Zimbabwe: More Forex, Spot Payment Bring Smiles to Cotton Sector

Stakeholders in the cotton industry expressed gratitude to Government following yesterday's upward review of the price from US$30 to US$75 per bale saying the cash-on-the-spot system extended by Government also added to the excitement.

The Government yesterday offered an on-spot US$75 per 250kg bale of cotton incentive in addition to the gazetted $8 125 price for a bale of the white gold.

Cotton Producers and Marketers Association chairman, Mr Stewart Mubonderi said farmers were happy with the increased foreign currency payment and thanked the Government for putting a smile on cotton farmers' faces.

He, however, urged farmers to start preparing for the next season and cater for family needs such as paying school examination fees as well.

Mr Mubonderi called for the speedy deployment of AMA clerks to all buying points saying some points had no clerks on the opening day of marketing season on Monday.

"Government must also regularly review the $32,50 per kg portion in line with inflation trends to preserve the value of the Zimbabwe dollar component of the payment.

"Although this revised price schedule applies to cotton produced under the Presidential Cotton Support System, I wish private cotton buyers would follow suit for the benefit of our farmers," said Mr Mubonderi.

He also warned fly-by-night contractors against pilfering cotton supported by the Government while applauding Government for designating cotton as an export crop saying this would further incentivise farmers going forward.

Cotton Ginners Association (CGA) secretary general Mr Andrew Mupfawa, also added that the price of US$0, 30 per kg was in line with regional cotton market price trends. The average cotton price locally, in the 80s, 90s has been oscillating within the US$0,30 cents per kg margin.

He was, however, quick to add that the US$30 per bale announced earlier has seen contractors seeking and securing foreign currency funding from banks for the buying of seed cotton but may now be hamstrung and unable to secure foreign currency from banks because of the new figures. "I understand they have since approached AMA to register their concerns," said Mr Mupfawa.

The CGA, with its four companies absorbs less than 20 percent of the national cotton with the bulk -- over 80 percent going to Cottco.

In another development, Mr Mubonderi also challenged cotton farmers to take farming as a business and learn from their tobacco counterparts who are contracted to grow the crop with contractors deducting their dues upon sale.

The Government is currently bearing all the costs of input procurement for cotton farmers with a heavy bearing on fiscus under the Presidential Input Scheme/Pfumvudza. Such funds ought to be repaid for sustainability of the cotton production industry, observed Mr Mubonderi.

Cotton Producers and Marketers Association secretary general Mr Samson Chigaba added his voice saying more deliveries of cotton were coming in and warned private buyers against "reaping where they did not sow" adding that there had been an increase in private contractors sending their picking packs to areas where they did not contract the farmers.

Private buyers are in the habit of offering higher prices than what Government will be paying and prejudicing the actual contractors in the process.

Harvesting, grading, baling and marketing are the dominant activities within most cotton producing areas as a result of different times experienced for the onset of the rain season.

Cottco is availing tractors for transportation of cotton to buying points.

This season's cotton output is expected to be slightly lower than last season's as a result of the uneven rainfall distribution that affected the crop at the germination stage.

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