Cottco pays out US$15,9m to farmers Cotton Company of Zimbabwe

Nqobile Bhebhe, [email protected]

THE Cotton Company of Zimbabwe (Cottco), the country’s biggest cotton firm paid out US$15,9 million to farmers in the period between July last year and August 2023 with funding having been unlocked as the season progressed and the sector is now gearing up for the 2023/2024 season.

The outstanding payments are expected to be cleared by this month as market liquidity improves as revenues from the sale of products are received, Company Secretary, Ms Eunice Mupanduki has said.

Cotton is one of the country’s major agricultural export commodities and is largely grown by smallholder farmers supported under the Presidential Free Inputs Scheme.

The company accounts for about 85 percent of the country’s cotton production.

In a trading update from 1 July 2022 to 31 August 2023, Ms Mupanduki said, “As the buying season draws to an end, the Company has achieved a 48 percent increase in intake from 46,748 metric tonnes in 2022 to 69,146 metric tonnes in the current season.

“Cottco has paid US$15,9 million to farmers to date and the remaining 32 percent is expected to be cleared in the month of September 2023 as market liquidity improves.”

Ms Mupanduki noted that as the buying season draws to an end, the firm has achieved a 48 percent increase in intake from 46,748 metric tonnes in 2022 to 69,146 metric tonnes in the current season.

The company’s order book continues to surpass available supply Cottco’s value addition initiative has seen the company converting over 800 tonnes of lint to yarn for the local market.

In the period under review, the firm said local market liquidity was extremely tight with Cottco initially struggling to access funding from approved facilities.

However, funding was unlocked as the season progressed and is expected to improve as revenues from the sale of product are received.

The update notes that, farmer morale improved following the 2021/2022 buying season where they were paid 75 percent in United States dollars and interest to grow the crop was rekindled resulting in 360,224 farmers being registered as compared to 294,202 growers in the previous season.

On outlook, Ms Mupanduki said with the intake season coming to a close the entity is now focused on crop establishment for the 2023/2024 season.

To that end, suppliers for the Presidential Inputs for Cotton Programme have commenced delivery of fertilisers for distribution to farmers which will be helpful in early crop establishment given the forecast of El Nino weather patterns for the forthcoming season.

The Meteorological Services Department has predicted possible erratic and low rainfall patterns this year prompted by El Nino conditions which will affect Southern Africa as a result of climate change.

Precipitation from December to March, during the height of the rainy season, is likely to be below average, negatively impacting the 2023/24 agricultural season.

El Nino is part of the natural climate phenomenon called the El Nino Southern Oscillation (ENSO), where warmer winds are blown to the southern hemisphere pushing rains further upwards to the northern hemisphere leaving high temperatures locally.

The actual assessment will be made very soon before the start of the season after regional meteorologists have made their best predictions for the coming season.

Running for the eighth straight season, the State-assisted scheme has seen cotton production recovering.

Nearly 350 000 farmers were contracted to grow cotton under the Presidential Inputs Scheme last year and planted about 250 000 hectares. Apart from free inputs, farmers also receive tillage services and agronomy support.

The scheme helped to fill in the gap left by private contractors who scaled down funding citing poor recoveries on their investments due to side marketing. The scheme has helped the revival of the cotton industry, a major source of livelihood for rural farmers.

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.

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