Cotton price up as buying season starts

Mwanza. Cotton price has increased from Sh700 per kilogramme last buying season to Sh750 as the new 2014/15 season starts.

Cotton stakeholders agreed on an indicative price for this season which commenced from June 18, 2014, to be pegged at Sh750 per kilogramme of the traditional product, saidMr Gabriel Mwalo, Acting Managing Director for Tanzania Cotton Board (TCB).

The stakeholders included cotton buyers through Tanzania Cotton Association (TCA), Tanzania Cotton Growers Association (TACOGA), Ministry of Agriculture, Food Security and Cooperatives and the Tanzania Cotton Board, he said.

“Cotton buyers are required to purchase above the indicative price only,” Mr Mwalo said.

The seasonal indicative price is put in place as a mechanism to prevent the farmers from incurring losses due to unscrupulous businessmen buying cotton at lower price if compared to the international market.

The process of getting an indicative price observed all criteria including current international price to protect benefits of both stakeholders who are mainly farmers and buyers of cotton, said Mr Mwalo.

The stakeholders also consider production costs related to the farmer, buying costs, transport, ginning, and contribution to cotton development fund (district municipal tax).

Cotton production for this season is estimated at 250,000 tones. The value of cotton exports declined from $164.4 million in the year ending April 2013 to $92.4 million this April, according to Bank of Tanzania monthly economic review.

Mwanza Regional Commissioner Everest Ndikilo launched the Cotton buying season for 2014/15, at Isole village, Sengerema District, last week.

The government as an overseer does not decide on the indicative price but rather the stakeholders (farmers & buyers) agree on their own and the government through TCB advices by issuing a notice in a bid to get a common stand that has mutual benefits for both parties.