Zambia grapples with cotton industry volatility

Price volatility has pushed out thousands of smallholder cotton growers, says the Cotton Board of Zambia (CBZ).

According to CBZ, pricing remained a major issue since 2011 when global markets experienced a spike in lint prices.

“Lack of a predictable pricing model has contributed to the decrease in the number of farmers venturing into the cotton industry,” said CBZ board chairperson Catherine Mungomba.

Zambia’s annual cotton production is between 100 000 and 200 000 tons. Production is driven mainly by more than 200 000 smallholder producers engaged in various out-grower schemes. The sector relies on input pre-financing schemes operated by out-grower and ginning companies who buy the crop and deduct the value of the inputs from the money payable to the farmer.

Mungomba said Zambia is among the few African countries who lagged in adopting a pricing model that is tailored to understand global trends in the cotton industry.

She said her organisation sought the services of an international expert in cotton pricing to help make the industry more attractive for producers.

“The pricing of cotton is influenced by prevailing international cotton lint prices and a pricing model that helps farmers understand market trends will make cotton production profitable,” she said.

The country’s cotton production has experienced fluctuations in production over the last few years. In 2013/’14, production dropped to 95 000 tons from 102. The following year it increased to 130 000. This year has also seen a marginal increase with prices rising to K3.70/kg compared to last season’s K3.20.

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