Cotton is a key export commodity in Mozambique

Cotton is a key export commodity in Mozambique and an important source of rural farm income and foreign exchange earnings. However, as a price taker on world cotton markets, the Mozambican cotton sector is particularly vulnerable to global market instability.
It was in this context that several institutions linked to the agricultural sector were involved in a technical two days seminar held by the Food and Agriculture Organization of the United Nations (FAO) within the project "Monitoring of Agricultural and Food Policies (MAFAP) in Africa". During the event were presented Cotton prices "and a" Comparative Analysis of the Competitiveness of the Cotton Sector in Mozambique "to produce a proposal to align its price in the country.

The seminar aimed at evaluating with the government possible strategies to establish the price of cotton in the country, was attended by technicians from the Cotton Institute of Mozambique and experts from the FAO area.

For the FAO specialist, Davide DelPrete, "preservation of the sector is important, particularly in the context of the current weak position, the world cotton price and the exchange rate are both important sources of this instability; hence, it is important to design effective interventions or support tools that mitigate the effects of such instability.

DelPrete also said that one such tool is the pricing mechanism which sets minimum cotton producer prices and another tool now being proposed is a price smoothing mechanism, which deserves serious consideration although such funds are complex to manage.

In conclusion, while issues related to cotton pricing and smoothing are important for the stability of the sector, they represent just one component of the cotton sector's revenues. Raising the productivity of producers and ginneries should ultimately remain a top priority for improving the competitiveness and profitability of the cotton sector in Mozambique in the long run.