4 February 2013

Zimbabwe: Ray of Hope for Cotton Growers

THERE is a ray of hope for local cotton farmers as international lint prices gradually recover. If sustained up to when the Zimbabwean crop gets to the market, this could see growers getting better prices than last season.

According to the International Cotton Advisory Committee, prices which had stagnated for the greater part of last season at US70c per pound, are now US83c per pound due to growing demand from China, the world's biggest lint consumer.

"There is a ray of hope as there is a noticeable recovery in lint prices on the international market and if the current trends can be sustained, domestic prices should be better than last season," the Cotton Ginners' Association said.

The issue of producer prices was a contentious one last season, as prices fell on the global market. However, prices that were obtained then were consistent with what was paid in most of the previous seasons in US dollar terms.

Producers were in a crisis of expectation against depressed international market prices, low yields per hectare and high costs of production.

Seed cotton farmers, the world over, share similar challenges with producer prices. However, some of the more developed countries manage to keep their farmers on the land by providing subsidies.

US, China for example, subsidise their producers to keep them motivated to grow the crop.

Countries like India have become more competitive through the use of biotechnology and in addition to this they also provide minimum support prices.

Cotton production is estimated to drop 14 percent to 300 000 tonnes largely due to the late onset of the rainy season and thereafter excessive rains.

According to estimates by the CGA, production of the "white gold" would fall from the record 350 000 tonnes last year, but is upbeat about the future prospects of the sector, which will be supported by the gradual recovery of lint prices on the international market.

"Last season saw a bumper cotton crop being produced when 350 000 tonnes were produced as a result of more input support given through a regulated inputs distribution system," said CGA in a statement.

"Due to the late rains which then became too much at some point, the current crop shows potential production of around 300 000 tonnes, an estimate which is based on seed distributed to farmers.

"However, the true picture will only emerge after the hectare verification exercise currently taking place."

The ICAC said world production is dropping by 1,5 million tonnes to 26 million tonnes and consumption is rising by 760 000 tonnes to 23,5 million this season.

Cotton is grown by about 300 000 households in Zimbabwe and represents cash income to between three and four million people or 25 percent of the rural population.

And contrary to reports that many farmers have abandoned cotton production, industry players say the sector has gone back to "our original numbers before the distortions that were caused by the phenomenal increase of seed cotton price in 2010/11 season."

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