meticais a kilo”, he pointed out.Both Domingos and dos Santos were optimistic that the fall in the producer price would not have a serious impact on cotton production. They did not believe that cotton farmers would react by switching to other crops.Some of the district administrators attending the meeting were less confident. Domingos Viola, administrator of Doa district in Tete province, and Manuel Cabral Bramo, administrator of Cuamba, in Niassa, warned that the agreement could drive peasant farmers out of cotton. They both predicted a decline in the number of cotton producers in the next season.