Zim cotton marketing season kicks off


Bulawayo – Zimbabwe’s 2014 cotton marketing season has started in earnest with most ginners offering prices between 40 and 50 cents per kilogram, the Agriculture Marketing Authority (AMA) has said.

The prices are being negotiated between individual growers and ginners following the banning of cotton producer price collective bargain by the Competition and Tariffs Commission (CTC) last month.

Last year, the seed cotton marketing season closed with the prices ranging from 48 to 61 US cents per kilogram. Most ginners paid average prices of 50 to 55 US cents per kilogram.

Figures released by AMA shows that ginners such as ETG Parrogate, Romsdal are paying 40 to 50 US cents per kilogram, while Alliance Ginneries, Olam and Sinotex are offering 40 to 45 US cents.

Cargill is offering 40 US cents compared to Grafax, which is rewarding farmers with 40 to 47 US cents per kilogram.

AMA said Sino Zim is paying 46 US cents, ahead of China Africa which is offering the least price of 40 US cents per kilogram.

However, few farmers in Gokwe (Midlands Province) and some selected growing areas are delivering their crop to the Common Buying Points (CBP), with most producers still holding on to their cotton anticipating increased prices.

Others still hope that the decision by CTC might be reversed paving way for the announcement of higher price by government which observers dismiss this marketing season.

Commenting on the current price regime, an agricultural economist, Joyce Chizema, said the price where a reflection of what is happening globally.

“It’s quite unfortunate that with the current prices most farmers may find it difficult to break even mainly due to high production cost and low yield per hectare.

“There is great need to balance interests of both parties in terms of costs, not only during the marketing season but from planting to selling. All parties need to play their part. Farmers should work around the clock to increase yields per hectare with the contractors timeously providing adequate inputs per hectare to save the cotton industry from collapsing,” Chizema said. Chizema said ginners and farmers should augment each other and stop the blame game.

“Farmers and ginners need each other to survive so they should work together all year round,” she said.

Cotton price is largely determined on the international market influenced by global demand and supply. According to Agriweb, what China decides to do with its massive reserves, and whether Chinese growers pick up production, will determine the direction of cotton prices in 2014 globally.

Cotton prices tumbled 14 percent after the Chinese government announced that it intended to start selling cotton from its 10-million-ton stockpile. But prices stabilised around 75 US cents after the state-owned China National Cotton Reserves Corp. managed to sell only about half of what it offered—most of it cotton from the 2011 growing season. Cotton producers could be in for another wild ride in 2014 as the Chinese government continues to sell down its stockpile.

It also plans to announce new policies in the spring for the 2014/2015 growing season. Because China accounts for nearly half of US cotton exports, its decisions will have a major influence on the fortunes of US producers and eventually worldwide in 2014.  

AMA has since approved 385 CPB countrywide up from last year’s 320, a hint that the crop size for this year has also increased.

The Cotton Ginners Association is targeting to produce 250 000 tonnes of the crop in the current marketing season.

June 2014
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