Cotton farmers paid
The Cotton Company of Zimbabwe (Cottco), the country’s largest cotton financier, has paid farmers US$19,6 million and $7,2 billion with outstanding dues expected to be cleared by March 31.
In a trading update from September 1, 2023 to January 31, company secretary, Ms Eunice Mupanduki, said liquidity in the local economy remained constrained, with Cottco unable to draw down to the full extent of available facilities, despite having adequate security.
“The company was, however, able to settle US$19,6 million (83 percent) and $7,2billion (18 percent) of the farmer payments dues in the respective currencies with outstanding dues expected to be cleared from product receipts by 31 March 2024,” she said.
On business performance, Ms Mupanduki noted that the final intake figures for the 2023 cotton buying season stood at 69,419 metric tonnes, which was a 48 percent increase from the 46,748 metric tonnes achieved in 2022.
Zimbabwe’s cotton season runs from September and includes a growing phase from around October to December, a harvesting and sales period from May to August.
“To date 58,326mt (84 percent ) of seed cotton has been ginned with only 1,066mt (two percent) having been toll ginned in the Lowveld due to the high volumes in that area. Local and offshore lint customer collections are still underway with 7,776mt of lint in stock. Ginned seed on hand is 4,642mt and upliftment by seed suppliers and oil expressors is underway.
“475mt of lint has been converted to yarn since April 1 2023 to date.”
Erratic power supplies in the last quarter of 2023 delayed the completion of ginning, she said.
Financially, in US dollar terms, the company is projected to break even for the year ended March 31, 2024.
This, she said, comes on the back of improved cost management through the measures being implemented.
She further noted that following the promulgation of Statutory Instrument 156 of 2023, shareholders are advised that Government’s 37,1 percent shareholding in Cottco Holdings Limited, previously held in the name of Ministry of Finance and Economic Development is now held through Mutapa Investment Fund.
The Government, through Cottco, is the major financier of cotton production in the country.
Under the Presidential Free Inputs S cheme, Cottco supports nearly 300 000 households, thus making the scheme important for the poor and marginalised families.
At peak, Zimbabwe produced 351 000 tonnes of cotton in the 2010/11 season and the Government has since set a target to raise production to 300 000 tonnes by 2025. Zimbabwe mainly uses open-pollinated varieties (OPVs) but indications are that production could go up to as much as 600 000 tonnes with the use of hybrid seeds.
Experts are urging the Government to ramp up the use of hybrid seeds to boost productivity and cut the risk of crop failures as OPVs are getting more susceptible to diseases.chronicle
