Maputo, 15 May (AIM) – The Mozambican government is assessing new investors who can continue cotton production in areas that used to be operated by the British company Plexus in the northern provinces of Nampula and Cabo Delgado.
Plexus closed its Mozambican operations last December, supposedly because of financial difficulties. Based in the Cabo Delgado district of Montepuez, it was the only company purchasing raw cotton from Cabo Delgado producers, and one of the largest cotton companies in the country.
The decision by Plexus to pull out threatens to ruin cotton production in Cabo Delgado, if no new investors are found to step into its shoes.
Cited in Monday’s issue of the Maputo daily “Noticias”, Agriculture Minister Celso Correia guaranteed that the government continues to regard cotton production as strategic, both for generating income for many rural households, and for exports.
He said that over the past three years, the government has faced many challenges in the cotton sector, including abandonment of production and companies that were the victims of mismanagement.
Cotton production was falling sharply – from 45,800 tonnes in the 2020-2021 agricultural year to 20,000 tonnes last year.
Correia said this fall showed there is a serious risk for the continued existence of commercial cotton production in Mozambique. “That’s why the government is working to find a new investor”, he stressed. “We gave Plexus many opportunities, all to safeguard the cotton producers in the area where it was operating.
Plexus is in such serious financial difficulties that it cannot even pay wages. By January this year it owed ten months back wages to more than 300 workers.
Last week, the government mediated in negotiations between the cotton companies and the cotton farmers. There are about 142,000 farmers growing cotton, and five companies have concessions to purchase the cotton.
The meeting agreed a minimum producer price for raw cotton of 33 meticais (about 52 US cents) a kilo, which is the same price as last year. That is a subsidy of six meticais per kilo, which the government regarded as essential to safeguard the farmers’ incomes.