NAIROBI, Kenya, Apr 12 – Cotton farmers are gearing themselves for higher returns as the Cotton Development Authority (CODA) has set a new fixed price for the commodity.
CODA has raised the price per kilo from a fluctuating average of between Sh21 and Sh25 to Sh32 effective from April this year.
Following a consultative meeting with industry stakeholders and the Ministry of Agriculture, the regulator said that spinners would also buy cotton lint at Sh11 per kilogram.
A statement from the Ministry of Agriculture indicated that farmers would also not be charged transportation costs, as ginners will get cotton in bulk at various buying centers.
The price fix comes after pleas by players in the sector to regulate the price of cotton.
The sector has come under renewed pressure due to the importation of cheaper second hand clothes and increased preference of foreign made garments.
This has lead to the closure of a number of textile companies. Since 2006, at least 41 have closed shop leading to over 400,000 job losses.
Prime Minister Raila Odinga has in the past indicated that plans to cushion the sector from the ravages of economic woes may soon be unveiled to ensure that the industry resumed vibrancy.
He said some of the measures to be put in place include offers on subsidies and tax waivers for investors. The Ministry of Agriculture has also been given the green light to intervene should players fail to meet the new rules.
Cotton ginners have also been urged to modernise their machinery to enhance efficiency and reap maximum benefits.