Cotton farmers in Tanzania are likely to suffer more losses following endless price fluctuations resulting from by surplus production of the crop in the world market.
Speaking yesterday on a phone interview, Tanzania Cotton Board (TCB) Managing Director Marco Mtunga said the ups and downs of the price are a result of world market dynamics characterized by supply and demand.
“We at the TCB are not to because we do not control the world market. The widely seen dramatic drop of cotton price in the country is a result of supply and demand currently characterising this business,” he said.
The Managing Director said that projected cotton production for the coming season stands at 27million tonnes in additional to current stocks of about 13 million tonnes. With the current consumption only standing at 23 million tonnes annually, it is difficult to tell when the price of the crop will eventually stabilise.
Statistics show that, with the current cotton stock of 13 million tonnes, at the current consumption rate, the world would need only 10 million in the coming year.
This means that next year the world would have 17 million tonnes in stock, 30 percent higher than the present stock of 13million tonnes. TCB boss further explained that only 30 percent of the country’s cotton produced is sold internally, while the rest is exported. This would, consequently, affect a big number of the farmers, he said.
According to Mtunga, with such a big fluctuation, the farmers and other stakeholders in the sub sector, have unnecessarily harboured fears among themselves on the price while the board has not yet set the crop purchase price.
Legislators from the cotton growing regions rallying behind their farmers, have proposed that the new purchase price for the crop should not be less than 1000/- per kg.
“Last year cotton price per kg in the world market stood at USD1.45 which enabled our farmers to sell their cotton at 1100/-. However, the sudden drop of price to USD0.83 cents has done a big blow to the farmers and that is why you hear lots of cries now,” Mtunga said.
Commenting on the cries for crop subsidy, Mtunga said: “It is upon the government to subsidise the crop and actually we welcome the move but my worries are on what would happen to the farmers of other crops.”
According to him, cotton farmers do not currently benefit from the crop due to the low productivity of 300kg per ha on average,’ he said
Subsequently, even if they would sell a kg at 1000/-, still they would reap as little as 300,000/-.
Therefore he said: “More efforts need to be undertaken to ensure that farmers can at least produce 1000 kg of cotton per ha.
This can be done by ensuring that there is availability of certified seeds capable of producing high yields. He revealed that, the current seeds demand in the country is 15,000 tonnes, “yet we only produce 8000 tonnes, which has resulted in about half of the farmers continuing to use old fashioned seeds.”
Recently, Tanzania Cotton Growers Association (TAGOA) chairperson, Elias Zinzi told this paper that: “If the government fails to issue a stand on subsidising the farmers, they are likely to give up their support on the sector.” Zinzi further noted that since cotton farmers constitute 40 percent of the country’s population, if they fail to have assured income, it would be hard for the government administer them.
Meanwhile, in our June 18, 2012 edition we inadvertently referred to Dr Joe Kabisa as the Director General of TCB and as having predicted a 28 per cent fall in cotton output this season.
The truth is that Dr Kabisa was the former Director General of TCB and he retired three years ago. We regret for any inconveniences caused by the publication