cottonn.jpgCotton farmers and contractors have begun negotiations to formulate a viable price for lint this season.

 

With at least two months to go before the traditional kick off of the cotton marketing season, growers through their respective farmers unions and contractors under the Cotton Ginners Association have begun dialogue to produce a pricing structure for this year’s crop.

Since the majority of the cotton crop is grown under contract, farmers and their contractors have to reach a consensus on the best price which is subject to the approval of the Agriculture and Marketing Authority.

“At the moment we are still negotiating. We (farmers) use a cost of production model while ginners have a ginning model where they take the price from the Liverpool market and subtract ginning costs,” said one farmer.

Although there were disagreements over pricing in the sector last year between farmers and buyers of the crop there is reason for optimism this season due to firming prices on the international market which have risen above US$1.50 per kilogramme this year.

The prices were strengthened by adverse weather conditions which affected major cotton producing countries such as India, Pakistan and China as well as rising demand.

Local cotton production this year is expected to reach 300 000 kilogrammes due to increasing confidence in the industry following the promulgation of Statutory Instrument 142 of 2010 which prohibits side marketing of the crop.