MALAWI: Government supports cotton trade permit

Government through the Ministry of Agriculture and Food Security has directed that traders wishing to engage in the marketing of cotton should seek special trade permits but some private traders say the move is not in line with the country’s market liberalization and would disadvantage cotton farmers, especially those in rural areas. However, the Malawi Confederation of Chambers of Commerce and Industry (MCCCI) says the move would ensure order and proper structuring of the industry that is has the potential of diversifying the country’s economy. Secretary for agriculture, Patrick Kabambe says in a statement that all traders, organizations, companies seeking to export cotton seed and lint should seek permission from the Ministry in accordance with the Laws of Malawi.

The laws, which were enacted when the market was not liberalized, states that applications for permission to export the crop should be made to the Secretary for Agriculture and Food Security. The ministry says that each applicant would pay a fee of K5,000 to the licensing officer which would be refunded if a license has not been issued. “Applications for licenses to buy seed cotton should be made the Licensing Officer at the Ministry of Agriculture and Food Security headquarters starting from March 1,” the statement reads in part. But the move has not gone down well with some local merchants who say government is controlling the market.

“What will happen now is that there will be few buyers on the market and this will reduce competition,” said one of the local merchants.

He said it would be better for government to set a minimum price for the commodity but allow many players to enter the market.

“For the cotton industry to develop there is need for proper structures and this mechanism would ensure that the authority knows who is doing production and processing of cotton including the seed, so as private sector our stand is that this is the right step if there would be no restrictions,” said Kalua.

“Cotton has better trading prospects and we require an organized trading and Marketing System to achieve and increase in production and sales,” said Kalua.

The Cotton, textile and garments and manufacturing sectors have been identified as Malawi’s growth sectors where there is potential for significant expansion of current exports in the National Export Strategy.

Source: bharattextile.com