adminTHE Cotton Company of Zimbabwe (Cottco) says it is pinning hopes of improving cotton prices on Chinese companies’ uptake of the plant.
The cotton prices this year have averaged between $0,65 and $0,70 per kg for contracted and non-contracted crop this season.
Speaking at the company’s annual general meeting (AGM) this morning, Cottco managing director Collins Chihuri said the prices were expected to rise when the Chinese begin buying cotton.
“The Chinese reserve, though a staggering 12 million tonnes requires some blending with imported good quality cotton.
It is expected that once the Chinese start buying and importing cotton the prices will move up,” he said.
He said the past week had given them hope of future price increases due to a number of factors.
“However, not all hope is lost as prices are showing signs of recovering due to a number of factors. We have in the last week seen small signs of price recoveries,” he said.
He said the weather misfortunes affecting other regions across the globe could bring a positive end for the country.
“We hope that all these weather concerns though sadly affecting the regions will somewhat reduce the supply of cotton thus correcting the mismatch between supply and demand,” he said.
Chihuri said although cotton levels are lower than expected the company is likely to recover its input costs.
“The national crop is expected to be in line with that of last year and lower than estimates made by both the Cotton Ginners Association and Agritex.
“We are coming towards the end of intake and our purchased quantities are in line with the level of our inputs funding.
We should be able to recover our input costs by season end,” he said.
According to Chihuri there has been an increase in the producer price as well as a hope that consumption will increase by a marginal percentage.
“There has been a 10 percent increase in the national average producer price.
“Cotton and polyester prices have converged and it is anticipated that most textile mills will revert to cotton as it is a natural fibre and cotton consumption is therefore forecast to increase by 5 percent,” he said.
He said Cottco will continue to have a positive outlook and pursue improving the industry.
“As a company we are pushing a national drive to increase national production with continued focus on cost reduction initiatives.
Industry initiatives are targeting yield improvements through farmer training and improved extension where we are complementing efforts of Agritex,” he said. — BH24
Online Reporter