THE 2012/2013 cotton buying season is reportedly picking up gradually, with producers opting to supply at the previously disputed price of 660/- per kilogramme of seed cotton.
The crop buying season opened some two weeks ago, having been delayed for almost a month due to price disputes between buyers, growers and Tanzania Cotton Board (TCB), the industry regulator, as buyers offered 450/- and producers vowed never to supply at below 1,000/-.
Prolonged negotiations led to the wrangling parties to settle for the 660/- price, with the district councils forced to reduce cotton levy from five to two per cent of the buying price. TCB Acting Director General Gabriel Mwalo told the 'Daily News' in Dar es Salaam yesterday that the crop buying is going on well, urging farmers to sell their produce now as there are little prospects of price appreciation.
"It's better for farmers to sell their produce now that the price is 660/- because I don't see prospects of the prices going up," Mr Mwalo said. Reports from the lake zone where cotton is mainly produced have it that many cotton buyers remain inactive due to financial constraints.
"Many commercial banks have been reluctant to issue loans to buyers because they (banks) perceive the 660/- price as unrealistic with the prevailing world market prices," an official with Mwanza-based ginner said in a phone interview from the lakeside city. Although some politicians from the cotton producing areas had earlier advised their voters against selling cotton unless they get the 1,000/- price, desperate producers were allegedly selling the cash crop to black market buyers at 300/- per kilogramme.
"The delayed crop buying season subjected cotton growers to sheer desperation, with some bowing to temptations by exploitative middlemen to sell the crop at 300/-," the official said, noting that most of cotton growers rely on earnings from cotton sales to buy food.
Members of Parliament from the cotton growing areas, debating the 2012/2013 national budget estimates in Dodoma last month, stood firm against cotton farmers selling the cash crop cheaply, urging producers instead to keep the produce, pending price appreciation. The MPs described the cotton sector, which supports over 16 million people in the country's 42 districts, as highly sensitive and deserving specialised attention. They proposed construction of cotton processing factories to boost local demand of the country's white gold.