• June 25, 2022 11:48 pm

Lack of Structured markets killing Cotton Industry 

Mar 10, 2022

By Malawi Exclusive- Business Editor

Malawi cotton Industry is facing enormous challenges due to lack of structured marketing systems. 

This lack of Structured marketing systems is forcing Cotton farmers to sell their cotton to vendors therefore making no profit at all. 

This was revealed during the validation of Cotton by products workshop which was held in Lilongwe which the Ministry of Trade in conjunction with World Trade Organisation and International Trade Centre organised.

According to Research which an independent researcher Paul Tembo  conducted and disseminated on the workshop. 

According to the research, low market prices, lack of Structured markets, lack of planting materials high pest and disease infestation, labour is demanding
Lack of land and harsh government regulations have been fingured as some of bottle necks which needs to be dealt with if the Industry is to grow. 

The study has further shown that seed cotton production in Malawi has been
on the decline for a decade and hit its lowest point in 2021 since development of cotton by-products depends on the performance of the whole cotton ecosystem, as well as each specific
segment of the value chain.

“For example, if seed cotton production is low, it means that production of linters, cotton seed oil, and stalks will be low as well.” Said Tembo.

On recommendation to have cotton Industry proved the researcher has recommended for the creation of an improved regulatory framework to allow for a competitive cotton industry saying this will help to organise the markets since the seed cotton market is unstructured in Malawi at the moment. 

The researcher noted that the industry does not make use of digital technologies and is therefore difficult to monitor in terms of performance.

“There must be deliberate policies to structure it into one large commodity exchange market.”

Tembo said the current fragmented system depends on ginners declarations of
bought seed cotton, which is prone to under-declaration to reduce their levy remittances to Cotton Council of Malawi.

“Hence, CCM must adopt a digitalised market system that captures seed cotton and by-products sold on auction floors in real-time and collects levies on each sale.” He said. 

Participants during the workshop agreed with the findings saying there is indeed a great need to organise these markets structure them well avoid losses. 

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