Published by the government of Zimbabwe
Walter Muchinguri
3 July 2008
Harare — COTTON deliveries have firmed since the liberalisation of the foreign currency exchange rate over two months ago.
Industry officials said they estimate that over half of this year's expected 300 000 tonnes has already been delivered to the market.
"We can safely say that the bulk of the crop has been delivered but it is difficult to determine the true position as some of the crop is lost through side marketing," said one of the officials.
Cotton Ginners' Association director-general, Mr Godfrey Buka concurred that there had been an increase in deliveries due to the changes to the exchange rate policy.
"It appears that farmers are happy judging by the increase in deliveries otherwise if it was not the case they would be complaining right now.
"It is, however, difficult to determine the actual crop that has been delivered because unlike other crops like tobacco which have a centralised marketing system, cotton sales are done at numerous depots that are scattered across the country," said Mr Buka.
He, however, said a clearer picture was likely to emerge at a meeting of the association's members this week.
International lint prices have firmed from US 59 cents per pound in March 2007 to US 82 cents currently.
The International Cotton Advisory Committee secretariat forecast that the price would increase to about US 95 cents per pound in the coming season.
Side-marketing has repeatedly presented headaches for cotton merchants who have threatened to pull the plug on their support for farmers as other unscrupulous merchants were buying the cotton that they would have financed.
Already there were indications that efforts by the industry to increase production to above 500 000 tonnes could be adversely affected by some merchants who intend to withdraw their financing support.
The industry has thus been pressing for the enactment of appropriate legislation that would deter side marketing.
Cotton remains one of the country's strategic crop with its contribution to the country's total foreign currency earnings in the region of US$150 million annually.
The bulk of the money is received from lint exports.
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