Import of clothes to continue until the cotton industry is revamped

One of the key reasons Zambia has continued to import clothes and needlessly lose foreign exchange is due to the challenges that the cotton industry continues to face as well the continued reduction in production of the crop for over seven years now.

Ministry of Agriculture Director Moses Mwale said the production of cotton has been declining over the past years from about 260,000 metric tonnes in 2012 to about 41,000 metric tonnes in 2020, adding that the cotton industry’s performance has been below par when compared to other African countries.

Mwale said the poor performance of the cotton sub-sector can be attributed to gaps in the current legislation such as the lack of oversight over the entire cotton value chain, therefore the need to revise the Cotton Act in order to protect local farmers.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Mwale said the challenges in the cotton industry can be unlocked by enhancing policy and legislation, which is weak therefore the need to amend the Cotton Act in order to safeguard the industry.

He said the amendment of the Cotton Act is expected to revive the cotton industry and finalising the review of the Act will ensure the legislation responds to the demands of the industry players, most especially the farmers.

He also said the amendment of the Act will lead to the desired increase in production and productivity, exports and foreign earnings as well as job creation. Mwale further said the ministry is yet to have a stakeholders meeting which will address the many issues that are affecting the cotton sector such as how to handle the seed, business linkages and the ginneries.

Mwale said the ministry has set up a task force, which is specifically working on the process of amending the Cotton Act and has set up terms of reference for the task force, which will be discussed in the upcoming stakeholder meeting. He mentioned that government is looking at making a number of reforms in the agriculture sector and has plans of amending a number of Acts.

Zambia is currently a net importer of clothes and apparel when the country has suitable soils and weather conditions to grow Cotton. Cotton can then be processed for both local use and exports cutting off the need for imports.

Analysts say there is a need for the country to re-align its business mindset. The Kwacha is perpetually depreciating due to a default to importing even for items that can be locally produced and processed, and clothing and apparel one basic need that can contribute to import substitution.

One of the key reasons Zambia has

Tiger feeds refutes claims of exploiting poultry farmers

Copperbelt based poultry farmers complained of being exploited by animal feed companies which have taken advantage of the shortage of chicks.

The animal feed manufacturing companies had started asking poultry farmers to buy all the feed required to grow chickens to the recommended size at once when placing an order for the day old chicks, a situation that resulted in further stress for the affected farmers.

One Copperbelt based farmer based in Luanshya told the Zambian Business Times – ZBT that this practice was never the case in the past as poultry farmers were allowed to buy a particular feed that is needed at a particular stage and then later buy the other required feed when needed.

When ZBT contacted one of the feed companies, Tiger Animal Feeds, which has been accused of allowing its sales agents and stores on the Copperbelt to demand full payment for both chicks and feed to grow the chicks to maturity, the company refuted claims stating that if it’s being done, it’s not with the blessings of the company.

Company Sales Manager Priscilla Bafana said customers are allowed to buy the feed in bits but they should make sure the money is available so that when the feed finishes, they are ready to buy the other one, which is required for the next stage of growth.

Speaking in an exclusive interview with ZBT, Bafana said customers are advised to make sure money for the whole feed range needed to grow the chickens to the required size is available in order to avoid a situation where farmers fail to buy feed at a particular stage of growing the chickens.

Bafana mentioned that this does not mean that poultry farmers should buy all the feed required at once, but should ensure that money is readily available to buy the feed required at every stage.

She said affected customers who have been made or forced to buy all the feed at once when they are not ready should report specific individuals or sales representatives who are asking them to buy the whole feed at once, as that is not acceptable by the company.

She said the company only guides its customers on how to go about using their feed but they can buy the feed whenever they need it. Sales agency’s or representative are not allowed to demand the purchase for all the feed range at once.

Day old chicks shortage had emerged in some parts of the country resulting in some sales agencies and sales outlets now taking advantage of the shortage to sale their other stock feed ranges and supplies

Copperbelt based poultry farmers complained of being

Lifting ban on cooking oil imports wont reduce prices

The Crushers and Edible Oil Refiners Association (CEDORA) has disclosed that calls for lifting the ban on the importation of refined cooking oils are misguided and will not result in the reduction of the retail prices of cooking oil in the country.

Association Director Aubrey Chibumba said the cooking oil prices in the country are cheaper than the prices in South Africa where importers would be buying it, so the association does not see how traders will be able to sell it at a cheaper price in Zambia.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Chibumba said lifting the ban on cooking oil importation would only bring about rampant smuggling of the commodity, under declaring and not paying the right duties and taxes to government as that is the only way importers would be able to sell it at a cheaper price.

Chibumba said only those that have such an “advantage” would benefit from lifting the ban on the importation of edible oils but soya bean farmers and the entire edible oils value chain would bear the cost as the price of soya beans in the country would collapse.

He said the importers would have no impact if they do things the right way because cooking oil in Zambia is cheaper than it is in South Africa, which is the source market for most imports. so it is not possible for them to import the oil using the right channel, landing and selling it at a cheaper price.

“There are over 100,000 local farmers growing soya beans, and about 700,000 Zambians currently deriving their livelihood from the Soya value chain. But when you compare this to the traders, you need to ask yourself: who exactly are these traders? who are they and how many are they? are they even Zambians, do they pay taxes and have employees?, so who get the benefit when you import refined cooking oil and then the local soya bean price drops, who are you impacting the most”, Chibumba questioned.

Chibumba said 95% of the edible oils consumed in Zambia are produced by the association’s members and the ban on the importation of cooking oil has not affected the price of cooking oil at all. He attributed the current increase in prices to the depreciation of the Kwacha as crude palm oil imports have had to take the increase in prices.

He revealed that two thirds of the edible oil that the country consumes is currently imported as crude palm oil because Zambia does not produce enough oil seed despite having excess crushing capacity, which can process about two thirds of annual edible oil consumption.

He also said that Zambia has refinery capacity of twice the country’s annual consumption adding that Zambia has excess capacity but oil seed cultivation has not expanded to that level yet.

CEDORA’s Chibumba further stated that as the country increase oil seed cultivation and production, crude palm oil has to be imported, otherwise there won’t be enough cooking oil to meet the demand for the country.

Chibumba said the international price of crude palm oil, which is the main oil that is imported increased from about US$750 this time last year to about US$1,300 and the kwacha devaluation from about K14 per 1 US dollar to the current about K22 per 1 IS dollar has greatly affected the cooking oil prices. The increase in commodity prices is a global phenomenon that has spilled over to other commodities as well.

He added that the exchange rate and the high interest rates are factors that affect the prices of commodities domestically. Chibumba told ZBT that looking at these two factors, prices should have gone up by about 83% but they have only gone up by 53%. The local edible oil producers have shouldered some of the cost as sales volumes have dropped so much as people are finding the retail product expensive.

“If we try to push prices too high, demand will drop even further and it will put us in a difficult situation. The retail price of cooking oil in our shops is lower than the retail price in South Africa, so when you traders are saying this ban has led to the increase in prices, then why is our cooking oil cheaper here”, he asked.

He also noted that the ban on the importation of edible oils was effected in 2017 but cooking oil prices remained stable until last year when prices started going up. When you check this timeline, it is the same time that the country experienced rapid depreciation of the Kwacha, which is a clear indication that the ban has nothing to do with the high prices.

Chibumba explained that the producers of edible oils in Zambia are not causing the problem, as they have no control over the exchange rate and international commodity prices. He however agreed that increasing local production of seed oils like soya beans and sunflower would result in massive benefits for the economy.

We need to make sure that local soya or seed oil prices don’t collapse as farmers will abandon growing the crop. Zambia is capable of growing enough soya to feed the entire capacity for edible oil crushers and producers and even export to neighboring countries, but there is need for policy consistency to sustain year on year increase in Soya production.

The Crushers and Edible Oil Refiners Association